Is retirement income taxable in pa? this includes required minimum distributions from tiaa-cref.

[BMcCalpin · Accepted solution]

On the Pennsylvania return, you need to manually indicate which retirement distributions are not taxable (because some are taxable).

In the Pennsylvania state interview, you will come to a screen entitled "What kind of retirement income do you have from Pennsylvania?" Actually, you'll get one of these for each 1099-R you enter on the federal.

The second line identifies which 1099-R this screen is referring to. In my test, it says "Pennsylvania needs us to get really specific about the kind of retirement income you're receiving from [name]." (where [name] is the name you gave your 1099-R on the federal return).).

This screen wants to know what type of pension this is since some pensions are taxable in Pennsylvania.

At the box entitled "State Type Code", pull down the menu.

Choose "I'm eligible; plan's eligible (no PA tax)"

You are eligible if you were eligible to retire under your plan's rules (as opposed to early).

The plan is eligible if it meets Pennsylvania rules. See this article from the Pennsylvania Institute of Certified Public Accountants about eligible plans in Pennsylvania.

If you are not sure about your plan, contact the plan administrator and ask if their plan is a Pennsylvania qualified retirement plan (refer them to the link above if necessary).

[jmdubler]

Is Liberty Mutual Insurance Taxable on PA State Income Tax? Distribution code is 7

[dkingsbo]

What you say looks easy, but how can I input it online? On the 1099-R,  Box 7 , 7, has a normal distribution.  In my instance, this is a retirement distribution, it is not supposed to be taxed in Pennsylvania. Any workarounds? Thanks!

[JotikaT2]

You will make your state specific adjustment in the state interview section of the program this year.

1. Select State in the black panel on the left hand side of your screen when logged into TurboTax.
2. This will take you to a screen titled Let's get your state taxes done right.  Click continue on this screen.
3. You will see the following screen titled Status of your state returns.  Select Edit to the right of Pennsylvania to review your entries.

Continue through the screens until you see What kind of retirement income do you have from Pennsylvania?  There will be a drop down menu to the right of State Type Code.  Select the arrow to select the appropriate distribution as it applies to your situation.

If you met all of the requirements of age and length of service, then retirement is excluded from income in Pennsylvania. 

PA retirement exclusion from tax