Generally, if box 7 of your 1099R is coded 7 or 4,...
Level 9

Retirement tax questions

Generally, if box 7 of your 1099R is coded 7 or 4, it is not taxable for PA income tax purposes.  If it coded 1 or 2, it may be taxable to the extent that the distributions exceed your basis in your retirement plan. If coded 1D or 7D, it is a commercial annuity and is taxable same as federal.

Your basis in a retirement plan is the money that you contributed to the plan less any distributions taken in previous years.  The basis does NOT include earnings inside the plan or your employer contributions.

If you rolled over the distribution into another retirement plan or converted it into a Roth IRA, it is also not taxable.

You must tell the program what kind of retirement distribution you received or the program will consider it taxable.


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