Taxation of inherited ROTH IRA in Massachusetts

[Da5id]

I have an inherited ROTH IRA (original owner passed away in 2020).  Turbotax 2025 seems to think that a distribution taken from that IRA in 2025 is excluded from Federal taxable income but is *included* in Massachusetts 5% income.  Have I entered the 1099-R incorrectly? Am I missing some information that makes it taxable?

[Da5id · Accepted solution]

Asked Mass DOR by secure message about it.  Their response was:

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Dear Taxpayer,

Thank you for your recent inquiry.

Distributions from a Roth IRA account made to you are excluded from federal gross income. A distribution is excludable if the IRA is held for 5 years and it meets 1 of the following conditions:

• • You were at least 59 and a half years old when it was distributed
  • You are disabled
  • The distribution is made to a beneficiary or your estate on or after your date of death
  • The distribution is paying for a qualified first time homebuyer expense (up to $10,000)
    (If a distribution is made before the 5-year holding period expires, or doesn't meet 1 of the 4 above conditions, the distribution is not excluded from Massachusetts gross income. Any earnings on the contributions are included in federal and Massachusetts gross income instead.)

Thank you for visiting our website.

The Massachusetts Department of Revenue

[AmyC]

Since you have posted a response from the MASS DOR, you have clear legal authority and belief in their system that your inherited ROTH is not taxable. Keep the message and this Q & A for proof, in case you are ever audited.

I have been doing taxes a very long time and have seen many issues with MA and IRAs. Thank you!

Reference:

Mass Treatment of IRAs

Letter Ruling 82-124: Distribution to Beneficiary of an IRA