If you rollover retirement money, should you owe in PA taxes?

Forum|Forum|2 years ago
February 5, 2024
1 reply
0 views

We moved retirement money (401K and Roth) to another 401K and Roth account. When I submitted my 1099 information, I now owe PA tax. Is this correct?

TurboTax Deluxe Online

DianeW777

No. Pennsylvania (PA) taxes the money when you put it into the 401(k) because they do not recognize any deferral. Follow the steps below so that none of the retirement money is taxable on PA.

First in the federal return be sure to select 'I converted some or all of it to a Roth IRA' on the screen 'Tell us if you moved the money through a rollover or conversion'. It will be taxable on your federal return without any penalty.
When you go through the PA return watch for the question 'what kind of retirement income do you have from PA? Make the selection 'I'm eligible, plan is eligible (no PA tax)'
Next select the 'Entire amount of this distribution is not taxable to PA' if this screen comes up a second time. If not, continue to finish your PA return.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

miss364350Author

I am not seeing those type of questions. I have two types of rollovers. A 401k and a Roth. The 401k asked me if I moved it from a 401k to a Roth. Which we did not. We rolled straight over to another 401k.
in my pa state tax return it is asking for a “basis” on the Roth. I entered the total amount of the Roth we rolled over and it took the amount I owed to PA away. Is that the right thing to do?