In 2023, my spouse and I withdrew all of our Roth IRA contributions, plus $10K each, to buy our first home. We've never withdrawn from our Roth IRAs before. We meet the 5 year holding requirement, so this shouldn't be taxable federally or in MA (see https://www.mass.gov/info-details/tax-treatment-of-non-government-pensions-in-massachusetts#keogh-pl...).
Everything is fine for our federal return, but I'm having a problem with the MA taxes.
Under "Taxable IRA/Keogh Distributions", I entered:
Other contributions previously taxed by Massachusetts - the total value of our contributions over the years
Total distributions received in previous years - $0
This is correctly preventing us from paying MA tax on the withdrawn contributions.
But, TurboTax is still charging us MA taxes on the remaining $20,000. I can see it in MA Form 1, line 9 and Schedule X, line 2.
I believe Schedule X, line 2 should be 0. How do I fix this? Do I just hack it by adding $10K to the line "Other contributions previously taxed by Massachusetts", even though it's not really contributions?
