SC state return - Reserves and National Guard retirement taxes

Forum|Forum|2 years ago
February 2, 2024
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I receive retirement pay from DFAS for my Naval Reserve retirement. In SC, this is normally not taxed or is capped at a certain level. This is taxed differently than the active duty retirement pay. Using the online TurboTax, I do not see that this has been taken into consideration as the entire amount of my pay from DFAS is showing as taxable in the SC return. Any help is appreciated.

DMarkM1

SC treats all military retirement the same including retirement from the Reserves or Guard. Here is the SC reference.

Assuming in the "My Info" section you have indicated SC is your resident state, then when entering the 1099-R information in the federal "Wages & Income" section using the "Retirement" dropdown you will arrive at a page asking "Where is this distribution from?" Select the source of the South Carolina distribution. You should select "Military Retirement distribution."

This will prompt military retirement exclusion questions in the SC interview. You should then enter the same 1099-R amount when asked about the military retirement exclusion.

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