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ng128
Returning Member

MA Tax: Can I spread covit related IRA withdrawl and tax over 3 years as with Federal?

 
5 Replies
RayW7
Expert Alumni

MA Tax: Can I spread covit related IRA withdrawl and tax over 3 years as with Federal?

According to TIR 20-9: Massachusetts Tax Implications of Selected Provisions of the Federal CARES Act:

 

Yes, the Act also provides for coronavirus-related distributions to be included in a taxpayer’s income ratably over a three-year period unless a taxpayer elects otherwise.

 

The act has many provisions related to CARES,

-Please follow these link(s) for more  information-

TIR 20-9: Massachusetts Tax Implications of Selected ...

How does the CARES Act impact Massachusetts state tax ...

ng128
Returning Member

MA Tax: Can I spread covit related IRA withdrawl and tax over 3 years as with Federal?

Thanks for replay. One follow up. Turbo Tax has a question regarding spreading tax over 3 years for Federal Tax but not Ma state tax. How do I reflect the three year option for my state return in Turbo tax. Thanks.

ReneeM7122
Level 8

MA Tax: Can I spread covit related IRA withdrawl and tax over 3 years as with Federal?

No, unfortunately at the moment, you can't spread the tax for early IRA withdrawal over 3 years for the state as you can with Federal. 

The software will be updated as soon as possible.  TurboTax Online will update automatically.  Follow these steps for the online version.

Please follow this link for regularly updated information.  Here is a TurboTax article about tax relief from the CARES act. 

ng128
Returning Member

MA Tax: Can I spread covit related IRA withdrawl and tax over 3 years as with Federal?

Thanks for responding to my question. However TurboTax sent out an update for Ma. last week allowing me to spread the income and related state tax over three years consistent with IRS guidance. 

LinaJ2020
Expert Alumni

MA Tax: Can I spread covit related IRA withdrawl and tax over 3 years as with Federal?

Yes, the TurboTax program has been updated for both Federal and MA.

Here are the steps:

 

In TurboTax online,

  • Sign in to your account and select Pick up where you left off
  • From the upper right menu, select Search and type in 1099r and Enter
  • Select the Jump to 1099r
  • Follow prompt
  • On screen," Do any of these situations apply to you?" select the first one related Covid
  • Follow prompts

For State, 

  • To your left, select State
  • On-screen, Status of your state returns, under Massachusetts, select Continue
  • Follow prompts
  • The information from the federal will be transferred over.

For example, if you receive a $90,000 coronavirus-related distribution in 2020, you would report $30,000 in income on your federal income tax return for each of 2020, 2021, and 2022. For federal, you will see $90,000 shown on line 4a for reporting purposes and $30,000 on line 4b as taxable. On MA return, $30,000 will show on line 9 on Form 1.  

 

For more details, click here:  Covid Relief

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