I had an early withdraw on my 401K and on the PA state tax, what does the Basis of Retirement Income mean? I withdrew the money to not have my home foreclosed

[DianeW777]

It depends. In Pennsylvania (PA) you are not allowed to reduce your wages for money you contribute to a 401(k). This means that you paid tax on all of your contributions when you put them into the account. 

For PA purposes, you can reduce the taxable amount of any distribution, by any of your contributions (basis of your retirement account/income). You must pay tax on any earnings, if part of your distribution is from the interest earned on your account.