Shot in the dark if anyone can help. This is regarding the Maryland Pension Exclusion (line 10 on the MD 502 under Subtractions from Income). Does anyone know if a distribution from a 401k (part of a pension) can be used or not? The instructions for the 502R include it (chart at the bottom of http://forms.marylandtaxes.com/16_forms/502R.pdf)
I called the state's help line twice, and got different answers both times. One lady said the 401k can be used, the other said it could not.
You were 65 or older or totally disabled, or your spouse was totally disabled, on the last day of the tax year; and
You included on your federal return income received as a pension, annuity or endowment from an "employee retirement system." A traditional IRA, a Roth IRA, a simplified employee plan (SEP), a Keogh Plan or an ineligible deferred compensation plan does not qualify.
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posted: Feb. 15, 2017 @ 7:10a
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posted: Feb. 15, 2017 @ 8:07a
One significant feature of the current pension exclusion is that it is limited to income received from an “employee retirement system.” Eligible employee retirement systems are retirement plans established and maintained by an employer for the benefit of its employees and qualified under sections 401(a), 403, or 457(b) of the IRC. These include defined benefit and defined contribution pension plans, 401(k) plans, 403(b) plans, and 457(b) plans. However, individual retirement arrangements (IRAs), Keogh plans, and simplified employee pension plans are not considered employee retirement systems.
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