How is 1099R Income to be reported on PA State Returns?

[re2boys]

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.

[jmelvin2783]

If box 7 says 7 then which option would I use in the drop box. I'm confused.

[jlkauffman67]

Thanks, I figured out my problem.  I was looking at the Federal Taxes Tab for the drop down screen, because that is where I entered the Amount from the 1099R.  However, when I walked through the State Taxes screens, that is where I found the drop down screen to indicate what the distribution was from.  

[Steven63]

I read the response to the question from the person in PA.... "if box 7 of your 1099R is coded 7 or 4, it is not taxable or PA income tax purposes."  Is this true of all states?  I'm in Ohio and box 7 on my 1099R has a "7" and there are no listed deductions showing for the state on the form (boxes 12-14).

[KathyS1]

What if box 7 is 4 and 4D and both 1099R's withheld PA state tax? Are they taxable to PA? 

[MaryK4]

Yes, this is a non qualified retirement payment paid to beneficiary so it is taxable in Pennsylvania.  

Code 4 Death distribution. This is a distribution due to death and/or disability. A distribution due to death is not taxable for PA purposes - unless included with Code D.  See How do I know if the amount on my 1099R (1099-R) is taxable on my PA Personal Income Tax Return?

@KathyS1

[jyleads]

If box 7 is coded with a 4 and taxes were withheld where on the PA 41 form do I have to report this so I get the taxes refunded

[SamS1]

1099Rs with code 3 or 4 are not taxable in PA unless with code D.  You would need to enter the 1099R in TurboTax as received.  The PA state return will exclude the taxable portion of the distribution due to death and you will receive a refund or credit for the amount of PA tax withheld on the 1099R.  You can review your PA return TurboTax with the following steps:

1. While in your TurboTax account, select Tax Tools in the left margin
2. Select Tools
3. Select View a Tax Summary
4. In the left margin, select PA tax Summary
5. When finished, Select "Back"

[ldtax]

My 1099R has code 7D so I understand it is taxable on PA personal income tax return.  What should I select in the State Type Code dropdown?

[DMarkM1]

Select the "Annuity or non civil service disability" category.  This will transfer the taxable portion (normally box 2 on your 1099r) to PA schedule A as interest income which then shows up on the PA form 40, line 2.  

[DN707tax]

Hi my plan allows early withdraws if you terminate at age 55 or older my 1099r is coded with a 2 in box 7. What option do I choose when doing pa state taxes to get the tax exemption? When I select the early distribution option it makes me enter cost basis. Do I need cost basis if the plan allows early withdrawals at age 55 after retirement? Thanks 

[BrittanyS]

If you meet the age requirement set by your plan to withdraw, you will choose I'm eligible; plan eligible (no PA tax).  This option will take away the question regarding the cost basis.  If you did not meet the age requirement set in your plan, you will choose early distribution from a ret. plan.  At this point, you will need to enter the cost basis for your plan.  Pennsylvania tax laws exempt most retirement and pension income from state tax because the contributions are not excluded from your taxable income in the year you make them.  Therefore, the basis needs to be included.  If you took your distributions after you met the age conditions of your plan you are also exempt from being taxed on the withdrawal that exceeded the cost basis. 

For more information on how Pennsylvania taxes retirement plans, see the link below:

Is my 1099-R taxable?

@DN707tax 

[DN707tax]

Thanks so much !

[Nae47]

If there is a 4D, what would I select in the state drop down?  Also, how is the inheritance tax figured on the PA state tax return?