Massachusetts Taxable IRA/Keogh and Roth IRA Distributions
Massachusetts residents must report taxable distributions from Individual Retirement Accounts (IRAs), Keogh plans, and Roth IRA conversion distributions on their state tax return. These distributions are subject to Massachusetts personal income tax, but the state does not allow a deduction for contributions originally made to these accounts. Therefore, distributions are taxable only after the full amount of previously taxed contributions has been recovered.
Key Points for Reporting
- Worksheet for Calculation: Use the Schedule X, Line 2 Worksheet to determine the taxable portion of IRA/Keogh or Roth IRA conversion distributions. This worksheet is required for all Massachusetts residents receiving such distributions.
- Line 1 of Worksheet: Enter the total amount of IRA/Keogh plan distributions, qualified charitable IRA distributions, and Roth IRA conversion distributions received during the year.
- Line 2 of世Worksheet: Enter the total contributions previously taxed by Massachusetts. This includes contributions to IRAs or Keogh plans that were taxed when made.
- Line 3 of Worksheet: Enter the total distributions received in previous years.
- Line 4 of Worksheet: Subtract Line 3 from Line 2. If Line 3 is greater than Line 2, enter 0.
- Line 5 of Worksheet: Subtract Line 4 from Line 1. This result is the taxable amount.
- Line 6 of Worksheet: Enter the total qualified charitable IRA distributions for the year.
- Line 7 of Worksheet: Subtract Line 6 from Line 5 to determine the final taxable amount. Enter this amount on Schedule X, Line 2 and on Form 1, Line 9 (Other Income).
Special Considerations
- Roth IRA Conversions: Any taxable portion of a rollover from a traditional IRA to a Roth IRA is included in Massachusetts gross income, except for amounts previously taxed by Massachusetts.
- Keogh Contributions Before 1975: Contributions made to Keogh accounts before 1975 were deductible when made, so no deduction is allowed from distributions for those amounts.
- Rollovers from Deferred Plans: Amounts rolled over from a deferred plan (e.g., 401(k)) into an IRA are not considered previously taxed contributions and are fully taxable upon distribution.
- Part-Year Residents: Part-year residents must complete the Schedule X, Line 2 Worksheet to calculate taxable distributions received while residing in Massachusetts.
Reporting on Massachusetts Forms
- Taxable IRA/Keogh and Roth IRA conversion distributions are reported on Form 1, Line 9 (Other Income) and on Form 1-NR/PY, Line 11 (Other Income).
- The worksheet instructions are detailed in the Form 1 and Form 1-NR/PY instructions, specifically on pages 19 and 24 respectively.
Source:
Form 1 Instructions
Form 1-NR/PY Instructions
Note: Always verify details with the official Massachusetts Department of Revenue forms and instructions. OLT (Online Taxes) provides guidance based on retrieved context but does not replace official tax authority documents.