Also, I did further question regarding the deductibility of the Employee and Employer contributions for MA tax return.  And I believe what I found out is that since 2008, MA does not allow this deduction on Schedule X/Y.  Therefore, when the 401K distributes during retirement, the cost basis will come into play since the orginal contributions were not pre-tax deductions on the MA return.

I have "CHEERED all of you for replying to my question!

THANK YOU SO MUCH FOR ALL OF YOUR HELP!

SW