What am I doing wrong? My pennyslvania pension is not taxable in my state and it is showing up as taxable income on my pennsylavania taxes.

[Bill471]

I am completing the federal but my state is showing my PA pension as income.

[Phillip1 · Accepted solution]

There are some state related tax benefits for specified recipients. Usually, the state tax benefit can be activated by doing the following.

1. Go to the Federal Taxes (Personal in Home and Business) category.
   
2. Go to the Wages and Income (Personal Income in Home and Business) section.
3. Choose the option "I'll choose what I want to work on".
4. In the 2016 Income Summary, find the section labeled Retirement Plans and Social Security.
5. Click start or update on the line labeled IRA, 401(k), Pension Plan Withdrawals (1099-R)
6. After entering your 1099R information on the screen labeled "Enter your 1099-R" click continue.
7. Answer no to the question on the screen labeled "Let's Double Check Your Info - On the Form 1099-R you received, is the IRA/SEP/SIMPLE box between box 7 and box 8 checked?"
8. Answer the public safety employee question and hit continue.
9. On the screen labeled "Where is this Distribution From?" there will be a list of options that should include a description of your pension. For example, in New York teacher's pension has a tax break, and clicking "New York State and City Education" on this screen activates this state tax break on the state return.

[DianeW]

While you are preparing the PA state return make the correct selection on your Form 1099R, if your box 7, is coded with a 7-normal pension distribution.  See the image attached.

[DEisen]

There is something wrong with the NY State and City Education pensions ... I have a call into support now but it is showing up as taxable in NY state as well when it never was when I went back to 2018 program, it had changed my entry to US Government (pension) so I think whatever is wrong is something they did in an update.  From what I can read it should Not be taxable in NY (sorry not sure about PA)

[souljourner]

I'm having a similar problem.  My NYS teacher pension is correctly entered on my Federal  return.  It should transfer onto my NYS return as a New York deduction for government pensions, but instead it is being deducted under the category "New York deduction for other pensions."  The bottom line is I AM getting my deduction for my pension on my state return, but it is appearing on the wrong line.  The end result is t he same ($0 taxable), but I am concerned that it is appearing on the wrong line of my state return, as it should be listed under New York deduction for government pension, which is where it has appeared in prior years.