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11028: MI - 4884 Pension Schedule


Michigan

How do I get Pension entries to flow to the MI 4884 - Michigan Pension Schedule?

All data for the MI 4884 comes from the Federal 1099 screen.

  • Whether a distribution flows to the 4884 depends on
    • The age of the taxpayer, spouse, or deceased spouse
    • The 1099 distribution code
    • The pension type entered on the screen.
  • Regardless, distribution does not flow to the 4884 unless the taxpayer, spouse or deceased spouse, at least one of them, was born before January 1, 1953.

The MI 4884 Pension Schedule uses a MI Department of Treasury chart, which describes the Federal 1099R distribution codes and their eligibility for Michigan tax exemption. The chart below is based on that.

Form 1099-R Distribution Codes Is the condition eligible for Michigan tax exemption?
(Limited based on age and year of birth)
1 - Early distribution, no known exception. No.
2 - Early distribution, exception applies. No, unless: Part of a series of mainly equal periodic payments made for the life of the employee or the joint lives of the employee and their beneficiary;
Early retirement under the terms of the plan.
3 - Disability. Yes.
4 - Death. Yes, for surviving spouse only and only if the decedent would have also qualified for a normal distribution under Distribution Code 7 at the time of death.
No, for all other beneficiaries.
No, if paid as a death benefit payment made by an employer but not made as part of a pension, profit sharing, or retirement plan.
5 - Prohibited transaction. No.
6 - Section 1035 exchange. The exchange of life insurance No.
7 - Normal distribution.
  • normal distribution from a plan,
  • distribution from a traditional IRA, if the participant is at least 59½,
  • Roth conversion if the participant is at least age 59½,
  • distribution from a life insurance, annuity, or endowment contract must be 65 and part of a series of mainly equal periodic payments made for the life of the employee or the joint lives of the employee and their beneficiary.

Yes.

Exception: You may not subtract distributions from a plan that:

  • allows the employee to set the amount of compensation to be deferred
  • does not prescribe the retirement age or years of service
8 - Excess contribution plus earnings/excess deferrals (and/or earnings) taxable in 2014. No.
9 - Cost of current life insurance protection. No.

Source: 2017 Pension Information

Note on distribution codes. Distributions using the following codes (the Dist code field on federal screen 1099) must meet these conditions in order to flow to MI 4884:

Code 2. When the distribution code is 2, the Pension Type (top of the 1099 screen) must be 2 - Distributions was series of equal periodic payments.

Code 4. When the distribution code is 4The Pension Type must be one of these:

  • 4 – Distributions due to death made to surviving spouse (unless the box Income received because of a deceased spouse is checked on the Special Tax Treatment tab on the 1099 screen)
  • G – US Government
  • S – State Government
  • Z – City Government
  • C – Civil Service Administration (CSA) Plan
  1. The box Income received because of a deceased spouse must be checked on the Special Tax Treatment tab on the 1099 screen (unless the Pension Type is 4 – Distributions due to death made to surviving spouse).
  2. The deceased spouse’s name, SSN, and date of birth must be entered on MI screen 1. If a date of birth after December 31, 1952 is keyed, the program will ignore any deceased spouse information.

Code 7. When a distribution code 7 refers to income received because of a deceased spouse, that option must be checked on the Special Tax Treatments tab of federal screen 1099 (1099 > Special Tax Treatments tab > Income received because of a deceased spouse).


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