Utah State Military Retirement Credit (code AJ)

Forum|Forum|4 years ago
January 23, 2022
5 replies
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How do I enter Military Retirement Credit (code AJ) on my Utah state tax form? The drop down for other credits does not have this option.

TurboTax Free Edition Online

Best answer by BillM223

As you know, the change to the tax code in Utah was that taxpayers receiving military retirement income receive a nonrefundable tax credit of 4.95% of the distribution reported in income, so the military retirement still appears as taxable income but a credit is applied to compensate for it. See this Utah page.

NOTE: you can't take the military tax credit if you claim either the Social Security Benefits Credit or the Retirement Credit. Please see this Utah page.

TurboTax will identify which of the credits gives you the best result and apply it automatically.

We have identified an issue with the military retirement credit in Utah, and are researching it.

RBBrittain

Employee

Are you or your spouse also taking the Retirement Credit (code 18)? You cannot claim both. See https://incometax.utah.gov/credits/military-retirement and https://incometax.utah.gov/credits/retirement-credit .

Chuck_KAuthor

No we are not taking any other credits. Turbo Tax form/software does not have the Utah State Military Credit listed.

BillM223Answer

NOTE: you can't take the military tax credit if you claim either the Social Security Benefits Credit or the Retirement Credit. Please see this Utah page.

TurboTax will identify which of the credits gives you the best result and apply it automatically.

We have identified an issue with the military retirement credit in Utah, and are researching it.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

dele2451-aol-com

I too am having the same problem using AJ code. I wonder how we will know when Turbo Tax has this fixed? keep coming back to this post everyday.

Jd4001Gab

You can go to the Utah State Tax Commission home page and download the TC40 e file packet. Fill in the forms with information from the Turbo tax federal return. You can claim the military retirement credit and efile free of charge. Took about ten minutes. Received confirmation of receipt within 10 minutes by email. Simple

dele2451-aol-com

Thanks

rclayton22

My Utah State return was also rejected by the state because TurboTax without any input from the user elected to use Nonrefundable Credit Code AH (Social Security) which is significantly less than Code AJ (Military Retirement). The state system was smart enough to detect the Military Retirement and reject the TurboTax file return because of this error.

The TurboTax error explanation stated it was a known issue with TurboTax affecting the Utah returns and will be addressed in a software update. The software update was scheduled for release on February 3rd which has passed. Since I use an online product how can tell when the online version is updated and is there a new scheduled date for the software update release?

arjay36

Turbotax Utah state tax program is a waste of time. There are may exemptions and deductions that are available to filers, but Turbotax completely ignores them. I had to go to the state tax commission online to get information on the allowed deductions and instructions on their implementation (Forms, etc.)

I was able to find two deductions that lowered the taxes due.

Next year I may have to go elsewhere for complete tax advice.

DaveF1006

To clarify, what Utah forms wasn't addressed by Turbo Tax?

@arjay36

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kweduc8r

This is still an issue with TurboTax two years later. Try putting the code AJ into the TC-40A, Part 3 portion of your return as per UC §59-10-1043 and it will be rejected as an invalid code. This tax code went on the books January 2023 and TurboTax still hasn't caught up.

DaveF1006

No. There doesn't seem to be any issues with the Turbo Tax program. I have tested the program and it seems to be working properly. Follow these steps.

Re: FORM TC-40A: Part 3 Credit Code AJ still not recognized by TurboTax (Utah Military Retirement...

It depends. I have tested this in Turbo Tax and it is working normally with no errors at the end of the return. Possibly, you may be entering the information on your own so here is how to enter your 1099R in your federal return so that the information will flow to your FORM TC-40A.

Start TurboTax:

Open TurboTax and sign in or start a new return.
If you have already started the return, navigate to the "Wages & Income" section.:
In the "Wages & Income" section, scroll down to Retirement Plans and Social Security.
Go to RA, 401(k), Pension Plan Withdrawals (1099-R) Or Social Security ( SSA 1099, RRB 1099)

Now after entering your 1099R that reports your military income, there will be some follow-up questions. When you reach a screen that is labeled "Where is the Distribution From", indicate it is military pay. This will then flow to your Utah Form TC-40A with . You do not need to do anything additionally. Here is how the screen(s) should appear in your return.

Please note this is for illustration only so the amount next to the code will be different in your return.