Common questions about Massachusetts IRAs and pensions in Lacerte

Lacerte uses the worksheet for line 2 of the MA Schedule X to figure the taxable IRA distribution amount.

To adjust the taxable amount:

1. Go to Screen 24, Adjustments to Income.
2. Under the Sections panel, select MA IRA/Keogh.
3. Enter Traditional IRA/Keogh contributions previously taxed.
4. Enter Roth IRA conversion contributions previously taxed or deferred.

For more information, see the MA Nonresident or Part-Year Resident Income Tax instructions.

The self-employed health insurance deduction is reporting the full federal amount, but the amount applicable to MA is less than the federal. How do you adjust it?

Per the Schedule 1-NR/PY instructions for the "Nonresident Deduction and Exemption Ratio": 

"Since nonresidents are only taxed on income from Massachusetts sources, the deductions and exemptions allowed to them are limited by the amount of this income. This happens in two ways. The deductions in line 15 and Schedule Y, lines 2, 4, 5, 7, 9 (certain amounts only; see instructions for Schedule Y, line 9), 13 and 17 must be matched to specific items of income taxed on Form 1-NR/PY."

So, the SE Health Insurance Deduction isn't prorated.  The SE health insurance premiums paid must be allocated between MA and the other states on the return when they're entered.  Do the following to match the SE health insurance deduction to the MA source income: 

1. Go to Screen 24, Adjustments to Income.
2. Under the Sections panel, select SE Health Insurance.
3. Select the appropriate SE Health Insurance input field.
   • For example, Premiums not entered elsewhere (excluding long-term care)
4. Press the CTRL+E button on the input field.
5. On the first line, enter the amount of SE Health Insurance premiums paid while a MA resident, or premiums that are associated with MA source income in the Amount column. 
6. Enter MA in the State column.  Leave the Source column blank. 

The program is missing information:

1. Go to Screen 24, Adjustments to Income.
2. Under the Sections panel, select MA IRA/Keogh.
3. Enter the correct amount to be excluded on the line Roth IRA conversion contributions previously taxed or deferred.