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Maryland Pension Exclusion Income and Rollover IRAben

I had a workplace 401K.  When I left that job, I had the 401K funds directly transferred to a rollover IRA at my brokerage.  I kept this rollover IRA separate from all other IRAs and other accounts.  When I withdraw this money (after age 65) will it be eligible for the Maryland pension exclusion calculation as a defined benefit plan?  It is not really a traditional or a Roth IRA  (or a Keogh or SEP plan or ineligible deferred compensation) which are also excluded.  This seems to be a gray area in the rules.  Many people are advised to remove money from their old workplace 401Ks because the prior company could go out of business or merge which could create problems accessing 401K benefits

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2 Replies
PaulaM
Expert Alumni

Maryland Pension Exclusion Income and Rollover IRAben

Once a 401k is rolled over to an IRA, it loses its pension exclusion in Maryland. The rollover makes it a traditional IRA, regardless of its original source.  See first link below for reference. 

There is the Senior Tax Credit and Social Security benefits exclusion available for seniors in second link below.
 

See part C, from Comptroller of Maryland


Senior Citizens and Maryland Income Taxes


 

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dmertz
Level 15

Maryland Pension Exclusion Income and Rollover IRAben

A rollover IRA is a traditional IRA.

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