What is "Other Contributions Previously Taxed by Mass." in the "Taxable IRA/Keogh Distributions" section of Mass. state return? I maxed out a backdoor roth this year.

[benjamink]

Thanks for providing this information. I have two clarifying questions about the word "previous" in both questions.

First, some background:

• It is currently February 2022 and I'm filing taxes for 2021.
• All my contributions to my traditional IRA were non-deductible and made in MA and were therefore taxed by both the Fed and MA.
  
  • For tax year 2020 I contributed $3000
  • For tax year 2021 I contributed $6000
• For tax year 2021 I converted $9000 in traditional IRA to Roth IRA (this was the full balance of the traditional IRA, there were no earnings at the time of the conversion).
  • My current traditional IRA balance is $0.

Now my questions:

• "Other Contributions Previously Taxed by Massachusetts": When this question says "Previously", do they mean "Taxed in tax years 2020 or before (in which case the answer is $3000) or "Taxed in tax years up-to and including 2021" (in which case the answer is $9000).
  
  • The word "previous" in the question suggests the answer should be $3000, but if this number is less than $9000, won't TurboTax mistakenly think I need to pay double-taxes on the remaining $6000 (as that $6000 was already taxed by MA)?
• "Total Distributions Received in Previous Years": I assume this means total distributed in tax year 2020 or earlier, so the answer would be $0 (because all my conversions were in 2021).

I think the correct answers in my case are: $9000 for question 1 and $0 for question 2.

Does that sound correct?

[JohnB5677]

You are correct.  You should enter $9,000 for previous years and "0" for distributions received in previous years.

[Cambridge50]

Hi -

I, too, am confused about the "other contributions previously taxed by Massachusetts."   I understand the concept, but a little stunned because of the work involved to find the right figure.

Two questions:

1. Does IRA/Keough include all kinds of IRAs including Roth and SEP?

2. I've live in Mass. since 1991, and contributed to an IRA most years. I'm going to find it very difficult to determine the amount contributed before 2003, when I started using Quicken.  Will the investment firms have records of that? (Or could I take the 'cost basis' as the amount in each fund?)  Do I have to dig out my tax returns from 1991-2003 to find this info?

Thanks.

[AmyC]

1. No. A  SEP may be deductible. See View non-government pensions | Mass.gov for the rules. For a complete listing of all plans and how it is taxed,  View tax treatment of retirement plan contributions and distributions

2.Your cost basis should be the amounts you contributed which is the desired number.

@Cambridge50

[benjamink]

I did a little experimentation before I submitted my taxes this year. Depending on how you answer these two questions, the numbers you provide are put into the worksheet below. The result of that worksheet is used to fill-in Massachusetts Schedule X Line 2 "Taxable IRA/Keogh and Roth IRA conversion distributions".

The worksheet comes from the MA Form 1 Instructions for Schedule X Line 2. I found the additional context provided by the worksheet helpful in understanding how to answer the questions, so in case others think the same way, here is the worksheet:

[oreoshark1]

I'm doing my 89-year old mother's return and have been for years.  I, too, don't remember this question coming up.  ALL of her contributions were made while being a teacher in NY.  She moved to MA in 2014, having received RMDs from this IRA since living in NY. 

SO, for question #1, is it the total of what she's received while living in MA (since 2014)

And for question #2, is it the same amount as in #1 since previous distributions were taxed in NY?

I have NO WAY of determining what she actually contributed from when the earth cooled until she retired in 1987. 🙂

Thanks!

Holly

[JohnB5677]

Question #1, is it the total of what she's received while living in MA (since 2014)

• The Massachusetts issue will not affect your mother at all. 
• First it is a pension and not an IRA. and
• Second, any contributions would have been made in NY and she did get the deduction for them.

Question #2, is it the same amount as in #1 since previous distributions were taxed in NY?

• No, any contributions to a pension plan that she made while in NY would have reduced her taxable income at the time.  This would not affect MA at all.

I have NO WAY of determining what she actually contributed from when the earth cooled until she retired in 1987.

• The only thing that would possibly be in question would be an IRA that she would have contributed to while she lived in MA. 
• You would be able to go to the broker that set it up to get contribution details.

[Zidane]

I tried reading through all the information that others have posted, but I still do not understand this section.

I am in my second year of IRA  contributions and Roth Conversions:

2021 - Contributed $6,000 to Traditional IRA, Converted $5,979 to Roth IRA (-$21 in losses before conversion)

2022 - Contributed $6,000 to Traditional IRA, Converted $6,000 to Roth IRA

Other Contributions Previously taxed by Massachusetts = X

Total Distributions Received in Previous Years = Y

Could someone please explain how to get X and Y?  Thank you!

@AmyC 

[fanfare]

you use up your MA basis (contributions as an MA resident) if and as such distributions are not taxed by MA, if you were not a lifelong MA resident, some contributions might not be MA basis.

once you use up your basis, the rest is earnings in your IRA and you will be taxed on it.

As I recall MA does not prorate the basis and earnings each year, like IRS does.

"previously taxed" means taxed on a MA return you filed prior to the tax year you are filing now.

There should be no confusion.

We're all on the honor system here.

[fanfare]

[[ tweaked above ]]

[apple-Sweet-z]

Emmm,

 I have the same question. 
let me mark this thread and read more…

[blattanzi111]

Hi - It's a year later and I am back stuck on this same darn page. TT did not retain last year's entry... argh. And the worksheet was not retained in the return, so I don't see that either!  argh.  So I am trying to figure this out anew.  If I understand correctly, I have to

1) for "Other Contributions"  add up the Cost Basis of Every IRA, Roth account I have... but NOT 403b, and NOT SEP, correct?

2)for Total Distributions Received in Previous Years, I add up everything I've taken out from:  Trad IRA, Roth IRA, ... and SEP and 403b as well? or not those two.

This has to be the most vague, confusing page in all of Turbo Tax (and maybe the mass. Tax Code)

Thanks for any light you can shed!

Bill

[DaveF1006]

This is information used to update/create form 8606 in your return. The IRS states you must use 8606 to report:

• Nondeductible contributions you made to traditional IRAs.
• Distributions from traditional, SEP, or SIMPLE IRAs, if you have ever made nondeductible contributions to traditional IRAs.
• Conversions from traditional, SEP, or SIMPLE IRAs to Roth IRAs.
• Distributions from Roth IRAs.

In this case, you would not include distributions from plans such as 401K or 403B plans so leave the 403B information out of the return but include any SEP information.

About Form 8606 

[Dennis Merritt]

I just wrestled with this as well, very confusing. But if you look at how Schedule X worksheet that uses these numbers works, it turns out that the first number is entered on line C, the second on line D and line D is subtracted from line C and is zero if D is larger than C. In other words, the total previous distributions is only relevant if the previous contributions are greater than the previous distributions. (In my case, with no previous contributions, there was no point in trying to figure previous distributions.)