If you IRA contribution is a deductible traditional IRA on the federal tax return, the federal AGI will be you income less the contribution - it is subtracted from your other income. If you file a MN tax return, the MN tax form starts with the Federal AGI. Therefore, the IRA contribution is not included in you starting MN income. The issue with the MN return software is that it adds the contribution back into MN income. It does so for the spouse under 70 1/2 on line 2 of the M1NC - even though that line asks for the IRA contribution for those over 70 1/2. TT and their people will tell you that you then need complete the worksheet for line 33 of the M1NC. They maintain that this worksheet will have a negative number and that will zero out the line 2 addition. The issue with this is the this worksheet is intended only for the filer who has an emplyer retirement plan at work. In our case, my spouse does not have a plan at work, however, TT still insists that we complete the worksheet. In our case, completing the worksheet does not zero out the line 2 addition.
