Retirement income is not taxable in PA. Why is Turbo Tax Deluxe calculating tax on Retirement income on my PA tax return?

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Retirement in PA:

During the PA interview, you will be asked what type of retirement plan distribution is represented by each 1099R. The default setting is taxable.

If box 7 on the 1099R is coded 4 or 7, it is not taxable. Select "I qualify, plan qualify" or similar choice. If it coded with an "D" such as 1D or 4D or 7D, it is from a commercial annuity and is taxable same as federal.

If it coded a 1 or 2 it is an early distribution and is taxable to the extent it exceeds your basis in the plan. Your basis in the plan is the sum of all contributions you made over the years less all previous distributions from the plan. Do not include employer contributions or earnings. You may need to ask the plan administrator for this information.

See: https://revenue-pa.custhelp.com/app/answers/detail/a_id/1470/~/how-do-i-know-if-the-amount-on-my-109...