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JotikaT2 · ‎February 9, 2020

Essentially, they are trying to determine what your basis is in the IRA. Massachusetts only taxes your IRA after you have withdrawn from your basis portion. This differs from the IRS which taxes all distributions.

Please see the attached explanation by ScruffyCurmudge for a more detailed explanation of the rationale.

MA IRA distribution tax treatment discussion

Here is additional information from the state of MA with additional information:

MA IRA information

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