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    rgr327's Avatar
    rgr327 Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Apr 8, 2011, 08:32 AM
    Are Early Pension Distributions taxable to Michigan?
    My niece lost her job in Michigan and cashed out her 401 K in several distributions throughout the year. The distribution code on the 1099-R is "1". I am using Turbotax to complete her return and the Michigan return is asking for the source of this retirement plan. The choices are:
    Identify the source of the distribution by entering:

    G - if the pension is from a government or public source (including military and railroad retirement)

    P - if it is from a private source or an IRA

    C - if it is a 2009 Roth conversion

    N - if it is an other pension subject to Michigan tax

    Which code would I use in this instance?
    In addition, does it make financial sense to convert at least a portion of my 401k to an IRA and would the tax treatment differ in any way?

    Thanks for your help.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Apr 15, 2011, 01:15 PM
    The distribution IS taxable income on her Michigan return.

    Enter "P".
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