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February 12, 2022
Question

Pension Exclusion Qstn: Lived in MD only 2 months in 21, TT is asking

  • February 12, 2022
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    Employee
    February 12, 2022

    TurboTax automatically calculates the pro-rated Maryland pension exclusion amount for part-year residents.

     

    From the MD instructions for computing the pension exclusion if you are a part-year resident:

     

    If you are a part-year resident, complete PENSION EXCLUSION COMPUTATION WORKSHEET (13A) using

    total taxable pension and total Social Security and railroad retirement benefits as if you were a full-year  resident. Prorate the amount on line 5 by the number of months of Maryland residence divided by 12.


    However, if you began to receive your pension during the tax year you became a Maryland resident, use a proration factor of the number of months you were a resident divided by the number of months the pension was received. 

     

    For example, Pat Taxpayer moved to Maryland on March 1. If he started to receive his pension on March 1, he would prorate the pension exclusion by 10/10, which would mean he would be entitled to the full pension exclusion. However, if he began to receive his pension on February 1, Pat would prorate his pension by 10/11. Note that, in either case, the proration factor may not exceed 1.