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June 6, 2019
Question

RSA retirement systems is Alabama tax excemt

  • June 6, 2019
  • 2 replies
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2 replies

IsabellaG
Employee
June 6, 2019

It's true that many retirement distributions are exempt from tax in Alabama. If you enter your 1099-R correctly in the federal section, it won't be transferred as taxable income to your Alabama return. There's no box to check or any information to add. If you find that you are being taxed on your pension, please respond with more information about your 1099-R including the distribution codes in box 7, and I can give you more specific directions. 

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January 30, 2020

Distribution Code 7

January 30, 2020

Alabama considers income from the State of Alabama Employees' Retirement System to be excludable from tax, but you have to manually indicate that the plan qualifies to be excluded.

 

Then enter the Alabama state interview and proceed to the screen entitled "About Your Retirement Distributions". The table will have one entry for each 1099-R that you have entered into the federal return.

 

For each pension, click on Edit in order to indicate whether the plan is taxable in Alabama or not. 

 

When you click on the first pension, you will be presented with a new screen. The screen is asking if your pension is any one of these types. Note "the State of Alabama Employees' Retirement System", which was the point of the discussion above.

 

If your pension plan is any of these types, then answer "yes" at the bottom of the page. You will be returned to the previous screen with the Alabama income set to zero for this item, i.e., not taxable.

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