Is income noted on a 1099R, taxable for PA Income tax purposes? The income is being withdrawn from IRAs created with 401K savings

[re2boys · Accepted solution]

You are asked during the interview what type of income is represented by each 1099R.  Your answer determines if tthe 1099R income is taxable on PA return.  See picture attached.

If box 7  on your 1099R is coded 4 or 7, it isn't taxable.

If coded with a D, such as 1D,4D, 7D  it is a commercial annuity and is taxable same as federal.

If coded 1 or 2, it is an early distribution and is taxable to the extent the distribution exceeds your cost basis in the retirement plan.