AL Preparers

[MAMalody]

I have a client in AL that is taking distributions for a 403(b). As far as I know, all the contributions to the plan are by the employer or deductible contributions by the client that is contribution not reported as income. As I look at the info, it would appear that this distribution is taxable. Am I misunderstanding the AL regs.

[Snaggletooth]

Not Taxable

I would say a 403(b) distribution is not taxable in Alabama. The salient feature is that nearly all government retirement plans are exempt in Alabama, and a 403(b) would be from a government-established plan. As opposed to a 401k plan which is a plan for a corporate employee.

IRAs are a different story, and complicated. I won't go there.

[Earl]

403b

It is my impression that a 403b is a defined benefit contribution plan similar to a 401k and as such would be taxable in Alabama. The only not taxable pensions for Alabama are defined benefit plans.

[MAMalody]

Do we have a tie breaker out there?

[Snaggletooth]

ChEAr$

Malody, send a private message to Harlan. He's done a thousand returns and lives in AL.

[ChEAr$]

Malody, send a private message to Harlan. He's done a thousand returns and lives in AL.

Non taxable.

But really, more than a mere thousand in the last 37 years.

never a Tennesse return however.

[MAMalody]

Thanks, I appreciate it.

[Earl]

403b

Harlan

Can you give me a cite where a defined contribution pension such as a 403b is non-taxable for Alabama. The only thing I found concerning pensions not being taxable in Alabama is for Civil Service Pensions, Alabama Retirement System (contributions are taxed at time of contribution), and defined benefit pensions.

And would this refer to all defined contribution pensions (such as 401k) be tax free.