topic Does Alabama tax IRA rollovers? How do I report it on the state side. in Retirement tax questions

Does Alabama tax IRA rollovers? How do I report it on the state side.

hopewellmma — Tue, 03 Feb 2026 13:51:22 GMT

While importing info on the federal side, the system clearly asked if I rolled the money over. I answered Yes. No such question was asked when entering info on AL side. How do I tell the system this distribution was rolled over within 60 days?

Re: Does Alabama tax IRA rollovers? How do I report it on the state side.

MaryK4 — Sun, 02 Feb 2025 20:49:56 GMT

Alabama does not tax IRA rollovers. Alabama uses the information from the federal return regarding the rollover so no other information is needed in the state section of TurboTax.

Re: Does Alabama tax IRA rollovers? How do I report it on the state side.

hopewellmma — Sun, 02 Feb 2025 20:57:33 GMT

The software prompted me to check this:

Pen Excl Wks: Taxable pension/IRA must be entered.

Taxable pension/IRA

Do I enter $0 for the taxable pension/IRA?

Re: Does Alabama tax IRA rollovers? How do I report it on the state side.

DavidD66 — Sun, 02 Feb 2025 22:21:05 GMT

Yes, enter $0 for "Taxable pension/IRA" if the rollover was the only retirement plan distribution you had.

Re: Does Alabama tax IRA rollovers? How do I report it on the state side.

Alabama user — Mon, 03 Mar 2025 04:34:24 GMT

I don't like this answer. I don't know where I'm entering the 0 (in original documents). I don't want to make an error. This is unacceptable on the TurboTax Alabama side. I'm getting "Pen Excl Wks: Taxable pension/IRA must be entered" when I check for errors. I can't find any information I've entered incorrectly. I don't want to randomly enter a 0 when I don't know which of 3 IRA/Roth IRA distributions it's going to affect. Thank you.

Re: Does Alabama tax IRA rollovers? How do I report it on the state side.

DawnC — Mon, 03 Mar 2025 04:52:35 GMT

The answer was for a taxpayer with only one distribution that was a full rollover. Your situation seems different. Alabama exempts most retirement income, so you need to tell TurboTax how much taxable retirement income you had on your federal return, so it can be subtracted off of your Alabama return. You can preview your Form 1040 and look on line 4b or 5b to find the taxable amount.

If you had no taxable income from the distributions on the federal return, as the OP here did, you would enter zero to the question. But if you do have an amount in 4b or 5b, you should enter those amounts so they are not taxed on your Alabama return. https://www.revenue.alabama.gov/individual-corporate/income-exempt-from-alabama-income-taxation/

Preview Form 1040 in TurboTax Online.

Use Forms Mode if you are using the desktop software. @Alabama user