PA help please

[AnnieR]

Just when you think it's going to be easy, it shifts gears. Client, retired person, SS, pension, and a small amt of forgiven credit card debt. She lived in OH for 1/3 of year, PA, 2/3. The 1099Rs divide the pension exactly as they should be, in fact she has 2 1099s, one with OH income, one with PA. From what I have read, PA does not tax retirement income...why does my software do that? Should I just not report it, the 1099C was issued with the OH address. HELP!!!

AnnieR

[rfassett]

Hi Annie,

Assuming you are using ATX, on page 1 of the PA-40 (not the "data" page), click on the 1099R worksheet at the bottom and click on the down arrow in the box that says "Select for PA purposes" and on the line for the income you want to exclude. Select "non-taxable". This will allow the 1099R info to flow to the PA W2S as federal income but will keep it off of the PA 40. You are correct, with limited exceptions, pension income is not taxable in PA.

[AnnieR]

Thanks so much, living close to the PA line, I do some PA returns every year, usually OH residents working in PA. Just never had a retiree before.

AnnieR

[rfassett]

And I live within 10 miles of the Ohio line so I get to do several Ohio returns as well.