Massachusetts Roth IRA Distributed Contributions

[user17701540508]

Distributing Roth IRA contributions are never federally taxable/penalized. I assumed for the MA state return, the same would be true. However, the tax software is made my Roth IRA Contributions that I distributed taxable on the state return….is this a mistake in the software?

[ReneV4]

The issue you are having could be due to several different factors.

I would like to take a deeper look at this. However, I need a diagnostic file which is a copy of your tax return that has all of your personal information removed. You can send one to us by following the directions below:

TurboTax Online:

1. Sign into your online account.
2. Locate the Tax Tools on the left-hand side of the screen.
3. A drop-down will appear. Select Tools
4. On the pop-up screen, click on “Share my file with agent.”
5. This will generate a message that a diagnostic file gets sanitized and transmitted to us.
6. Please provide the Token Number that was generated in the response.

TurboTax Desktop/Download Versions:

1. Open your return.
2. Click the Online tab in the black bar across the top of TurboTax and select “Send Tax File to Agent” *
3. This will generate a message that a diagnostic copy will be created.  Click on OK and the tax file will be sanitized and transmitted to us.
4. Please provide the Token Number  (including the dash) that was generated in the response.

*(If using a MAC, go to the menu at the top of the screen, select Help, then, “Send Tax File to Agent”) 

[user17705025772]

Hello, I am not sure I feel comfortable doing that. I called support, and they said there was a known software issue with Roth IRA distributions that should be resolved in a week. Are you aware of this issue and can you provide a status update?

Thanks

[DianeW777]

Please clarify if you are still having the same experience with your Massachusetts (MA) state return?  When you get to the MA return double check you are answering the questions correctly for the Roth IRA.  In my test the Roth IRA did not carry to the MA as a taxable income.

Massachusetts generally does not tax qualified Roth IRA or Roth 401(k) distributions, following federal rules. If a distribution is tax-free on your federal return (held 5+ years and age 59½+, or meets exceptions), it is usually not taxable in Massachusetts. Non-qualified distributions, however, may be taxable on earnings. 

@user17705025772 

[user17701540508]

Hello, yes, still an issue. I didn’t realize this happened until after I had e-filed, so I believe I need to amend the return, but this is not yet available in Turbo Tax.

Im not sure withdrawing contributions to a Roth IRA is technically a “qualified withdrawal” but it’s certainly not taxed or penalized at the federal level. This is true at the state level as well right?

What should I do?