State Tax on IRA distribution

Submitted by peter mcloone on Tue, 2017-04-18 15:40

During the years I contributed to my IRA I lived in states A and B which permitted an income tax deduction for the IRA contributions. Now I am about to begin distributions from my IRA but am now living in state C which never had an income tax deduction on contributions and does not tax distributions. Do I owe income tax to states A and B because they gave me an income tax deduction on the contribution?



Submitted by William Tuttle on Tue, 2017-04-18 16:33

  • Many years ago the SCOTUS ruled that states can not come after you in this situation.
  • Unfortunately, the reverse is true for some people. if you lived in a state that did not allow deductions, but moved to a state that does tax distributions, you are out of luck.

Submitted by peter mcloone on Tue, 2017-04-18 18:23

I simplified somewhat in my earlier post. Let’s see if this makes a difference. I am in state C (no tax on distributions) but have an inherited IRA from a person who lived in states A and B and died in B.  As beneficiary do I still win the lottery or does state B have some claim here?

Submitted by William Tuttle on Tue, 2017-04-18 21:45

The situation does not change just because it is an inherited IRA.

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