Freetaxusa incorrectly including NYS disability income

tepidarium
tepidarium Member Posts: 1 Newcomer
in State Filing

I have a New York State (NYS) public disability pension. This is federally taxed because I am under normal retirement age but should not be taxed by New York State where the minimum age doesn't matter. FreeTaxUSA is incorrectly including my disability pension in my NYS IT-201 AGI. It should be subtracting it on line 26 (I think). I have correctly entered my 1099-R in the federal section. Can anyone help me get this income subtracted on the IT-201 form via FreeTaxUSA?

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Answers

  • dbbashmore1963
    dbbashmore1963 Member, Star Posts: 6

    Have you filed your tax return? If not just go where they have filed under your income an edit it.. If you have filed and they accepted it you would file an amended return.

  • KeriC
    KeriC FreeTaxUSA Agent Posts: 221

    @tepidarium
    It sounds like you are referring to the NYS government pension exclusion, which is different from the disability income exclusion. If the code in Box 7 of your 1099-R is "3" indicating disability and if you are under age 59 1/2, your disability income will be treated as wages on both your federal and state tax returns. In this case, you won't qualify for the pension exclusion.

     If you received an early retirement distribution for disability qualifies for the Disability Income Exclusion, you will need to follow this menu path:

    1) State > New York > Subtractions from Income

    2) Select YES to the question, "Do you need to claim the Disability Income Exclusion by completing Form IT-221?"

    3) Click "Save and Continue"

    4) As you proceed, you will come to a page titled "Tell us about your disability pay". Here, you may make the entries to have your disability income excluded.

    5) Click "Save and Continue"

    6) This should put you on the page titled "Tell us more about your disability pay". Here, you will make additional entries as required for the state.

    7) Click "Save and Continue" to proceed with your return.

    Please note that the Disability Income Exclusion is not a dollar-for-dollar reduction. You are welcome to review Form IT-221 when previewing your forms before filing to view the calculations specific to your return.

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