Why is Turbo Tax counting all of my 2024 Missouri public pension as taxable income?

Forum|Forum|1 year ago
January 24, 2025
6 replies
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Beginning in 2024, Missouri does not tax public pension income up to the amount of the Social Security maximum.

BillM223

Your taxable social security benefits (line 6b on the 1040) should appear in form MO-A, Section B, line 2, and on Section C, line 4Y (depending on which souse has the SS benefits).

This number would flow through to be part of for MO-1040, line 8.

Are you saying that you don't see the numbers at the locations I have described?

P.S., the Missouri return in my DC/download software appears to be working correctly. Are you perhaps using the Online product?

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bribrenkinkadeAuthor

First, I can't see the tax form because I have not completed and paid for the service, and I don't want to pay for the service if i am uncomfortable with the accuracy of the calculation. I am using the online application.

The problem is not with Social Security. I have a state government pension. I am a retired state employee. Before 2024, public pension income was exempt for taxpayers under a certain income threshold. The Missouri General Assembly changed the law (which became effective January 1, 2024) to remove the income limit on the pension exemption, but limit the exemption to the amount of the full federal Social Security benefit and reduced by the amount of any Social Security exemption claimed. Based on my understanding of the law about $43,000 of my state pension should be exempt from Missouri tax. I did not receive Social Security in 2024. THe only information Turbo Tax provides is that it checked if I qualify for a public pension exemption and that I do not. There is no explanation or calculation to show how it arrives at that conclusion. Here is the MO DOR's summary of the change in law: https://dor.mo.gov/faq/taxation/individual/pension-tax-year-2024.html

MO Tax Payer

I just spend 40 minutes on the phone with Turbo Tax with the same problem. After all of that time they said the following: 1) if your retirement was higher than the public pension" then MO tax is paid. (I do not know what this means nor did I receive any other retirement income, nor should that even be relevant as I do not receive SS either); and 2) you will need to pay for a tax expert if you want additional help.

TW7

Missouri Public Pension Calculation on MO-A , Part 3- Section D "Total Pension and Social Security/Social Security Disability" is not correctly adding Line 5 (Section A), Line 9 (Section B) and Line 4 (Section C) on the most recent updated Missouri State Forms issued 1/30/25. This error is causing my Public Pension on the MO-1040 Line 8 to reflect $0. Which increases my taxes triple. 😞 Come on Turbo Tax--you need to do a better job updating your forms. Thank You!

BoCoMoBM

Yes, I finally spoke to customer service this morning and all they could say was, "We are aware and we are working on it." Mine (only income is PSRS) is computing the correct number in Section D, Part 3 but isn't transferring it to line 8, thus costing me $1,500. How could they not at least warn people to wait to file. Instead, many retired teachers will probably file and never know that they lost a lot of money.

elkins1846

Turbo Tax still has an error in their calculations for public pensions as of February 5. I used Missouri on line calculating form to verify and spent 2 hours with a Turbotax rep only to get the response that maybe Turbotax doesn't have the latest update from Missouri and I should try again in 8 days. Turbotax software is not deducting any person at all.

TW7

I believe the update was made today. My tax return seems to have been corrected with the most recent update.

nichols3776

Anyone else know if this has been fixed yet or gotten notification it has been fixed?

Rlankford

As of this morning, Feb. 5, it is now working as it should.

BoCoMoBM

This is fixed as of this morning. I just e-filed mine with the correct refund amount.

4tajackson

Maybe not a direct answer to your question, but...I just ran into a similar issue - I completed my taxes at the beginning of February but did not file them - small Missouri refund and small amount owed to IRS. About 2 weeks later, I logged back into TurboTax and my Missouri refund had increased dramatically. After a lot of research, I redid my Missouri taxes on the downloadable-fillable Missouri tax form 1040 just so I could see how TurboTax was coming up with its numbers. Everything matched what TurboTax was showing me. So I get a big refund! Awesome.

My biggest pet peeve with tax software is I can never see the calculations behind the final numbers - especially this time, for the Public Pension deduction figure - I had no idea how Turbo Tax got to this number. A great addition to TurboTax would be to somehow show the calculation processes.