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bgasparo
New Member

Turbo tax says I don't owe any state tax, Smartasset.com and MD comptroller office says I do. SS income and 401k income is filled in. Why is this?

 
4 Replies
ThomasM125
Employee Tax Expert

Turbo tax says I don't owe any state tax, Smartasset.com and MD comptroller office says I do. SS income and 401k income is filled in. Why is this?

I would need to have a more detailed description of your issue to be more helpful, however 401-k pension plan distributions are tax exempt in Maryland if you are 65 or over, up to $33,100.

 

All social security income is tax exempt in Maryland as well.

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bgasparo
New Member

Turbo tax says I don't owe any state tax, Smartasset.com and MD comptroller office says I do. SS income and 401k income is filled in. Why is this?

Thank you, this might be the answer.

bgasparo
New Member

Turbo tax says I don't owe any state tax, Smartasset.com and MD comptroller office says I do. SS income and 401k income is filled in. Why is this?

When I quit work I moved a 401K acct into another account which is an IRA.  So both of these accounts are IRAs.  I filled out the section for 1099-R's following all the boxes and check marks and rechecked these several times.  Apparently Maryland does not tax 401K withdrawals but does tax IRA withdrawals.  I've done this for several years and it always showed I owed tax on these accounts, this year it doesn't.  Maryland Comptrollers office says I owe about $1000.  I just don't know why Turbo Tax didn't pick this up this year.

AmyC
Employee Tax Expert

Turbo tax says I don't owe any state tax, Smartasset.com and MD comptroller office says I do. SS income and 401k income is filled in. Why is this?

Yes, the IRA does not count. In the federal section, be sure you have it marked as an IRA. Can you see form 502CR to see which line it is going to?

 

Resident instructions page 7:

Line 10a. PENSION EXCLUSION. You may be able to subtract some of your taxable pension and retirement annuity income. This subtraction applies only if:

a. You were 65 or over or totally disabled, or your spouse was totally disabled, on the last day of the tax year, AND

b. You included on your federal return taxable income received as a pension, annuity or endowment from an “employee retirement system” qualified under Sections 401(a), 403 or 457(b) of the Internal Revenue Code. [A traditional IRA, a Roth IRA, a simplified employee plan (SEP), a Keogh plan, an ineligible deferred compensation plan or foreign retirement income does not qualify.]

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