Do I need to amend prior year tax returns if I mistakenly reported pension income as wages?
There is no difference in taxable income but see below for state income tax considerations. As such, I would not amend prior year returns. Just follow the rules in the future and report the income as a pension. Should you receive a letter or deficiency notice from the IRS or any state tax authority for any tax year, respond in writing on a timely basis and just explain what happened. If you live in a state that has a personal income tax and provides some form of pension income exclusion or some other form of tax benefit on pension income that you failed to take because of your mistake, you should amend your state tax returns to get the tax benefit. Contact your state for the rules about how many years you can amend.
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- Do I need to amend prior year tax returns if I mistakenly reported pension income as wages?
