Hi again Bill!
I went back to the actual form for the MA Teacher's Retiement Form 1099-R. Line B4 has the full $57,440.76 listed as "Amount of this distribution that may be rolled or converted to a Roth IRA"
NONE of this WAS converted to a Roth IRA, but it won't let me erase it from that line even though I listed it as "a normal distribution." and NOT an IRA . I also looked at the "IRA Contributions Worksheet" and it is NOT listed there. So how does it end up listed as an IRA?
Moving on to the State Tax Forms, in the "Final Review" Turbo Tax says "Form 1" is not done and I have to complete it. In the Section 3 "Pensions and Annuities Smart Worksheet" the "Commonwealth of MA Teacher's Retirement" lists the amount as $57,242. That is in box 2a "Taxable amount" not the gross distribution. However, it does list the full $57,441 gross distribution as a "Tax exempt portion of pensions and annuities" (in RED)The final Line 4, "Taxable pensions and annuities" is the taxable amount of $43,956 WITH an "explanation statement the says, "Tax-Exempt Qualified Pension Plan." I'm not sure WHAT they want me to do to correct the error????
When I looked back at the 2020 return, the 1099-R for my Teacher's Retirement, the full amount was in B4 "Amount of this distribution that may be rolled or converted to a Roth IRA."
The 2020 MA return had a VERY different Form 1. My RMD's were ALSO listed as tax exempt and ONLY my wife's RMD was taxable. That significantly lowered our MA taxable income, and gave us a MA refund of $2,339 for 2020 vs. $470 this year. That's what set off my alarm bells for possible problems with the 2021 return.
