Pa schedule w-2s Part B/

Column F. Adjusted plan basis – If the distribution code in Column D is 1, 2, J, L or S from the 1099-R, enter the amount of the adjusted basis in the plan. The adjusted basis in the plan or IRA is generally equal to the sum of the contributions to the plan or IRA minus the sum of prior distributions which were previously treated as nontaxable as a recovery of such contributions.

Does sum of the contributions mean the amount that is in Row E? Column D is a 1. There was no money contributed to these pensions in 2010.
 And how to I get back in State taxes to fix this.. I click on State taxes and Edit and it opens up to Business Information which I keep choosing "do not report and no longer exists" then continue and it takes me right back to it.
  • Unlike the IRS, Pennsylvania does not allow you to deduct 401(k) contributions on your PA income tax return. So your adjusted basis in the sum of all the nondeductible contributions you made while you were working.
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PA does not give you a tax break when you make contributions to a retirement plan. So your contributions to the retirement plan is your basis in the plan for state tax purposes, ie, your contributions to the plan have already been taxed by the state of PA. Your employer contributions and any earnings/growth have not been taxed by PA. PA expects that you keep track of your basis so you don't cheat yourself. Often the plan administrator does this for you.

If you take an early distribution from a 401k account, PA utilizes a cost recovery scheme. The distribution is considered a return of your cost basis first. Any further distribution is taxable income for state purposes.

Say you contributed $4000 to the plan over the years(your cost basis). You took a distribution of $5000. Only $1000 should be state taxable, the first $4000 is a return of your costs. The program will ask for your cost basis of this distribution and will do the math.

You basically already answered your question:  The adjusted basis in the plan or IRA is generally equal to the sum of the contributions to the plan or IRA minus the sum of prior distributions which were previously treated as nontaxable as a recovery of such contributions.

Hope this helps.
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