While completing the PA state interview, you were asked what type of income was represented by each 1099R. The answer to this question determines if that in, come is taxable by PA. If your 1099R , box 7, is coded "7", it is not taxable, select "I qualify, plan qualify" to make that income not taxable.
More info: https://ttlc.intuit.com/questions/3038642-how-is-1099r-income-to-be-reported-on-pa-state-returns
