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MS Proseries Users - 1099R with code of 2

ellen1
Level 1
 
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10 Replies 10
Just-Lisa-Now-
Level 15
Level 15
Code 2 means exception to early withdrawal penalty...taxability would be the same as any retirement.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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ellen1
Level 1

Thank you!  Yes, but it meets the state of Mississippi exception and is not taxable to the State of Mississippi.  Federal is calculating correctly.

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qbteachmt
Level 15

"Yes, but it meets the state of Mississippi exception"

So, the comment regarding distribution code  2 isn't the issue at all.

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ellen1
Level 1

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.  

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qbteachmt
Level 15

"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?"

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qbteachmt
Level 15

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.

 

 

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"Level Up" is a gaming function, not a real life function.
ellen1
Level 1

Thank you!

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Just-Lisa-Now-
Level 15
Level 15

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?


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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ellen1
Level 1

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.  🙂 

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Just-Lisa-Now-
Level 15
Level 15

Code 2 is the same as Code 1, just no penalty applies.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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