Alabama Exempt Income RS Form 2023

Forum|Forum|2 years ago
March 20, 2024
1 reply
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How do I change the Exempt amount on my Alabama RS Form. I have income from military retirement, a small defined benefit plan, and I made a Qualified Charitable Distribution, all of which should be exempt income in Alabama. But, Turbotax transferred all that income to my state return and I can't change it, even when I go into the form view.

Seems like a big glitch in Turbo Tax.

Any ideas on a fix, work-around, or different way to enter this income?

TurboTax Home & Biz Windows

DMarkM1

Yes, you are correct AL does not tax your military retirement benefits nor defined benefit plan distributions and the Qualified Charitable Distribution (QCD) is non-taxable at the federal level so does not transfer to your AL state return. Below are the steps to verify your entries.

Click the "State Taxes" tab
Continue
Edit Alabama
Update the "Income" section
You will arrive at a page titled "About your retirement distributions"
You will see the list of distribution sources
The QCD should already be excluded from AL Taxable (If not see the steps below to verify federal entries)
Edit the Military Retirement
Alabama Special handling Select "Yes"
Select Military Retirement from the dropdown
Continue
Edit the Defined Benefit item
Alabama Special handling Select "Yes"
Select Defined Benefit from the dropdown
Continue

Assuming you meet the the age requirement- 70.5 for a QCD

In the step-by-step select the income tab
I'll choose what I work on
Retirement Plans
Update "IRA...1099R"
Edit the 1099R for the QCD
Verify the form entries
Continue to the page titled "About this Retirement Account"
Assuming you meet the age requirement you will be asked about Required Minimum Distribution (RMD)
Answer yes or no as applicable
Again assuming you meet the the age requirement- 70.5
Next you will be asked about a Transfer to Charity
Select as applicable (All or Part) (Reminder also, QCD cannot include any distributions from non-deductible contributions)
Continue through the RMD questions back to the Summary Page
Now go back to the "State Taxes" tab
Continue
Edit Alabama
Update the "Income" section
You will arrive at a page titled "About your retirement distributions"
You will see the list of distribution sources
The QCD should now be excluded from AL Taxable

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dspbAuthor

Thanks for the quick reply. I figured it out by going into the "Forms" view and editing the "Pens Excl Wks. On that form, I clicked the second box in the "Dist Code" "#" Column. That solved it.

My desktop version of TT Home & Business, doesn't offer a step to "Update the Income." I went around and around on that.

Thanks.