I looked at the page 20 instructions and the first sentence reads "Complete the Schedule X, Line 2 Worksheet to calculate the taxable portion of any amount you received from an Individual Retirement Account ...". Also the last line of the worksheet reads "Taxable IRA/Keogh distributions or Roth IRA conversion distributions".
I think we need to look at the big picture here. It seems pretty clear that their intent is to have taxable amounts included on line 2 of Schedule X. I do agree that their instructions could benefit from some clarity regarding how to handle HFD's. However, based on the instructions, I don't think Turbotax should be including nontaxable IRA distributions on line 2 of Schedule X as that is clearly not the intent here.
Also, I think the instructions for line 8 of Schedule Y are very clear. Just enter the amount from your Federal return. The Federal return is clear on the handling of an HFD. I don't think Mass.gov will change that nor do I feel it is even necessary. Plus this is not an issue for Turbotax.
I hope you can provide this feedback to Turbotax so they can make some changes that will result in the correct taxable income for Mass. being calculated in this situation. It's just common sense that it is not ok for tax software to make errors in computing someone's taxes, and hopefully they will own up to that and make the necessary corrections. Also, it might make sense for Turbotax to build in some checks and balances between taxable IRA distributions on the Federal return and the Mass. return. It already has a lot of these types of checks built into the software for other areas which are very good, so maybe they will add this one in too?
This tax error in Turbotax does not appear to be an isolated occurrence based on all the postings (including my other postings) about errors. Turbotax is not perfect, but hopefully with all the feedback from he community steps can be taken to make it a better product. Thank you for your consideration.
