After entering the Code 7 in Box 7 of my 1099R for my Roth conversion; the next TurboTax scree asks: "Where is your distribution From?" Do I choose "C" or "N" in the options below? If I choose "N"; I incur Mi-State Taxes on my Conversion If I choose "C"; I am returned my Mi-State Taxes that where withheld during the conversion. _____________________ The Key to Choose From _____ Michigan Special Handling of Pension Distributions TurboTax Michigan uses the following pension codes: M - Military pension for retirement from the US Armed Forces G - Qualified government or Social Security C - Current year conversion from a traditional IRA to a Roth IRA N - Pension/IRA distributions received before retirement age/None of the Above P - Other qualified IRA distribution P - Qualified private-source pension
Yes, Michigan uses pensions and retirement accounts interchangeably. I provided a few references for you. @msmoldy
"Retirement and pension benefits include most income that is reported on Form 1099-R for federal tax purposes. This includes defined benefit pensions, IRA distributions, and most payments from defined contribution plans." Retirement and Pension Benefits
See page 2 of 4884 Instructions 2024
You should select Code C: (Current year conversion from IRA to Roth IRA). The conversion qualifies for the pension subtraction if you qualify.
See Are conversions from a regular IRA to a Roth IRA subject to Michigan individual income tax?
Thank you.
That makes sense as I turned 59 1/2 in June, 2024 and when I put the date of my Roth conversion on Nov 2024; it subtracted the state taxes that were withheld.
I tested it by inputting May and then, June. The software switched it back and forth.
So my follow-up question becomes
Is this only with pensions? Is my Traditional IRA considered a pension?
I converted from a traditional IRA into a Roth. I am confused as to the category defined as a pension.
Yes, Michigan uses pensions and retirement accounts interchangeably. I provided a few references for you. @msmoldy
"Retirement and pension benefits include most income that is reported on Form 1099-R for federal tax purposes. This includes defined benefit pensions, IRA distributions, and most payments from defined contribution plans." Retirement and Pension Benefits
See page 2 of 4884 Instructions 2024