Updated September 5, 2026. Quick answer: Pennsylvania does not tax pension income, employer retirement plan distributions, or IRA distributions at all once you have retired after meeting the plan’s age or years of service conditions, and it also fully exempts Social Security. The only retirement money PA taxes is an early or premature withdrawal taken before you meet those retirement conditions.
Confidence note: high. This page is scoped to pension, IRA and 401(k) taxation specifically. For the state’s full retirement-tax picture (Social Security, tax rates, estate and probate), see how Pennsylvania taxes retirement income generally.
How pensions and retirement-account withdrawals are taxed
| Public (state/local government) pensions | Public pensions from Pennsylvania state and local government retirement systems, such as the State Employees Retirement System and the Public School Employees Retirement System, are not taxable once the retiree has separated from service after meeting the plan’s age or years of service conditions for retirement. |
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| Private (employer) pensions | Private employer pension and 401(k) or 403(b) plan distributions are not taxable for Pennsylvania purposes if the retiree separated from service after meeting the plan’s normal retirement age or service conditions. On Form 1099-R, a distribution code of 7 (normal distribution) is treated as not taxable, while codes 1 or 2 for early withdrawals are taxable. |
| Federal government pensions (FERS/CSRS) | Federal government pensions, including the U.S. Civil Service Commission Retirement Disability Plan, are named directly in Pennsylvania guidance as an eligible retirement plan, so distributions taken after meeting the plan’s retirement conditions are not taxable. |
| Military retirement pay | Military retired or retainer pay for uniformed service members under Chapter 71 of Title 10 of the U.S. Code is specifically listed as an eligible Pennsylvania retirement plan and is not taxable. |
| IRA and 401(k)/403(b) distributions | IRA distributions taken after the account holder has met the plan’s retirement age conditions are not taxable. Premature IRA withdrawals in excess of previously taxed contributions are taxable. |
| General retirement-income exclusion | Pennsylvania does not use a dollar-capped general exclusion. Instead, 72 P.S. sec. 7301(d) removes old age and retirement benefit payments from the statutory definition of taxable compensation entirely once the recipient has retired after meeting the plan’s age or service conditions, which functions as a full exclusion for nearly all retirement income regardless of type or amount. |
Coordinate this with your overall retirement plan
An adviser can help weigh how much of a pension or IRA withdrawal to take this year, whether a Roth conversion makes sense before or after a move, and how state tax interacts with the rest of your plan, but that does not replace the numbers in your own return.
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Social Security
Social Security retirement, survivor, and disability benefits are exempt from Pennsylvania personal income tax. Social Security has its own rules in every state; see the full breakdown in how Pennsylvania taxes retirement income generally.
Statute and sources
Governing citation: 72 P.S. sec. 7301(d).
Read September 5, 2026.
Related: how Pennsylvania taxes retirement income generally · does Pennsylvania tax Roth conversions? · Roth conversion taxes, all 51 jurisdictions.
General information drawn from each state’s own published statutes and revenue-department guidance, not legal, tax or financial advice. Figures and exemption amounts are current as of the date in the quick answer, are set by state law, and can change by future legislation; any pending bill named on this page is not yet law. This page cannot see your own return, which governs. We are not a law firm, a tax adviser, or a fiduciary, and this is not personalized advice.