When you enter your W-2 in the Federal tax section, enter it as shown, with Code D and the amount in Box 12.
Since Pennsylvania does not allow a deduction for 401K contributions, when you reach the screen in your state return displaying Compensation, if the amount is correct (matches your PA income on your W-2) you don't need to make any changes. If it shows the lesser Federal amount, you can report your contribution amount as Additional Income.
Check this link from Commonwealth of Pennsylvania, under Income Items Always Taxable in PA.
@Jacki0308
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