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sandano
Returning Member

inherited roth distribution

I received a 1099-R for  a distribution from an inherited Roth.  It was coded "T" and was considered non taxable on my federal form. My state return (MA) is pulling the information from the federal form but is treating it as taxable income. I thought all roth distributions are non taxable. 

2 Replies
ColeenD3
Expert Alumni

inherited roth distribution

Code T means an early withdrawal and it is unknown if the 5-year holding period has been met and an exception applies. If the holding period is not met, the earnings are taxable.

 

You can always withdraw contributions (but not earnings) that you made to your Roth IRA tax and penalty free at any time. Additionally, the Ordering rules for withdrawals from a Roth IRA are: first from regular contributions, then from Conversion and rollover contributions, on a first-in, first-out basis and finally from Earnings on contributions.

Please note: A qualified distribution from a Roth IRA is tax-free and penalty-free, provided that the five-year aging requirement has been satisfied and one of the following conditions is met:

  • Over age 59½
  • Death or disability
  • Qualified first-time home purchase

non-qualified distribution is subject to taxation of earnings and a 10% additional tax unless an exception applies. For Roth IRAs, you can always remove post-tax penalty contributions (also known as "basis") from your Roth IRA without penalty.

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sandano
Returning Member

inherited roth distribution

Thank you for replying, I guess I need to be more specific with my question. I believe there's a problem with the MA TT form. This withdrawal was a tax free inherited Roth IRA RMD which turbo tax federal form & questions put on my federal 1040 as non taxable. When the information is transferred to the MA form it just puts in amount for the RMD as taxable. The MA form does not ask any qualify questions on the withdrawal. Has anyone else run into this problem? 

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