I believe you are referring to this screen that says Pennsylvania needs to get specific about what type of retirement income you are receiving:
There are numerous options to choose from. Many plans are traditional or ROTH IRA's, for which there are two choices, one for age of under 59 1/2 and one for over that age. One of the options mentions a state government and another mentions military pensions. You would have to read each option and decide if it applies to you. You can choose the first option [No Entry] if you don't think any of the options apply to you.
There is no Distribution Type listed for a RMD in an inherited-IRA. It’s a very common distribution and I’ve had to do this for the past 4 tax filings. But never saw this code question before. What code do I choose when none of them truly describe this situation?
The State Type Code for your distribution is Traditional or Roth IRA: I'm under 59.5 (assuming the age is correct).
As you continue, you'll be asked about the Basis of your retirement income (zero), but you'll see the message: This is a distribution due to death and is not taxable for PA purposes.
This information comes through from the federal return, where you enter your 1099-R with distribution code 4, for Death Distribution.