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When you enter a pension or IRA Form 1099R in screen 13 with distribution code D, Lacerte now removes this amount from the IL 1040 Line 5 subtraction in the 2024 software. I do not believe that the Lacerte program made this adjustment in years prior to 2024. Be sure to double-check your IL subtraction relative to non-qualified annuities.
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Use Ctrl + L to open a message to Lacerte to report the issue. Your description and solution should be included to help them correct the programming. Good work.
Answers are easy. Questions are hard!
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I believe income from non-qualified annuities are subject to IL tax, and, therefore, not supposed to be part of the IL subtraction for retirement income on IL 1040, line 5. From my experience, the non-qualified income reported on 1099R (distribution code D) was part of the line 5 subtraction in past Lacerte versions (perhaps incorrectly), and a separate adjustment had to be made to avoid underreporting at the state level. For 2024, the IL 1040 line 5 subtraction now treats the non-qualified annuity correctly if you enter the D Code in screen 13. The purpose of this post was to raise awareness. It took me by surprise the first time this happened, and I wasted everyone's time by calling support. My hope is others will benefit from this information.
