Yes, retirements aren't taxed in PA if you have Code 7 distribution and meet the requirements.
"Code 7 Normal Distribution: This distribution from an eligible Pennsylvania retirement plan is not taxable if you met the plan requirements (the age and/or years of service required by the plan) for retirement, and retired after meeting those requirements." (PA DOR)
You might need to check your selection on the “What kind of retirement income do you have from Pennsylvania?” screen during the state interview.
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