[10646]
January 14, 1999
TO: PENSION MEMBERS No. 5-99
PENSION OPERATIONS ADVISORY COMMITTEE No. 4-99
TRANSFER AGENT ADVISORY COMMITTEE No. 7-99
RE: MASSACHUSETTS' DEPARTMENT OF REVENUE RELEASES ROTH IRA
GUIDANCE
______________________________________________________________________________
The Massachusetts Department of Revenue has recently released Technical Information Release
(“TIR”) 98-8, Income Tax, Massachusetts 1998 Reducing Income Taxes Act (“the Act”), which provides
guidance on Massachusetts personal income tax treatment of Roth IRAs and Education IRAs.
Specifically, TIR 98-8 states that Massachusetts adopts the federal tax treatment of Roth and Education
IRAs under the current Internal Revenue Code and automatically adopts any future changes to the
federal Roth and Education IRA provisions. In addition, TIR 98-8 states that Massachusetts also adopts
the federal gross income exclusion for voluntary employee contributions to a section 403(b) annuity
retirement program of an employer. Previously, only contributions to a section 403(b) retirement plan
that were mandated by the plan were excluded from Massachusetts gross income. TIR 98-8 also
addresses conformity of other Massachusetts personal income tax provisions to the Internal Revenue
Code.
The Massachusetts Department of Revenue also released TIR 98-15, Personal Income Tax, The
Effect of the Adoption of the Updated Internal Revenue Code on the Massachusetts Personal Income
Tax (“Code Update”). The purpose of the technical release is to explain the major changes to the
Massachusetts personal income tax provisions as a result of the 1998 legislation that conforms the
Massachusetts personal income tax law to the Internal Revenue Code as amended and in effect on
January 1, 1998. Previously, the Massachusetts personal income tax law conformed to the Internal
Revenue Code as amended as of January 1, 1988. TIR 98-15 lists exclusions from federal gross income
which will now be excluded from Massachusetts gross income including SIMPLE plan contributions and
certain distributions from Medical Savings Accounts.
Copies of TIR 98-8 and TIR 98-15 are attached.
Kathryn A. Ricard
Assistant Counsel
Attachment
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