topic Massachusetts return - What is this pension/annuity form? in State tax filing

Massachusetts return - What is this pension/annuity form?

steph0763 — Wed, 03 Mar 2021 23:10:14 GMT

I just filed my state taxes, and included an annuity we inherited from my husbands father. It's supposed to be exempt from MA state taxes since it was due to death, and it was a public/state employee pension/annuity. That part came out accurate, but because I marked it as waived, it's making me file by mail. I printed my return and it has an additional form that says:

Additional Information from your 2020 Massachusetts Return

Form 1: Resident Tax Return

Taxable Pensions and Annuities

Explanation: 10 Year Average Pension

My question is, what does "10 Year Average Pension" mean? I tried googling it and found nothing. I want to make sure I entered everything correctly.

Re: Massachusetts return - What is this pension/annuity form?

ErnieS0 — Thu, 04 Mar 2021 21:17:57 GMT

Massachusetts will not tax certain pension income received by nonresidents if payments are made at least annually and spread over the actuarial life expectancy of the beneficiaries, or if payments are spread over at least a ten-year period. Qualifying retirement distributions include:

§ 401(k)
§401(m)
§402(g)
§403(b)
§408(k)
§415, or
Any other applicable limitation on contributions or benefits

Related Resource:

Learn about tax treatment of pensions in Massachusetts

Re: Massachusetts return - What is this pension/annuity form?

steph0763 — Thu, 04 Mar 2021 23:24:11 GMT

We are residents, not non-residents. and we took a lump sum distribution and withheld federal tax.

My husbands father was receiving a pension which included this annuity, but there was no pension to inherit; just the remainder of the annuity.

What does the "10 year average pension" indicate?