cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Level 1

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.

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

1 Best answer

Accepted Solutions
Level 1

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.

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.
2 Replies
Level 1

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.

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.
Level 7

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.

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.