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hsilverm
New Member

I did a rollover to an ira of $20,000 from my retirement account and claimed a pension exclusion on my Maryland tax and now it is being denied

 
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3 Replies

I did a rollover to an ira of $20,000 from my retirement account and claimed a pension exclusion on my Maryland tax and now it is being denied

what is the question. 

 

if you completed the federal return correctly, the rollover from your retirement account to your IRA would not be part of your Adjusted Gross Income (AGI), which is the starting point of the MD return,  

 

Why did you claim an exclusion on your MD tax return? 

I did a rollover to an ira of $20,000 from my retirement account and claimed a pension exclusion on my Maryland tax and now it is being denied

If the funds were eligible for rollover, and you completed the rollover properly, they were not taxable income on your federal or state return, and so there would have been no need to claim an exclusion.

 

If the workplace retirement account was a type of account that was not eligible for rollover, then you made a $20K withdrawal that would have been fully taxable on your federal and state tax returns.  Maryland allows an exclusion of up to $34,300 of pension income (less social security) from your taxable income, but the withdrawal would be fully taxable on your federal return.  Then, putting the money into an IRA would have been a contribution, not a rollover, and would have been an excess contribution since it was more than $7500 (and may have been more than your compensation from working).

 

So, it's unclear how you could have a rollover AND a state pension exclusion at the same time.

 

We need to know more about the 1099-R you got from the retirement plan, what kind of plan it is, and whether it is a qualified or non-qualified plan. 

dmertz
Level 15

I did a rollover to an ira of $20,000 from my retirement account and claimed a pension exclusion on my Maryland tax and now it is being denied

A rollover makes the income nontaxable.  With nothing being taxable, the income is already excluded from your federal AGI which is the starting point for calculating Maryland taxable income.  Since the income is already excluded, you do get to exclude it again as a Maryland pension exclusion.

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