PA income tax

[SPF1954]

An entered 1099R has a higher number in Box 1 than in Box 2a (taxable amount). The Federal return is using the taxable amount (2A) for calculation. As the form transfers to the PA return the gross amount (Box 1) is being used for tax calculation. 1099R Box 7 is marked with a distribution code of 7.  Does PA only consider the gross distribution amount for taxes or is there an entry error?

[DianeW777 · Accepted solution]

If you are retirement age the distribution is not taxable. Follow the steps below to accurately reflect the taxable amount, if any, for Pennsylvania (PA).

1. When you are in the Pennsylvania (PA) tax return continue to the screen 'What kind of retirement income do you have from PA?' 
2. You must answer this question and select the appropriate type of plan you have. 
3. Next you will edit any 1099-R to correct the PA state amount. 

• Review the 2023 Pennsylvania Personal Income Tax Return Instructions to see if your distribution is taxable on the PA return.
  • Distributions from an IRA, including a federal Roth IRA, are taxable to the extent the distribution exceeds your previous contributions. Distributions you receive after retiring but before age 591/2 are taxable even if you receive substantially equal payments, and you do not pay the federal penalty for an early withdrawal.
  • Check the withdrawal rules (page 12) in the link to compare your plan with the rules associated with your situation.