Instructions For Form 1 - Massachusetts Resident Income Tax - 2013 Page 21
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2013 Form 1 — Line by Line Instructions
Line 2f: Total Exemptions
specific pensions which are exempt. If your pen-
ceeds from contributions in one lump-sum distrib-
sion is exempt, enter “0” in line 4 and note the
ution, your original contributions to the retirement
Add items 2a through 2e and enter the total in line
source on the dotted line to the left.
system are not taxable. Noncontributory pension
2f. This amount should also be entered on line 18
income received after a lump-sum distribution is
of Form 1.
If your pension is not exempt, you should generally
fully taxable and should be reported in line 4.
enter in line 4 the taxable amount reported on your
5.25% Income
U.S. Form 1040, line 16b, or U.S. Form 1040A, line
How do I report lump-sum distributions?
12b. In some cases, however, Massachusetts law
If you were an employee of the U.S., Massachu-
Note: DOR and the IRS maintain an extensive ex-
requires an adjustment to the federal amount.
setts or one of its political subdivisions and left
change program, routinely sharing computer tapes
Distributions from annuity, stock bonus, pension,
public em ployment prior to retirement, you are
and audit results. Discrepancies between income,
profit-sharing or deferred payment plans or con-
not required to report as income the lump-sum
deductions, and schedules reported federally and
tracts described in Sections 403(b) and 404 of the
distribution of your previously-taxed pension
on this return, except those allowed under state
U.S. IRC must be adjusted to account for your con-
contributions.
law, will be identified and may result in a state audit
tributions that have been previously taxed. Sub-
Lump-sum distributions of qualified employee ben-
or further investigation.
tract from such income (as reported on your U.S.
efit plans in excess of the employee’s contributions
Form 1040, line 16a, or U.S. Form 1040A, line 12a)
Line 3. Wages, Salaries, Tips and
which were previously subject to Massachusetts tax
the amount of your contributions which was pre-
(or not previously excluded from Massachusetts
Other Employee Compensation
viously taxed by Massachusetts until the total of
tax) must be reported in line 4. Generally, qualified
Report in line 3 total state wages and allocated tips
your taxed contributions is received. If your pen-
rollovers are not taxable in Massachusetts to the
from Form(s) W-2. Income earned by a Massachu -
sion falls into this category, enter the adjusted
extent they are not taxable on your U.S. return.
setts resident in another state is subject to taxation
amount in line 4. If you are receiving distributions
Lump-sum distributions related to IRA/Keogh and
in Massachusetts. Generally, your total wages and
from an IRA or Keogh plan, do not report the in-
Roth IRA distributions should be reported in line 9,
allocated tips will be the same amount reported on
come here; instead, see the instructions for Sched -
“Other Income (from Schedule X).”
your U.S. 1040 or 1040A, line 7; or 1040EZ, line 1.
ule X, line 2.
Rollover from a traditional IRA to a Roth IRA.
Note: Following are instances that require an ad-
Note: Massachusetts does not tax Social Security
Taxpayers are allowed to make partial or complete
justment to these amounts:
income; therefore, you should not report such in-
rollovers from existing IRAs to Roth IRAs. Any
come on Massachusetts Form 1.
Massachusetts Legal Residents Working
taxable portion of these rollovers included in fed-
in a Foreign Country
What pensions are exempt?
eral gross income is also included in Massachu -
Income earned by a Massachusetts resident in a
Pension income received from a contributory
setts gross income, except for amounts previously
foreign country is subject to taxation in Massachu-
annuity, pension, endowment or retirement fund
subject to Massachusetts personal income tax. See
setts. If you excluded part or all of the compensa-
of the U.S. Government or the Commonwealth of
Schedule X, line 2 instructions for further details.
tion earned in a foreign country on your U.S. return
Massachusetts and its political subdivisions.
Line 5. Interest from Massachusetts
(under Section 911 of the U.S. IRC), you must in-
Pensions from other states or its political subdi-
Banks
clude any such amount in line 3 for Massachusetts
visions which do not tax such income from Mass -
tax purposes.
Enter in line 5a the total amount of interest re-
achusetts or its political subdivisions may be
ceived or credited to deposit accounts (term and
eligible to be deducted from Massachusetts taxable
State or Local Employees Contributing to
time de posits, including certificates of deposit, sav-
income. This pension income, however, should be
Pension Plans
ings accounts, savings shares, and NOW accounts)
reported in line 4. Refer to Schedule Y, line 13 in-
If you are a Massachusetts state, city, town or
in Massachusetts banks. Then, enter your exemp-
structions to determine eligibility for this deduction.
county employee and contributed to your pension
tion amount in line 5b (if married filing jointly,
plan, enter in line 3 the Massachusetts W-2 state
Noncontributory pension income or survivorship
enter $200; otherwise, enter $100). Subtract line
wage amount. This is generally box 16 of Form
benefits received from the U.S. uniformed services
5b from 5a and enter the result in line 5, but not
W-2. This amount will be higher than the U.S.
(Army, Navy, Marine Corps, Air Force, Coast Guard,
less than “0.”
amount because your pension contributions are
commissioned corps of the Public Health Service
Note: This exemption amount does not apply to
excluded from your income for U.S. tax purposes.
and National Oceanic and Atmospheric Adminis-
your U.S. tax return.
Contributions up to $2,000 per taxpayer may still
tration) is exempt from taxation in Massachusetts.
be deducted in lines 11a and/or 11b.
Do not subtract interest forfeited or penalties
Massachusetts state court judges who were ap -
charged to you for early savings withdrawal. You will
pointed on or after January 2, 1975 are participants
Line 4. Taxable Pensions and
be allowed to deduct these amounts on Schedule
in the Massachusetts contributory retirement sys-
Annuities
Y, line 2. All other interest, unless exempt, should
tem and their pensions are nontaxable. State court
Income from most private pensions or annuity
be entered on Massachusetts Schedule B. Interest
judges who were appointed prior to January 2,
plans is taxable in Massachusetts. Certain govern -
on an IRA/Keogh is not taxable until distributed.
1975 receive taxable noncontributory pensions.
ment pensions, however, are exempt under Mass-
Lines 6, 7 and 10. If showing a loss in lines 6, 7 or
If you retired under Chapter 32, Sections 56–60 of
achusetts law. In general, exempt pensions include
10, be sure to mark over the “X” in the box to the
Massachusetts General Laws and are a veteran who
contributory pensions from the U.S. Government
left. Do not use parentheses or negative signs to
began Massachusetts state service prior to July 1,
or the Commonwealth of Massachusetts and its
indicate losses.
1939, all or part of your pension income may be
political subdivisions, and noncontributory military
subject to tax. If you elected to receive your pro-
pensions. The following section describes some
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