Does Massachusetts tax Keogh retirement earnings?
Fed TT says no, State TT says yes. Which is correct?
Earnings within a Keogh (before withdrawal) are not taxed. The withdrawal itself may or not be taxable in MA. Use Schedule X, Line 2 worksheet to determine the taxable amount, if any. Basically, the amount you contributed is not taxed, but once all the contributions have been withdrawn, the earnings are considered taxable by MA.