PA41 - how to report 1009r distribution as income, all PA41 values currently 0

[tomc0035]

I have a very simple trust with the person transferring the property living in FL (never lived in PA) , the Fiduciary is me here in PA, and it has a single beneficiary that also lives in FL.   It generates only one 1099-R  form with the following boxes filled in:

Gross Distribution(1),

Taxable Amount (2a),

Distribution Code of 7D(7),

State (13) filled in with PA... and a

State Distribution(14) with same amount as box 1. 

On my federal return, I entered this 1099-R information as 1099-R should be entered as Other Income.

Currently, when I do the PA State, the PA-41 shows no income, therefore all values on PA-41 shows as $0.  The PA-41 Schedule DD shows box 8a and 11 - "Total required to be distributed", "Total cash Distributed" as the 1041, Lines 17/18.  

1.  Do I even need to file a PA-41 ?  

2.  If I do need to file,  is the PA-41 correct as is?

3.  Or do I enter the 1099-R Gross Distribution so it shows up as income and appears on PA-41 Schedule DD as Lines 1A/B.

4.  Is TurboTax Business for PA State correct?

Appreciate the help.

Tom

[DaveF1006 · Accepted solution]

Generally, if box 7 of your 1099R is coded 7 or 4, it is not taxable for PA income tax purposes. If it coded 1 or 2, it may be taxable to the extent that the distributions exceed your basis in your retirement plan. If coded 1D or 7D, it is a commercial annuity and is taxable same as federal. 

Yes, you can prepare a PA-41 state return in Turbo Tax if you are required to.

[tomc0035]

It is coded as 7D and is an annuity.  

[DaveF1006 · Accepted solution]

Yes, it would be taxable then in PA-41. i would enter it as Estate or Trust income.