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Wrong Tax Forms Issued – Massachusetts Retirees

Wrong Tax Forms were issued on January 21, 2016 to over 50,000 Commonwealth of Massachusetts Retirees.

What happens if I file with the wrong tax forms?

About 50,000 Commonwealth of Masachusetts retirees received the wrong tax forms. An uncorrected 1099-R form would mean possible over payment of federal income taxes for retirees. Fortunately some State retirees called the office after they noticed the wrong tax forms, as tax bills were much higher than 2014. Normally, retirees who would receive refunds might have had to owe money.

The misprinted forms, because of a programming error, had bad codes assigned. The correct code should have been 7, for normal distribution of benefits. Instead, Code 1 was printed. Code 1 means a premature distribution of benefits. What would this cost the retiree? A 10 % penalty. In addition, State Retirees who should have been assigned Code 2, for early distribution of benefits with exceptions, received forms erroneously marked as Code 7. You can read more about it here on the Massachusetts government website.

Fortunately, this was caught fairly early. The issue can be resolved with the IRS should retirees file the wrong tax forms. However, it can take two years.

When Can I file my paper tax returns?

The State Treasurer’s office recommends that you wait for the revised 1099-R form to come in the mail if you file with a paper tax return. First, make sure the box at the top of the 1099-R marked “Corrected” is checked off.

2015_1099-R, corrected tax form, wrong tax forms

A corrected 1099-R form will be mailed out in early February. The board is sending postcards to make sure the 50,000 Commonwealth retirees are notified of this error. You should receive a revised 1099-R statement by Tuesday, February 16th, 2016. If not, please call the Massachusetts State Retirement Board (the number is at the end of this blog).

How Do I File Electronically?

State retirees who file electronically, can go ahead and file, just use the correct codes. If you are a retired employee of the Commonwealth of Massachusetts, up to the age of 59-1/2 in 2015, you can enter Distribution Code 2 on the electronic form. Use Distribution Code 7 if you turned older than 59-1/2 in 2015. If you have any questions, you can contact the State Treasurer’s office by email at srb@tre.state.ma.us or by telephone at (800) 392-6014 or (617) 367-7770. By the way, be easy on them. Make sure that you notify the Massachusetts State Retirement Board of any change of address. The change of address form can be found here.

You can access information on how to read your 1099-R form here. Make sure the new one you receive has “Corrected” checked off on the top.

Alex Franch, BS EA  at  781.849.7200. He can answer any questions you may have regarding tax preparation and the filing of your returns. We have ultra-convenient service at any three of our locations where you can conveniently drop off your tax documentation to be prepared, Dedham, Quincy and South Weymouth. Worthtax uses a triple check accuracy system.

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