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Level 1
posted Mar 15, 2020 1:09:49 PM

Mega Backdoor Roth Pennsylvania Basis Question

During 2019, I contributed $10,000 to an after-tax 401K. The amount grew to $11,000 and I did an in-service withdrawal to roll it over into my Roth 401K. Therefore I owe taxes on the $1,000 difference. It looks like my federal taxes take that into account with my Form 1040 showing the appropriate $1,000 for taxable income. However for my Pennsylvania taxes, it lists the gross distribution of $11,000, a cost basis of $0.00, and PA Income of $0.00. I would think I would owe taxes on $1,000 on PA income just as I did for federal. Am I missing something or is it being accounted for in another location? Thank you!

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1 Replies
Expert Alumni
Mar 16, 2020 1:03:46 PM

No, this is correct since Pennsylvania does not consider rollovers as taxable income.  Please see How do I know if the amount on my 1099R (1099-R) is taxable on my PA Personal Income Tax Return? for additional information.