Left job - 401 k distribution

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    Left job - 401 k distribution

    I am trying to file my MA return on Turbotax.  I left a company so they distributed the small amount I had in the 401k.  I entered everything from the 1099R form as prompted.  The federal return is fine but I get the following message regarding the MA return.   I have no idea what this means.  The amount i entered is the amount of the (total) distribution.  Thanks for any help.

    Form 1: Tax-Exempt Pension should not be entered directly on Form 1 for State
    Electronic Filing. You should enter the information on the Federal Return, Form 1099-R and/or use the Pensions and Annuities Smart Worksheet to make any tax-exempt adjustments.
     
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    Re: Left job - 401 k distribution

    In Response to Left job - 401 k distribution:
    [QUOTE]I am trying to file my MA return on Turbotax.  I left a company so they distributed the small amount I had in the 401k.  I entered everything from the 1099R form as prompted.  The federal return is fine but I get the following message regarding the MA return.   I have no idea what this means.  The amount i entered is the amount of the (total) distribution.  Thanks for any help. Form 1: Tax-Exempt Pension should not be entered directly on Form 1 for State Electronic Filing. You should enter the information on the Federal Return, Form 1099-R and/or use the Pensions and Annuities Smart Worksheet to make any tax-exempt adjustments.
    Posted by denheels[/QUOTE]

    Dear denheels:

    In some circumstances, MA will have NOT allowed a deduction for money being contributed to a retirement account.  This is the case for Traditional IRAs (federally deductible, but no MA deduction).  The same holds, generally, for pensions set up and funded by self-employred persons.  Since there is no MA deduction on contribution, the funds are tax-exempt when withdrawn from the IRA or pension (nothing being taxable in MA for distrbutinos until these amounts have been fully recovered).   The program is advising you that if the distribution is from a pension that you funded as a self-employed person AND you know (and can document to the MA Department of Revenue) these amounts, you need to preepare their subsidiary schedule in the program to get proper treatment for these tax exempt monies in the program.

    Hope this helps in preparing your returns!

    Mark H. Misselbeck, C.P.A., M.S.T., Tax Principal
    Katz, Nannis + Solomon, P.C.
     
  3. You have chosen to ignore posts from denheels. Show denheels's posts

    Re: Left job - 401 k distribution

    In Response to Re: Left job - 401 k distribution:
    [QUOTE]In Response to Left job - 401 k distribution : Dear denheels: In some circumstances, MA will have NOT allowed a deduction for money being contributed to a retirement account.  This is the case for Traditional IRAs (federally deductible, but no MA deduction).  The same holds, generally, for pensions set up and funded by self-employred persons.  Since there is no MA deduction on contribution, the funds are tax-exempt when withdrawn from the IRA or pension (nothing being taxable in MA for distrbutinos until these amounts have been fully recovered).   The program is advising you that if the distribution is from a pension that you funded as a self-employed person AND you know (and can document to the MA Department of Revenue) these amounts, you need to preepare their subsidiary schedule in the program to get proper treatment for these tax exempt monies in the program. Hope this helps in preparing your returns! Mark H. Misselbeck, C.P.A., M.S.T., Tax Principal Katz, Nannis + Solomon, P.C.
    Posted by MASocietyofCPAs[/QUOTE]
     
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    Re: Left job - 401 k distribution

    Thanks for your prompt reply.  Because I was not self-employed, I shouldn't have to fill out the schedule.  There seems to be an error because regardless of whether i enter 0 or the full amount, Turbotax won't let me proceed.  Frustrating.
     
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