Pension and annuity subtraction

Qualifying individuals may claim a subtraction on the Subtractions from Income Schedule (DR 104AD) for pension and annuity income included in their federal adjusted gross income.

Joint filers have additional considerations to claim the subtraction. To determine the subtraction allowed in the case of a joint return, each spouse must separately determine their eligibility for the subtraction (based on their age or receipt of death benefits) and the amount of the subtraction they may claim (based on their respective qualifying income and the maximum allowable amounts, discussed later in this publication). The amount of the subtraction is computed separately for each spouse. If a taxpayer’s qualifying pension and annuity income exceeds the maximum allowable amount, the excess income cannot be subtracted either by that taxpayer or their spouse, even if the amount of the spouse’s pension and annuity income is less than the maximum allowable subtraction amount.