Reply To: 403(b) => Roth IRA after age 59-1/2

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#71285
Alan S.
Participant

As you can see on p 11, the 100% subtraction applies to govt employees from federal down to local. There are no age or form of distribution limits. The rep was not aware of the 20,000 limited subtraction because their participants would never use that limit because they already qualify for the full subtraction. In other words, the 20,000 limit and the restrictions that come with it are for everyone else who is not govt employee. If I recall correctly your NYS tax return has a different code to be entered for each type of subtraction, so be sure to use the correct one.

P 12 of Pub 36 lists the major govt employers whose plans qualify for the full subtraction. If you also qualify for a defined benefit pension (to which you did not contribute), that income also qualifies for subtraction. However, if you have a 457b deferred comp plan, those benefits do not qualify for a full subtraction, but you could use the 20,000 exclusion just for that income. And your beneficiaries will qualify for the same exclusions that you would have when they inherit these plans.

More NYS guidance here: https://www.tax.ny.gov/pdf/volunteer/ty2018/co-60.pdf