Form 1099-R, code 8

[k-mcdonald627-gm]

All,

I have a client that received a 1099-R with box 7 (distribution code) code 8. The system automatically treats this as apart of wages and not a regular 1099-R. The issue is the client should be exempt from the NYS taxes but there is no where for me to enter that to ensure it doesn't flow to his state taxes. 

Have anyone encountered this before and if so, how did you correct it?

[George4Tacks]

Why would they be exempt of state tax? Did the code 8 distribution not come from deduction contribution they prior year on the state return?

[k-mcdonald627-gm]

@George4Tacks this was from an accumulation of excess deferrals to his pension. He was once a city police officer then became a state trooper. I hope that helps.

[George4Tacks]

Does NYS exempt public safety officer pension? I don't do NYS. If you feel it should not be taxable, you could do a manual adjustment to state income.