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D
dearnest1
March 1, 2023
Question

Why does a code 2 on line 7 of my husband's 1099R cause us to owe $1000 in state tax. We don't have to pay state tax on our pensions so why would we owe $1000?

  • March 1, 2023
  • 1 reply
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1 reply

B
BillM223
March 1, 2023

It is common even for states that do not tax pensions, to assess tax on early pension distributions. Code 2 indicates "Early distribution, exception applies".

 

Since we do not know which state you are referring, we cannot be positive of why your state is charging you tax.

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