What is "basis" of retirement income on PA income tax return

[MiriamF]

The basis of retirement income is reported in Box 9b of Form 1099-R.

If nothing is reported in Box 9b, check to see if the amount is the same in Box 1 and Box 2a. If so, then you have no basis (after-tax contributions), and your basis is zero.

If Box 2a is blank and Box 2b is checked, then you are going to rely on your memory and your records.

For a traditional IRA, you would have a basis if you made after-tax contributions. Those would be reported on form 8606. If you don't recall making any after-tax contributions, or if your IRA consists entirely of rollovers from 401k or 403b accounts, then your basis is zero.

If this was an annuity you purchased on your own, your basis is the amount you paid for it.

For all other circumstances, you will have to check your records to see if you made after-tax contributions to the plan.

[kkarney]

This is the simple answer I was looking for... Ironically it did not come up in my searches of TurboTax help... Thanks!

[re2boys]

For PA income tax purposes, the above is totally irrelevant it only applies to federal.

[kkarney]

Thanks re2boys for the quick response! So, if I didn't make any contributions in 2017, is it safe to assume my basis is $0 ?

[re2boys]

Are you referring to basis for PA income tax?  If so, you include all contributions EVER made to the retirement account less any distributions EVER received in the past.

[kkarney]

Sorry -- just saw your other answer to this question... This is an IRA with one initial contribution and nothing since. So I take that original contribution amount and subtract any distributions I took prior to 2017, and that's my basis?

[kkarney]

OK -- so I take that original contribution amount and subtract any distributions I took INCLUDING 2017...

[re2boys]

Basis for 2017 is the sum of all contributions less the sum of all distributions taken before 2017, does not include the 2017 distribution.  Essentially, your establishing your "cost" in the IRA as of December 31, 2016 prior to any 2017 distributions.

[re2boys]

The above answer  applies to federal retirement taxation, but does not apply to reporting PA retirement income.  If your 1099R box 7 contains a 1 or a 2, it is an early distribution from a retirement plan and is taxable in PA to the extent the distribution exceeds your basis in the retirement plan.

Your basis, for PA income tax purposes, is the sum of all your contributions into the plan (may cover many years) less the sum of all your distributions from previous years.  Essentially, you are to get your already taxed money back first before distributions become taxable.  You do not include earnings or any employer contributions as part of your basis.

[Thedarkangel1975]

What Do I put in the box for Pennsylvania? In box 1 we have $5,325.36. In Box 2a we have $5,325.36. In Box 7 we have the letter S. There is no 9B box.  Do I put zero for Basis of Retirement Income or %5,325.36

[MaryK4]

The Box 7 S is for Early Distribution of a SIMPLE IRA.  You should have a zero basis, but you may want to contact the administrator of the plan if you are not sure. 

@Thedarkangel1975

[pammy1969]

What is my basis of retirement income  if box 1 and 2a are different? Box 1 is 1,307.27 and  box 2a is 564.56.  However there is nothing in box 9b.

[LindaB1993]

Your basis in your retirement plan, for PA income tax purposes, is the sum of all your contributions less the sum of any distributions taken in previous years.

You do not count any employee matching or any earnings in the basis.

Essentially, in the case of an early distribution (box 7 coded 1), you get your contributions back first, then any employer matching and earnings are taxable.

You may have to ask your plan administrator for the above figures, though some plans list your contribution total on the periodic statements you may have received.

[vhbelliott]

WHY COULDN'T YOU WRITE THAT IN THE INSTRUCTIONS ON THE PA TAXES.  The 1st 2 sentences answered the question that I have been looking for for HOURS!!!!!