In general, Massachusetts follows the provisions of the Code as of January 1, 2005, with certain exceptions.
Massachusetts generally adopts the federal rollover rules in IRC ยง 408A with certain adjustments. The regulations provide:
In the case of a distribution within the meaning of subsection (d)(3) of section 408A of the Code as amended and in effect for the taxable year, any amount included as income for federal tax purposes under said section 408A by reason of such distribution shall be included in gross income and, to the extent such distribution is included in adjusted gross income under subsection (c), shall be taken into account in determining taxable income under this chapter in the same manner as under subparagraph (A) of said subsection (d)(3) of said section 408A of said Code.
For Roth IRA conversions in 2010, unless a taxpayer elects for federal purposes to include the applicable conversion amount in gross income in 2010, the taxpayer must include the applicable Massachusetts gross income from the conversion ratably in 2011 and 2012. Thus, unless the federal election applies, none of the amount includible in Massachusetts gross income as a result of a conversion occurring in 2010 is included in Massachusetts gross income in 2010, and half of the income resulting from the conversion may be included in Massachusetts gross income in 2011 and half in 2012.
Tax Attorney Richard M. Stone is admitted to the Bar in Massachusetts, Ohio, Pennsylvania, DC, and the U.S. Tax Court. He received his J.D. from the University of Pennsylvania Law School, and his B.S. in Mathematics from Lafayette College.
