Yes, contributions after 2006 is the dividing line. If all contributions were after 2006, then all claimed deductions become taxable. It is a bit messy with years and claiming all to be figured out.
Take a look at your PA sch A.
PA DOR states: Distributions from an IRC Section 529 College Career and Savings Program Account not used for qualified educational expenses are taxable and reportable as interest income on PA Schedule A and Line 2 of form PA-40. The cost recovery method must be used to determine the taxable amount for contributions made in tax years 2005 and earlier. The total amount of distributions that were claimed as deductions for tax years 2006 and later is taxable.
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