Question

Returning withdrawal from IRA with CARES act

Forum|Forum|5 years ago
March 15, 2021
1 reply
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I did a CARES Act IRA withdrawal last year and have paid money back to it since taking it out. On the federal IRS tax forms there is space for me to put how much was repaid, but I can't find a comparable field on the Massachusetts state tax return. I've tried calling the Mass Department of Revenue but haven't been able to get through to anyone. Does anyone know how to mark how much was repaid to the IRA on a Massachusetts state tax return.

M

MAK70

Massachusetts will use the 1040 Line 4b amount for the retirement income, so if you have the federal ROLLOVER properly entered, it will not be included in Massachusetts income so you do not have to make any adjustments in the state section of TurboTax.

Income from a retirement plan are distributions (amounts) paid out of the fund - rollovers are not taxable income in Massachusetts.

S

speakerbugAuthor

I'm not sure that helps in this case. It's not actually a rollover, it's a pay back to a distribution which is allowed because of the CARES act.

M

MinhT1

In TurboTax, you do not enter directly the repayments of your distributions on a tax form.

You follow the TurboTax interview, and TurboTax will transfer the repayments to the correct form and the repayments will flow through to your state return.

In fact, the IRS considers the repayments as rollovers (with the exception that the 60-day rule does not apply. As such, the amounts repaid are not taxed.

Enter your form 1099-R normally. After entering your form 1099-R, click Continue until you reach the screen Did [name] repay any of this distribution?. Check the radio button which corresponds to your situation then click Continue and follow the interview. Enter the amount repaid as a rollover and it will be excluded from taxation. You will still have the credit for taxes withheld shown on your form 1099-R.

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