My husband became permanently disabled in 2019. We live in PA. Is the withdrawal considered taxable income if taken out for a disability?

[MarilynG1]

If you made a withdrawal from a pre-tax Retirement Account (like a 401K), the distribution is always taxable (because it was not taxed previously). 

If the withdrawal was made from an after-tax account (like a Roth IRA), it would not be taxable.  The 1099-R you receive will have a Code in Box 7 to indicate the type of withdrawal.

However, there are exceptions to the 10% Early Withdrawal Penalty.  Click this link for more info on Exceptions to Early Withdrawal Penalty (disability is an exception).

TurboTax will ask you follow-up questions after you enter your 1099-R.

[anderchris34]

Thank you.  My question is really in regards to our PA state tax return.  Does PA consider it taxable income if he’s disabled? I’m finding conflicting info on the internet.

[MarilynG1 · Accepted solution]

Click this link for detailed info from the PA Dept. of Revenue on Taxable 1099-R Distributions.

[anderchris34]

Thank you!

[MarilynG1]

My pleasure!