3 1099-R's per pg all identical, WRONG.

[AZ-Tax]

Got 3 1099-R with 1 of the 3 not having an amt in box 2a (taxable amt) and 2b box checked (taxable amt non determined). TP called issuer and was told "the 1099-R that is not identical to the other 1099's, is for the state". Well that may probably work (and still dont know about that) if I filed a paper return but TP is efiling and I dont see anywhere in my tax software where I can stop this amt from being reported on the state tax return.

[zeros]

Not Taxable on State?

Not sure why it wouldn't be taxable on the state but if it isn't, I believe you could just go on the state return side and subtract it there?

[Gary2]

I'm confused, why shouldn't it be reported on the state return?

In any event, there needs to be some way to make them different, as there are various ways in which the state taxable amount will be different from the federal, and could be different depending on the state of residence.

[FEDUKE404]

Exclude or just adjust?

I'm confused, why shouldn't it be reported on the state return?

In any event, there needs to be some way to make them different, as there are various ways in which the state taxable amount will be different from the federal, and could be different depending on the state of residence.

Other than situations where actual residency changed, most state returns start with the federal income amounts and then (perhaps) later make adjustments to that income consistent with the applicable state laws.

Are the three Forms 1099 from the same issuer? Did the recipient perhaps establish a policy/account long ago while living in a different state? What is the client's possible reason for having retirement income (now) that would be taxed by different states??

FWIW - a large number of Forms 1099-R that I encounter have the "taxable amount not determined" box checked...especially the IRA accounts.

FE

[AZ-Tax]

All the from the save issuer

Other than situations where actual residency changed, most state returns start with the federal income amounts and then (perhaps) later make adjustments to that income consistent with the applicable state laws.

Are the three Forms 1099 from the same issuer? Did the recipient perhaps establish a policy/account long ago while living in a different state? What is the client's possible reason for having retirement income (now) that would be taxed by different states??

FWIW - a large number of Forms 1099-R that I encounter have the "taxable amount not determined" box checked...especially the IRA accounts.

FE

Actually, the TP died in 2010 and his surviving spouse now collects his pension and that really cannot be the reason for his spouse started in 2010 to recieve pension from the same issuer and she also has 2 identical and 1 that is different. Originally from MA moved to AZ in 2008. Its possible it may be backed out of the AZ taxable income. I need to check.

[FEDUKE404]

Huh?

Actually, the TP died in 2010 and his surviving spouse now collects his pension and that really cannot be the reason for his spouse started in 2010 to recieve pension from the same issuer and she also has 2 identical and 1 that is different. Originally from MA moved to AZ in 2008. Its possible it may be backed out of the AZ taxable income. I need to check.

If the person is (apparently) now a resident of AZ, what would be your possible justification to "back out" such income as you prepare a federal and AZ ( full-year resident?) tax return??

But if, for whatever reason, the Form 1099-R income is still being reported as "MA" income and, even worse, MA state taxes withheld ---- then you would need to file a non-resident income return for MA with ZERO income from that state and then receive a full refund of all taxes withheld by that state. An explanatory letter of actual residency might be helpful also.

Bottom line: Sounds as if you should prepare a federal return, use the same numbers for the AZ return (with appropriate adjustments per state law), and then retrieve any taxes withheld in error by a state which has no claim to the income. I've had to go this route before for folks who "forgot" to advise the Form 1099-R payor where they now lived.

FE

[Gary2]

Are the three Forms 1099 from the same issuer? Did the recipient perhaps establish a policy/account long ago while living in a different state? What is the client's possible reason for having retirement income (now) that would be taxed by different states??

I could be daydreaming, but I vaguely recall that federal law prohibits states from taxing distributions from qualified plans (which would include most, if not all 1099-Rs, at least for the ones I see) on non-residents. The state where a pension is earned has no claim once the recipient moves out of state. I trust someone will correct me if my memory is wrong on this.

It may be necessary to pro-rate the distributions for part-year residents, but I don't think I've ever seen a case where the company issuing the 1099-R did the math and somehow issued 1099-Rs with info for two states for the same account. They're lucky if they find out about the move in the same year.

FWIW - a large number of Forms 1099-R that I encounter have the "taxable amount not determined" box checked...especially the IRA accounts.

In theory, all taxable distributions from a traditional IRA should have this box checked, because the custodian has no idea whether any of the original contributions were non-deductible. This is also one of those cases where state distributions may vary since some states don't allow any adjustment for contributions into a traditional IRA, and thus don't tax the entire distribution.

[FEDUKE404]

We have a winner!

I could be daydreaming, but I vaguely recall that federal law prohibits states from taxing distributions from qualified plans (which would include most, if not all 1099-Rs, at least for the ones I see) on non-residents. The state where a pension is earned has no claim once the recipient moves out of state. I trust someone will correct me if my memory is wrong on this.

It may be necessary to pro-rate the distributions for part-year residents, but I don't think I've ever seen a case where the company issuing the 1099-R did the math and somehow issued 1099-Rs with info for two states for the same account. They're lucky if they find out about the move in the same year.

In theory, all taxable distributions from a traditional IRA should have this box checked, because the custodian has no idea whether any of the original contributions were non-deductible. This is also one of those cases where state distributions may vary since some states don't allow any adjustment for contributions into a traditional IRA, and thus don't tax the entire distribution.

EXCELLENT points on two fronts -

1) You are not daydreaming. Without playing attorney, which I'm not (thank goodness!), I also recall legislation that prohibits the paying state of a retirement plan to tax such income for a non-resident.

2) Your point on "undetermined" is also factually correct, due to lurking Form 8606 and/or different state taxation of money that went into the IRA. Whether that is somewhat common sense or just CYA by the payer remains unknown. (Let's not forget how colleges now always report "billed" on Form 1098-T....)

FE