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posted Apr 8, 2025 8:50:42 AM

How do I answer the question "What kind of retirement income do you have from Pennsylvania?" Box 7 has code 2

Hello how do I answer this question "What kind of retirement income do you have from Pennsylvania?" I converted $ from my rollover IRA to a Roth IRA. on the 1099-R, the distribution code in box 7  is 2 . There is a dropdown menu and not sure which answer to select.

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1 Replies
Expert Alumni
Apr 8, 2025 9:02:12 AM

It depends. The amounts you put into your traditional IRA were already taxed on Pennsylvania (PA). This state does not allow any deduction from your income. However, if you have any earnings in the amount you rollover then that portion would be taxable.

Selection should be one of the following depending on your situation.

  • I'm eligible, Plans eligible (No PA tax) - If you have no earnings in your traditional IRA
  • I'm not eligible yet, plan's eligible in PA - On the Retirement Income Summary you can edit your 1099-R to enter your cost basis.