Michigan Public Safety Officer Pension is being taxed - GLITCH??

Forum|Forum|2 years ago
February 1, 2024
2 replies
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Turbotax state program is taxing my husband's pension as a public safety officer. New law from 2023 allows 100% deduction of public safety officer pension. When clicking "pension is from public safety officer" it sometimes reverts back to "no" if going backwards. But it is still taxing the pension even when clicked "yes". Need this fixed in the program. Have tried several times with agents at turbotax. Case #[number removed].

TurboTax Business Windows

BillM223

Are you saying that on Form 4884, that line 27 does not include the amount of the pension (see Form 4884)?

Are you also saying that the pension is considered taxable on your federal return (line 5b on the 1040)?

Don't be too concerned about the yes/no answers changing. Some questions are so important that every time you enter the screen with the question, TurboTax in essence asks you to reconfirm the answer.

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WILLNDTWAuthor

Hello BillM223,

From my understanding, based on new Michigan law, when selecting “yes” for public safety officer, the program should be exempting pension income from the state tax portion. However, it is not exempting it. Only when choosing “military pension” does it exempt it (but it is not a military pension it is a qualified government/public pension). Federal taxes are not affected by this law, and are taxed.

Also, it’s really confusing when it doesn’t save the “yes” for public officer, and you have to change it every time you go back. That is going to mess up a lot of people’s taxes that don’t catch that (my opinion).

I spoke to two agents already about this issue, and they both agreed that there was an issue here (for both of these points). But I don’t see it resolved.

Thanks to advise if I’m missing something here, or when this issue will be fixed. If I didn’t catch the fact that it taxed this pension income, I would probably have filed this way (and lost about $1000).

BillM223

Yes, public safety officer pensions are exempted up to $61,518 if filing single or married filing separate, or $123,036 if filing married joint. Which one are you?

On form 4884 (if you can see it), is line 6a checked? And on line 6b, is the box checked?

Finally, can you see "Worksheet 3.2: Retirement and Pension Benefits Subtraction for Section C of Form 4884"? Please tell me each of the lines and the value on each line. If so, this could show why the pension was disallowed in Michigan.

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WILLNDTWAuthor

Hello Turbo tax experts: Can you please advise when this glitch will be fixed? What is the status? I would like to file my taxes today. Still surprised that no one there seems to know anything about this issue, and that it has not been resolved. Thank you for your response with resolution status.

jk407

@WILLNDTW

I was able to do some trickery to get the forms to (kinda) work.

I had to go to my personal information and change my date of birth to 1950, even though that is no where close to what it really is (I was born in the 70's). This allowed me to go through the rest of the Michigan retirement/pension income steps, and the questions for Public Safety Officer were there, which then checked box 6a on the forms (Schedule 1 and 4884). These are the 3 screens after entering the information for the pension (where you choose type "G"):

screen 1:

Screen 2:

Screen 3:

After completing these screens I went back and corrected my age, and the forms stayed correct. I was using the desktop software version so I was able to look at the individual forms as I went along. It seems to work as well with the online version.

Feel free to send me a private message if this isn't clear and I can try to help out.

Hopefully Turbotax fixes the glitches so we don't have to resort to trickery to get the forms to populate correctly.

PS-I was able to e-file my state and it was accepted yesterday.

WILLNDTWAuthor

This is awesome. Thanks ! Never would have thought to do that, but I'm going to give it a try later and see if it works. It is a shame that we pay for the program, and it doesn't work correctly. I understand making updates to the software, etc., but I spent hours on the phone with Turbo tax, and no one was able to fix this issue. Thanks again !