Annuities, IRA Distributions , Alabama Partially Taxable Pensions, and IRA Distributions, these amounts may be considered nondeductible contributions for the following reasons:
- The Federal Tax Reform Act of 1986 allowed you to make nondeductible contributions to your IRA even if you were unable to deduct all, part, or none of the contributions. Your nondeductible contribution is the difference between your total allowable IRA contributions (up to the maximum amount) and the amount you deducted on your Alabama return that year.
- Qualified contributions made by you to an individual retirement arrangement (IRA), simplifiedemployee pension (SEP), or Keogh plan before January 1, 1982, are considered part of your nondeductible contributions since Alabama did not allow you to defer tax on these contributions.
- Qualified contributions you made to a Federal 401(k)(2) plan or 403(b) plan before January 1,1985 are considered part of your cost since Alabama did not allow you to defer tax on these contributions.
Worksheet for Partially Taxable Pensions, Annuities, and IRA Distributions
Use the worksheet to report distributions from profit-sharing plans, retirement plans,
employee savings plans, and individual retirement arrangements not fully taxable. Also, use this worksheet
to report pension and annuity income not fully taxable. If the income or distribution is fully taxable you do NOT
need to complete this worksheet. In general, you should receive a 1099-R showing the amount of your retirement
plan distribution or income. If the taxable portion shown on your 1099-R is the same for Alabama purposes as
for Federal purposes you do NOT need to complete this worksheet. Instead report the total and the taxable
amount on Form 40, page 2, Part I, lines 4 or 5.
The taxable portion may NOT be the same for Alabama purposes as for Federal purposes because you
may have a different cost basis. In this case, you must complete this worksheet to calculate the amount taxable
for Alabama purposes.