topic Massachusetts retirement contribution deduction amount calculated wrong in Retirement tax questions

Massachusetts retirement contribution deduction amount calculated wrong

realcoolhead — Sat, 20 Feb 2021 17:44:20 GMT

I got this message: Based on the information entered in your federal return you qualify for a retirement contribution deduction of $0 on your Massachusetts return.

Actually on the federal return I have over $4,000 self-employment tax, why is there no deduction on MA return? It was fine for the past years. Could it be related that this year my 1099 income is on 1099-NEC instead of 1099-MISC?

Re: Massachusetts retirement contribution deduction amount calculated wrong

KathrynG3 — Sat, 20 Feb 2021 21:59:01 GMT

Possibly. Be sure Form 1099-NEC is linked to your Schedule C. It would appear it has not linked. This will impact the Massachusetts return, as well.

I recommend deleting Form 1099-NEC and re-adding it in your Self-employed income & expenses section.

To do this in TurboTax, follow these steps:

First, delete Form 1099-NEC that is not linking.

From the left menu, select Tax Tools.
Select Tools.
Scroll to Delete a Form.
Scroll to Form 1099-NEC and select Delete and Delete Selected Form and Continue.

Next, return to your Schedule C by typing in schedule c in the search. Then, click the Jump to link.

Enter Form 1099-NEC under Common Income and continue. This should correct the issue. Run the Review again for the federal before returning to the state return review to confirm the state updated.

For more information, see:
What is Form 1099-NEC?

2020 Massachusetts Form 1 Instructions page 11 regarding Line 11 are unchanged from 2019. It states you may deduct amounts paid to Social Security, Medicare, Railroad, U.S. or Massachusetts Retirement Systems up to a maximum of $2,000....Payments to an IRA, Keogh, Simplified Employee Pension Plan (SEP), or Savings Incentive Match Plan for Employees (SIMPLE) Account are not deductible for Massachusetts income tax purposes.

Re: Massachusetts retirement contribution deduction amount calculated wrong

realcoolhead — Fri, 26 Feb 2021 03:14:24 GMT

I tried your suggestion but unfortunately it didn't work. I vaguely remember that I might have entered the 1099-NEC info under the personal section. Might that be the problem?