Question

Why is income on 1040 line 1 not included in my PA state return?

Forum|Forum|6 years ago
March 30, 2020
1 reply
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I entered my wife's and my overseas pensions as miscellaneous income following instructions in this community as the alternative for creating a 1099-R due the issues using "99-9999999" as employer tax number.

The total of the 2 items appears on Line 1 of my 1040 in TurboTax. However it doesn't appear anywhere on my TurboTax PA state tax return. Why not?

Further, should I use the 1099-R approach anyway, given retirement income may not be taxable in PA?

DawnC

Employee

Yes, you can use the substitute 1099-R instructions to report the retirement income so that it shows up as retirement income on the PA return and can be excluded if necessary. A substitute 1099-R is entered exactly in the same manner as a 1099-R. If you go this route, you will not be able to e-file because of the 99-9999999. Returns with substitute forms can't be e-filed; they have to be printed and mailed.

If you choose to enter it as other misc. income, you may need to make a manual adjustment (addition to income) on the PA state return if it is not carrying over to the PA misc income line and the income is taxable. Most retirement income is excluded from PA income.

The following are examples of income not subject to PA tax:

• Social Security benefits and Railroad Retirement benefits.

• Commonly recognized pension, old age, or retirement benefits paid after becoming eligible to retire and retiring.

• United Mine Workers Pension.

• Military pension benefits.

• Civil Service Annuity.

• Unemployment compensation and public assistance.

If it is non-taxable, you can leave it the way it is as it should not be included in PA income.

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