Does income from nonqualified annuity get taxed bu pennsylvania?

Forum|Forum|7 years ago
June 6, 2019
3 replies
15 views

all information from 1099r was entered but does not show as taxable on the PA return

TurboTax Premier Windows

Best answer by BillM223

You are correct that a nonqualified annuity is normally taxed in Pennsylvania. See https://revenue-pa.custhelp.com/app/answers/detail/a_id/368/~/are-distributions-from-an-annuity-taxable%3F-if-so%2C-how-do-i-report-the-income%3F

If it is showing as non-taxable, it may be for one of two reasons:

1. In the Pennsylvania interview, you checked one of the type of plans that is non-taxable on one of the screens with the heading "What kind of retirement income do you have from Pennsylvania?" Checking most (or all) of these entries will make the annuity non-taxable in PA.

2. You did not notice that in Pennsylvania, such distributions are reported as "interest" income. The note at the bottom of this screen ("What kind of retirement income do you have from Pennsylvania?) points out that TurboTax will transfer it automatically to PA Schedule A (which is not like Schedule A on the federal return; rather it is for Pennsylvania interest income).

R

re2boys

Level 9

What is the code in box 7 of the 1099R? If it contains the letter D, then it is taxable in PA the same extent as federal and it will appear as interest income on Schedule A.

B

BillM223Answer

Level 15

You are correct that a nonqualified annuity is normally taxed in Pennsylvania. See https://revenue-pa.custhelp.com/app/answers/detail/a_id/368/~/are-distributions-from-an-annuity-taxable%3F-if-so%2C-how-do-i-report-the-income%3F

If it is showing as non-taxable, it may be for one of two reasons:

1. In the Pennsylvania interview, you checked one of the type of plans that is non-taxable on one of the screens with the heading "What kind of retirement income do you have from Pennsylvania?" Checking most (or all) of these entries will make the annuity non-taxable in PA.

2. You did not notice that in Pennsylvania, such distributions are reported as "interest" income. The note at the bottom of this screen ("What kind of retirement income do you have from Pennsylvania?) points out that TurboTax will transfer it automatically to PA Schedule A (which is not like Schedule A on the federal return; rather it is for Pennsylvania interest income).

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S

Stephen1023

Level 2

I thought that annuity income in PA was taxable to the extent that it exceeded the basis being paid. When I indicate that the basis is the same as the annuity payment is has no effect on the calculation in Turbo Tax. Example Payment of 100, basis of 100 should be 0 in interest income. Turbo Tax says income is still 100. Why?

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gawman57

Level 2

At “State Type Code” under the “What kind of retirement income do you have from Pennsylvania?” question, there are 18 selections, none of which appeared to match my lump-sum distribution from a non-qualified annuity with Transamerica Life Insurance Company. One at a time, I selected each of the 18 and hit “Continue”. Only 4 of the 18 gave me the result I needed, i.e., PA tax only on the gain from my contribution (my basis that was previously taxed). The selection that most closely seemed to match my situation was “Life insurance or endowment”; thus, I chose it, and proceeded without complication to a successfully-filed return. TurboTax should fix this part of their app to make it less confusing. The rest of the app was excellent.