Yes. Your lump sum payment would not have been taxable had you waited until normal retirement age.
Your retirement is NOT taxable for PA income tax if you retired AFTER meeting the eligibility requirements for separation from service by retirement based on old age, infirmity, long-continued service, or a combination of old age and infirmity and long continued years of service.
The code in Box 7 of your 1099-R will help decide whether your retirement is taxable to PA.
Refer to How do I know if the amount on my 1099R (1099-R) is taxable on my PA Personal Income Tax Return?
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