Thanks, MarilynG1, but the Pennsylvania interview did NOT give me any questions that allowed me to indicate that the distribution was taxable for federal but not taxable for PA. The only way I was finally able to fix this was to go to the PA forms, drill down to the section where the 1099-R distribution was entered, and correct the PA basis to match the distribution amount. Turbotax enters the PA basis correctly when I enter a code 2 for box seven on the 1099-R, but it leaves the PA basis blank when I enter a code 7. I stand by my contention that this is a mistake, and that Turbotax should be treating code 2 and code 7 the same for PA tax purposes.
