WKARROLL
-
Total Posts
:
253
-
Reward points
:
149
- Joined: 3/26/2005
- Location: Snowhill Falls,Cresco
-
Status: offline
|
PA State Tax
-
Wednesday, June 27, 2007 6:50 AM
Some one informed me that when I receive my retirement pension from the federal government that state taxes are exempt from retirement checks?
|
|
vallygrl2000
-
Total Posts
:
1627
-
Reward points
:
0
- Joined: 9/21/2006
-
Status: offline
|
RE: PA State Tax
-
Wednesday, June 27, 2007 9:03 AM
I heard it was also 401(k) and IRA too.
|
|
20md
-
Total Posts
:
2130
-
Reward points
:
130
- Joined: 4/4/2006
-
Status: offline
|
RE: PA State Tax
-
Wednesday, June 27, 2007 11:22 AM
I paid state tax on my IRA, but I took an early withdrawal, I'm nowhere near retirement age.
|
|
vallygrl2000
-
Total Posts
:
1627
-
Reward points
:
0
- Joined: 9/21/2006
-
Status: offline
|
RE: PA State Tax
-
Wednesday, June 27, 2007 11:29 AM
Perhaps because of the early withdrawal (under the 59 1/2 years of age or whatever it is since I forget) I wouldn't mind some re-clarification regarding the tax rules in PA on pensions, and retirement accounts either as I have heard basically the same thing. Perhaps Frank can answer these for us?
|
|
matt451
-
Total Posts
:
1677
-
Reward points
:
136
- Joined: 12/15/2005
-
Status: offline
|
RE: PA State Tax
-
Wednesday, June 27, 2007 4:11 PM
I had asked a similar question and the answer I got (Summarized) was PA taxes you when you put it into the retirement account not when you withdraw it later on.
<message edited by matt451 on Wednesday, June 27, 2007 4:46 PM>
|
|
salzing
-
Total Posts
:
654
-
Reward points
:
0
- Joined: 7/21/2003
- Location: Analomink Pennsylvania
-
Status: offline
|
RE: PA State Tax
-
Thursday, June 28, 2007 9:16 AM
Correct, since PA does not allow a deduction for retirement contributions, withdrawals are not taxed if taken at 59 1/2. Under 59 1/2 your basis is not taxed either, only your gains are taxed . Same principal, you already paid tax on your contributions but had not paid tax on your gains yet. This is why it's very important to know what your basis is if you take an early withdrawal, for PA tax purposes. The 10% Federal tax penalty ( under 59 1/2 ) still applies unless you qualify for one of the exemptions.
If you pick up a starving dog and make him prosperous, he will not bite you. This is the principal difference between a dog and a man. ~Mark Twain
|
|
poconos05
-
Total Posts
:
1022
-
Reward points
:
131
- Joined: 1/5/2004
- Location: Lords Valley Pennsylvania
-
Status: offline
|
RE: PA State Tax
-
Thursday, June 28, 2007 2:23 PM
What about defined benefit pensions -- ie, the old-style pensions where the employer foots the bill? I'm retiring 6/30, but I'm not yet 59-1/2. I'll be back at the same old grind on 7/2, albeit as a 4-day a week consultant through a contracting firm (aka having my cake and eating it too). I'm not planning on touching any IRA or 401K monies until I'm truly retired...
-Lyn And Shadow and Moose, the canine contingent For too many people GIGO means "Garbage In, Gospel Out." ("The computer says it, we believe it, and that settles it.")
|
|
salzing
-
Total Posts
:
654
-
Reward points
:
0
- Joined: 7/21/2003
- Location: Analomink Pennsylvania
-
Status: offline
|
RE: PA State Tax
-
Thursday, June 28, 2007 3:03 PM
As long as you retire and receive distributions from a qualified pension plan after meeting the age conditions of the plan or years of service conditions of the plan, the distributions are generally not be taxable for PA tax purpose. Check with your benefits department, they should be able to tell you if you did.
