Military retirement pay and Maryland deduction

Forum|Forum|5 years ago
March 23, 2021
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I'm filling out Turbo tax and the system is not deducting the $5000, the Maryland tax rule, from my military retirement pay. How to fix this on my Maryland state filing?

DMarkM1

The military retirement income deduction (5000 or 15,000 if age 55 or older) is automatically subtracted from your MD income based on the entries in your Federal interview.

First be sure you have indicated you are military/retired in the "My Info" section. Next when entering your 1099R you will get a follow on question asking about the source of the retirement. Be sure to select it is military retirement pay.

Next, to see the subtraction you can view a summary of your MD return in TurboTax online versions.

Click "Tax Tools" in the left hand menu
Click "Tools"
Click "View Tax Summary"
Click "Preview My 1040" in the left hand menu
Click "View MD summary" in the left hand menu

You should see the subtraction in the "Subtraction from income line"

For TurboTax desktop just go to the "Forms view" and look at the MD return line 10a on form 502.

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dcdbiz

Please help! I am retired military age 67 and entitled to the $15K subtraction in Maryland Form 502 Line 13: Code U. Problem is Form 502 Line 10a. Pension Exclusion is automatically selected by Turbo Tax; it checks that item. MD Comptroller advised Line 10a. must be blank in my case. I need to delete the entry in Form 502 Line 10a. However, Turbo Tax Deluxe desktop is not allowing me to delete the entry in Line 10a. How to clear Form 502 Line 10a? Thank you!

DMarkM1

Yes, you are correct, you cannot override that selection. Once you are age 65 or older or totally disabled you automatically are qualified for the MD pension exclusion. However, that does not disqualify you from the military retirement pay exclusion of up to $15,000. Here is link to the applicable MD Law. You can get both of these.

TurboTax does take this into account therefore you will need to revisit your entries.

First be sure in "My Info" you have indicated you are "Military" and select "Retired" in the follow on pages.

Next revisit the 1099R entries. After entering the form information for the military retirement 1099R, be sure to select the "Active or Reserve Military Retirement" option when asked where is this distribution from. Also check/enter the amount of the distribution in the MD box.

On the next page select "Non-qualified plan" to identify the military retirement. This will ensure you get the military retirement exclusion no matter what other retirement exclusion you may be eligible for.

Check your entries for any other 1099Rs you have as well.

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