PA 1099-R distribution code 7D

Forum|Forum|3 years ago
February 18, 2023
1 reply
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There appears to be an error in Turbotax carrying over 1099-R income to the PA state return. While most 1099-R income in PA is not taxable, there are situations where the income is taxable. My understanding is that if the distribution code on the 1099-R form is 7D, it means that the income is taxable in PA. I even had one 1099-R form that specifically shows the amount of the distribution that is taxable in PA (Box 16 on 1099-R form), yet this amount does not transfer over as taxable income on my PA filing. This situation also occurred in my 2021 filing which resulted in my owing back taxes in PA along with a penalty and interest. Is Turbotax aware of this issue and is something being done to correct it?

DanaB27

Level 15

Yes, distributions with code D7 are taxable income in PA and are reported as interest income on PA Schedule A. Please review your selection on the “What kind of retirement income do you have from Pennsylvania?” screen during the state interview.

"For tax years beginning on or after January 1, 2005, any amounts reported in gross income for Federal Income Tax purposes for a retirement annuity that is not an employer sponsored retirement annuity (reported as Codes 1D, 2D, 3D, 4D or 7D in Box 7 beginning with 2013 Forms 1099-R) are reported as interest income on PA Schedule A regardless of whether the annuity payments began before January 1, 2005, or on or after January 1, 2005." (PA DOR)

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neilmosesAuthor

Level 2

Thanks for your response. When I entered the 1099-R information during the Federal review, I indicated that the distribution code was 7D. So why isn't Turbotax automatically entering this as taxable income into my PA filing? This seems to be an error in the Turbotax software.