If you pick up a starving dog and make him prosperous, he will not bite you. This is the principal difference between a dog and a man. ~Mark Twain
|
|
WKARROLL
-
Total Posts
:
253
-
Reward points
:
149
- Joined: 3/26/2005
- Location: Snowhill Falls,Cresco
-
Status: offline
|
RE: PA State Tax
-
Friday, June 29, 2007 5:31 AM
Thanks I will be 56 when I retire from the government with a pension and my wife will be 55..
|
|
salzing
-
Total Posts
:
654
-
Reward points
:
0
- Joined: 7/21/2003
- Location: Analomink Pennsylvania
-
Status: offline
|
RE: PA State Tax
-
Friday, June 29, 2007 6:32 AM
If you pick up a starving dog and make him prosperous, he will not bite you. This is the principal difference between a dog and a man. ~Mark Twain
|
|
vallygrl2000
-
Total Posts
:
1627
-
Reward points
:
0
- Joined: 9/21/2006
-
Status: offline
|
RE: PA State Tax
-
Friday, June 29, 2007 6:59 AM
Thanks for all the info Salzing
|
|
poconos05
-
Total Posts
:
1022
-
Reward points
:
131
- Joined: 1/5/2004
- Location: Lords Valley Pennsylvania
-
Status: offline
|
RE: PA State Tax
-
Friday, June 29, 2007 6:52 PM
Thanks to all for the info. My pension is not taxable as I meet 2 separate criteria of the plan -- age 55 and 15 years worked (secondary), as well as 30 years worked regardless of age (primary). Now to enjoy my retirement -- all 2 days of it before I'm back at work! 
-Lyn And Shadow and Moose, the canine contingent For too many people GIGO means "Garbage In, Gospel Out." ("The computer says it, we believe it, and that settles it.")
|
|
2PoconoSue
-
Total Posts
:
2150
-
Reward points
:
130
- Joined: 1/14/2005
- Location: Kingston
-
Status: offline
|
RE: PA State Tax
-
Friday, June 29, 2007 8:10 PM
I'm not planning on touching any IRA or 401K monies until I'm truly retired...
Ditto...or until I am 59 "and a half". Isn't it funny that the half-year comes into play with your age later in life?  When was the last time you said I am X and-a-half, before age 10? 
Don't sweat the petty things, and don't pet the sweaty things.
Women & Cats will do as they please. Men & Dogs had better get used to it.
|
|
salzing
-
Total Posts
:
654
-
Reward points
:
0
- Joined: 7/21/2003
- Location: Analomink Pennsylvania
-
Status: offline
|
RE: PA State Tax
-
Friday, June 29, 2007 10:29 PM
Remember...we are only talking about PA State Tax.... still subject to Federal Income Tax.
If you pick up a starving dog and make him prosperous, he will not bite you. This is the principal difference between a dog and a man. ~Mark Twain
|
|
poconos05
-
Total Posts
:
1022
-
Reward points
:
131
- Joined: 1/5/2004
- Location: Lords Valley Pennsylvania
-
Status: offline
|
RE: PA State Tax
-
Saturday, June 30, 2007 12:19 AM
True, the pension is still subject to federal tax. That's why I'm planning to (federal tax) hide as much of the pension as possible by making large contributions to the new employer's 401K...
<message edited by poconos05 on Saturday, June 30, 2007 8:29 AM>
-Lyn And Shadow and Moose, the canine contingent For too many people GIGO means "Garbage In, Gospel Out." ("The computer says it, we believe it, and that settles it.")
|
|
WKARROLL
-
Total Posts
:
253
-
Reward points
:
149
- Joined: 3/26/2005
- Location: Snowhill Falls,Cresco
-
Status: offline
|
RE: PA State Tax
-
Saturday, June 30, 2007 8:06 AM
So what I understand is that I don't have to be 59 and a half to have the PA tax reduction as long as I have the credit amount of time to receive a full federal pension being age 55?
|
|
Frankg
-
Total Posts
:
10094
-
Reward points
:
134
- Joined: 7/19/2004
- Location: West End Pennsylvania
-
Status: offline
|
RE: PA State Tax
-
Saturday, June 30, 2007 9:39 AM
sorry i was not able to answer sooner. Thanks salzing for answering wkarroll - you are not punished for getting your years in prior to 59 lol
|
|