1099R state tax in PA

[Nicki9]

I worked for a company that offered early retirement at 55 with 10 years of service. I left when i was 40 with 18 years of service. I started collecting after age 55. So I met the 55 early retirement obligation. The code shows "2". which is correct. But do I still owe PA tax on a pension that I qualified for the early retirement requirements, or am i exempt from PA tax, as they do not tax pensions?

[MaryK4]

No, you would not owe Pennsylvania tax on the retirement income since you met the plan's retirement age requirements.  In TurboTax, follow these steps to apply the exclusion:

In the Pennsylvania state section, go through the PA interview until you reach a screen titled "What kind of retirement income do you have from Pennsylvania?".
TurboTax will display the name of the payer from your 1099-R.
Use the dropdown menu to select "I'm eligible; plan's eligible (no PA tax)"

[Nicki9]

ok thanks, to confirm. Even though I did retire early, Federal says I took early retirement (code 2). But for the state, even though I did not meet their normal age of retirement, which is 65; and that I did retire before hitting their early retirement age of 55, I still can claim exempt from PA state tax for this pension because I did not start collecting until after I hit 55? Correct?

[DianeW777]

Yes, that's correct. Pennsylvania generally does not tax income from recognized retirement plans (pensions, 401(k)s, IRAs) for residents, regardless of age, provided the payments are received after meeting the plan's age or service requirements.

@Nicki9