IRA (and 401(k)) State tax liability
I have a client moving from PA to New Mexico. PA taxes 401k contributions and there is no deduction for IRA contributions. However, in retirement, PA does not tax retirement account distributions.
My client is retiring and moving to New Mexico, which taxes distributions from IRA’s and 401(k)’s. Can they avoid this double taxation of their retirement funds?
Permalink Submitted by Alan - IRA critic on Mon, 2019-08-26 16:57
I am not aware of any states that provide a means of avoiding double taxes on distributions of amounts that were taxed when contributed in certain states like PA. That will result in double taxation at the state level less any amount that NM might exempt for everyone.