When you enter this 1099R in the federal return make sure to put MA in the state ID. Then you will see a page about Massachusetts Special Handling (see screenshot). If you complete this it will carry to the Massachusetts return and it will not be taxable. Here's how to get there:
If you have more questions about this, ask in the comment box below.
I have a 1099-R from Massachusetts and Box 12 says NON-TAXABLE, but it is showing as Taxable on my State Return. I never got the special handling page. Help!
Go back to the Federal section of the program.
Make sure you have selected Massachusetts here in order to have the state return exclude any nontaxable retirement income.
I have a similar question for filing my State return for Massachusetts. I received a full distribution from a life insurance policy, and it has gross distribution and a taxable amount. My MA return is looking to tax the taxable amount at 5% - is this correct? The taxable portion was also included in the Federal tax calculation of my adjusted gross income. I could not find a good answer to MA's treatment of insurance distributions. Thank yu!
Massachusetts follows the federal rules. They will tax surrender amounts above premiums paid. The MA tax rate for 2020 is 5%.
How do I indicate on my tax return that the income is not subject to mass state income tax
Please refer to LindaB1993 to make sure the income is not taxable on your Massachusetts's return.