Thank you for your answer. You mention in an example of contributing 100K and an agency match of 50K. as I understand you answer, the 100K would not be subject to PA State tax because it was taxed when it was earned. Only the 50K of matching funds would be taxed because that was not state taxed yet. Is that correct ? In my case, I retired from the CSRS system and are exempt from any penalties by the passage of H.R. 2146 for "Public Safety Positions". The entire amount of withdrawal was my contribution dollars only, and PA State tax was taken out on all of that money at the time it was earned. My Agency made NO TSP contributions to my account. So, as I understand by your example, and the PA tax code on this, because the money was all my already taxed at the time it was earned, that the total withdrawal is not subject to PA State tax. Is that correct ?
