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Bill
Bill, Enrolled Agent
Category: Tax
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Experience:  EA, CEBS - 35 years experience providing financial advice
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I worked all my life in Alabama. I retired at the end of ...

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I worked all my life in Alabama. I retired at the end of 07, took a lump sum settlement from my company retirement plan, which was paid in Jan. of 08. Is 100% of the lump sum subject to Alabama state taxes?
Submitted: 8 years ago.
Category: Tax
Expert:  Bill replied 8 years ago.

Generally, 100% of the distribution is subject to AL taxes. However, if you made any after-tax contributions to the plan while you were employed then these amounts are not taxable. Also, payments from certain programs and defined benefit plans are not taxable. The links below list these plans:

http://www.revenue.alabama.gov/incometax/xempt.html

http://www.revenue.alabama.gov/incometax/DEFINEDBEN.pdf

http://www.revenue.alabama.gov/incometax/income.html

See page 13 - http://www.ador.state.al.us/incometax/2007_forms/07f40bk.pdf

 

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