Do i record my 1099r in the state i lived in when i received the original loan (NY) or where i lived when i received 1099R form (MA)?

[hlraftery]

I'm not clear whether I should allocate the split based on my months of residency. Only MA is listed in box 13.

[MichaelL1 · Accepted solution]

First a loan from a 1099R is not taxable, unless you did not pay it back and then they will consider it a distribution at that time.  A loan does not generate a 1099R. 

It appears from the question you are filing a part year resident of MA and NY.  The amount that would be taxed by the states, then would be the state where you were living when you got the money. 

[hlraftery]

The 1099R was sent to me because of a loan I took on my 403b before I left my job in NY. I did not pay it back, hence I received the 1099R. Why does box 13 list MA then? So I should record the full amount as NY Resident Income?  I've seen different answers to this question, so it is confusing.

[MichaelL1]

You are considered as getting the money when the 403B loan was changed from a loan to a distribution.  If you were in MA at that them then it is MA income.

[hlraftery]

So what triggers that change?  The year ending and them sending me a 1099r?  sorry, not an accountant here - questions might seem basic to you, but I don't know when the change to a distribution technically occurs.

[MichaelL1]

The distribution is deemed to occur when you and company discussed that the loan was not going to be paid back.  If not discussed with them, then when they decided.  I hope i am not confusing you. This is complicated, as a loan is not taxable income but a distribution is taxable.  So when the loan turned into the distribution that is the state that will tax it.

[hlraftery]

Okay, since the company didn't discuss with me, I am guessing at year end they decided to call it a distribution, so it became taxable then and I was living in Massachusetts then.  Thanks.