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What is the definition of a public pensiom. I have a pension…

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What is the definition...

What is the definition of a public pensiom

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I have a pension from a defined benifit plan from a private company.. I want to take out a down payment for a home to retire in we rent now. How is that taxed in Massachusetts. And what is a public pension which is not taxed

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Submitted: 7 months ago.Category: Tax
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11/29/2017
Tax Professional: Tax.appeal.168, Tax Accountant replied 7 months ago
Tax.appeal.168
Tax.appeal.168, Tax Accountant
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Tax Professional: Tax.appeal.168, Tax Accountant replied 7 months ago

Q: what is the definition of a public pensiom

A: Massachusetts public pensions are the state mechanism by which state and many local government employees in Massachusetts receive retirement benefits.

REFERENCE SOURCE:

https://ballotpedia.org/Public_pensions_in_Massachusetts

I am checking on the taxation of the defined pension. I will get back to you shortly. Thank you for your patience.

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Tax Professional: Tax.appeal.168, Tax Accountant replied 7 months ago

Q2: How is that taxed in Massachusetts.

A2: The distributed amount will likely be taxed as ordinary income. Income from most private pensions or annuity plans is taxable in Massachusetts. Certain government pensions, however, are exempt under Massachusetts law. In general, exempt pensions include contributory pensions from the U.S. Government or the Commonwealth of Massachusetts and its political subdivisions, and noncontributory military pensions. Below are some specific pensions which are exempt under Massachusetts law.

*Note: Massachusetts does not tax Social Security income; therefore, you should not report such income here.

* Pension income received from a contributory annuity, pension, endowment or retirement fund of the U.S. Government or the Commonwealth of Massachusetts and its political subdivisions

REFERENCE SOURCE:

https://www.taxslayer.com/support/771/massachusetts-exempt-pensions-and-annuities

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I am checking on obtaining more specific info for you for relating to defined benefit plans.

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Tax Professional: Tax.appeal.168, Tax Accountant replied 7 months ago

The chart found at the following link shows information about various retirement plans and whether the distribution is taxable. The chart does not specifically have a category titled as defined benefit plan, but it does seem to cover retirement plans in general and shows if the distribution is taxable or not. Hopefully this helps.

http://www.mass.gov/dor/individuals/filing-and-payment-information/guide-to-personal-income-tax/massachusetts-income/retirement-plan-contributions-and-distributions.html

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