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Thank you! Yes, but it meets the state of Mississippi exception and is not taxable to the State of Mississippi. Federal is calculating correctly.
"Yes, but it meets the state of Mississippi exception"
So, the comment regarding distribution code 2 isn't the issue at all.
So your question is, does anyone know how to exclude retirement income on a MS return?
Im not familiar with MS returns at all, Id venture to guess they have some place in the MS program to designate a retirement distribution as excluded (similar to other states).
For what reason is it excluded from MS?
Thank you so much for responding - I appreciate it. I searched for codes before posting and there are none for my state. I may just continue with overrides. 🙂
Thanks for responding. Proseries is handling the taxability of distributions to MS with codes 1 (taxable to MS), 4 (non taxable to MS) and 7 (non taxable to MS) correctly. Only those with a 2 are incorrect - that is why that information was provided.
"that is why that information was provided."
But what happened to all the Details you previously included? You seem to have deleted info that would be needed to be able to be helpful to you.
I am great at researching stuff, but now I don't know what you stated, such as "met some requirement?"
Code 2 is the same as Code 1, just no penalty applies.
Okay, I'm going to do my best to remember the details. It had something to do with where the service was performed related to that account...
Code 1 is Early, and Penalized
Code 4 is Dead Person = not your retirement, but paid because of the dead person
Code 7 is Normal, so your retirement and this is what the details referred to, for sourced to MS is nontaxable
Code 2 is Early, but the withdrawal met an exception for the penalty.
This is from MS law:
Amounts received as retirement allowances, pensions, annuities or optional retirement allowances from any Federal, State, and Private retirement system or plan are exempt from State Income Tax.
and then:
Early distributions from retirement plans do not qualify for this exemption. Although these amounts are subject to state income tax, there is no early withdrawal penalty for state purposes.
Thank you!
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