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.
