Mississippi state and retirement

[Bonnie]

Anyone on here in Mississippi? I have a customer there and in 2015 she took 50,000 out of her retirement. She is 65 so of retirement age. Trying to determine if this income is taxable to MS. It was an IRA and a total distribution. Reading in tax book, some retirement is taxable in MS and some not. From what I read, it seems to me this is non taxable to MS, Says it's the early distributions that are but this is too much income to miss it so want some input from someone who knows MS better than I. Thanks for any help

[Snaggletooth]

Where is the Client

Bonnie, where does your client live? In Mississippi, or somewhere else. This will be a huge factor in answering the question.

[mastertaxguy]

"retirement income"--mississippi income tax

Reviewing the current instructions for the Mississippi individual income tax return, page 11, item line 44, indicates that NORMAL retirement plan distributions are not subject to tax. The instructions specifically mention IRS form 5329 (penalty computation for certain early retirement plan distributions) relating to taxable retirement plans. Absent something not present in your scenario, it appears your taxpayer does NOT have a taxable retirement plan distribution for 2015. I did not see anything in their instructions or regulations indicating a dollar limit.

[Bonnie]

[QUOTE=Snaggletooth;180301]Bonnie, where does your client live? In Mississippi, or somewhere else. This will be a huge factor in answering the question.

Assume you mean why does my client live in Mississippi and I am in Kentucky doing their tax return? Just because. I have client's all over the country for various reasons who I do returns for. She has always lived in MS. When I first met the couple, the husband (who is originally from Radcliff where I am located) owned a trucking business and the LLC for it was in Kentucky so they wanted someone here to do the tax returns. At that time he still had family here and they came back often to visit his parents so came here and I did the tax return. Over the years they dissolved the trucking business and he went to work for someone else. They continue to have me do the tax return and we work by mail now. Think they originally met when he was driving truck through MS. And just a side note, he was a very good friend of my daughter back in high school. But to answer original question why she lives in Mississippi, she always has.

[Snaggletooth]

Just Asking the Question

Just asking the question, that's all. Nothing else intended. I have some out-of-state returns as well.

Residency in some other state other than MS could have meant total exemption.

[Bonnie]

Kentucky exempts 41,110 of retirement income. Odd amount in my opinion but they didn't ask me. As I read MS regulations, her entire withdrawal is tax exempt