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Question

What is "Other Contributions Previously Taxed by Mass." in the "Taxable IRA/Keogh Distributions" section of Mass. state return? I maxed out a backdoor roth this year.

Forum|Forum|5 years ago
February 14, 2021
4 replies
0 views

The section says: "Total IRA/Keogh plan distributions received during 2020 are $6,000. To determine the taxable amount for Massachusetts, enter the following information...". "Other Contributions Previously Tax by Massachusetts" - should this be $6,000 since I completed a Backdoor Roth so my $6,000 distributions were initially post-tax contributions to a Traditional IRA and then converted to a Roth IRA?

TurboTax Deluxe Online

JohnB5677

Yes, those were previously taxed by Massachusetts, and it should be posted as such..

In addition, the IRS gives you a deduction when you make a contribution to a traditional IRA. Massachusetts does not. You must keep record of your IRA contributions and they can be deducted in Massachusetts when you start cashing out the IRA .

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Jdcasares129

@JohnB5677 I have a quick followup question. My Taxable IRA/Keogh Distributions for 2020 was added up as $16,231. I believe the sum is from my withdrawal in 2020 of a 2018 excess Roth IRA contribution of $5,500; Code J in my 1099-R, and my conversion of my Traditional IRA contributions to a Roth IRA, which totaled $10,731; Code 2 in my 1099-R.

My traditional IRA contributions are taxable because of my income. Between 2018-2020, I contributed 17,400 in Roth and nondeductible Traditional IRA contributions. When it asks for 'Other contributions previously taxed by MA', should I enter in $17,400 or just the $16,231?

JohnB5677

I believe it may be even more than that.

You never got any deduction in Massachusetts for any contribution to either Traditional or ROTH IRA's. The total should include all IRA contributions, not just the ones that the IRS gave you credit for.

That number is probably significantly larger than the amount you withdrew. TurboTax will carry it over any excess to the following year.

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Dianaboston

I never saw this section before when doing my MA returns: "Taxable IRA/Keogh Distributions". Or I don't remember it from previous TT years. Doing my 2021 return now. I'm one of those rare people who kept track of contributions to my IRA over the years that I already paid taxes on. I never remember MA asking for this info, as I'd assumed it would carry over the figures from my federal 8606 forms. In the MA form section "Other contributions previously taxed by MA" section I entered the amount from my 2021 8606 form (why didn't TT do this for me??). Then below, there is a field "Total Distributions Received in Previous Years".... What does this mean? The sum of TOTAL distributions from my IRA since I've been withdrawing the RMD each year? And what does this sum do? I notice my MA tax dropped almost 100 dollars when I entered the amount I previously paid taxes on.. However, when I entered the sum of total distributions from my IRA, it "took away" that 100 dollar "credit"... I do NOT understand what is going on with this at all... Anyone have any ideas? Thanks!

AmyC

Employee

MA does not allow the federal IRA deduction but instead taxes it. So, if you lived in MA the whole time, the entire amount paid in would be the basis. If you lived elsewhere, it would not be the same. See Massachusetts Taxable IRA distributions - TurboTax Support for more details.

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Dianaboston

Thanks Amy…. So, what information do I put in Question 1 “Other Contributions previously taxed by MA “. I have entered the amount of my IRA distribution from my 8606 form, that I previously paid taxes on. Is this not correct? Or do I enter here the entire total of my non-deductible IRA contributions over the many decades that I paid taxes on? This information I doubt I’d ever be able to re-create……

Also, I do not remember ever having to answer this question on my MA return when using TT to do my returns.. Is this something new?

And, for Question 2, “Total Distributions received in previous years”…. I assume this is the sum of total distributions since when I first starting taking the RMD from my IRA?

Thanks so much!

Diana

Cambridge50

Hi -

I, too, am confused about the "other contributions previously taxed by Massachusetts." I understand the concept, but a little stunned because of the work involved to find the right figure.

Two questions:

1. Does IRA/Keough include all kinds of IRAs including Roth and SEP?

2. I've live in Mass. since 1991, and contributed to an IRA most years. I'm going to find it very difficult to determine the amount contributed before 2003, when I started using Quicken. Will the investment firms have records of that? (Or could I take the 'cost basis' as the amount in each fund?) Do I have to dig out my tax returns from 1991-2003 to find this info?

Thanks.

AmyC

Employee

1. No. A SEP may be deductible. See View non-government pensions | Mass.gov for the rules. For a complete listing of all plans and how it is taxed, View tax treatment of retirement plan contributions and distributions

2.Your cost basis should be the amounts you contributed which is the desired number.

@Cambridge50

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Zidane

I tried reading through all the information that others have posted, but I still do not understand this section.

I am in my second year of IRA contributions and Roth Conversions:

2021 - Contributed $6,000 to Traditional IRA, Converted $5,979 to Roth IRA (-$21 in losses before conversion)

2022 - Contributed $6,000 to Traditional IRA, Converted $6,000 to Roth IRA

Other Contributions Previously taxed by Massachusetts = X

Total Distributions Received in Previous Years = Y

Could someone please explain how to get X and Y? Thank you!

@AmyC

fanfare

Employee

you use up your MA basis (contributions as an MA resident) if and as such distributions are not taxed by MA, if you were not a lifelong MA resident, some contributions might not be MA basis.

once you use up your basis, the rest is earnings in your IRA and you will be taxed on it.

As I recall MA does not prorate the basis and earnings each year, like IRS does.

"previously taxed" means taxed on a MA return you filed prior to the tax year you are filing now.

There should be no confusion.

We're all on the honor system here.