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Level 1
posted Mar 5, 2024 9:23:09 AM

Backdoor Roth IRA entry causes MA State Tax

I did a backdoor Roth IRA in 2023 ($5900 for 2022 Financial Year and $6400 2023 Financial Year). My IRA provider has given 1099-R that shows a total gross distribution (box 1) of 12,300. I did convert all the money to Roth IRA (backdoor roth).

 

When I follow the instruction given below, the state tax liability went up approx. by $620. Is there any other step that I need to do to ensure the "after-tax" money that I converted from Traditional IRA to Roth IRA for backdoor is not taxed again?

 

https://ttlc.intuit.com/turbotax-support/en-us/help-article/retirement-benefits/enter-backdoor-roth-ira-conversion/L7gGPjKVY_US_en_US

 

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1 Replies
Expert Alumni
Mar 11, 2024 5:47:35 AM

You will need to enter your total traditional IRA contributions and any distributions you took in previous years on the "Taxable IRA/Keogh Distributions" screen during the MA state interview.