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.
Federal civil service pensions in Pennsylvania: does Pennsylvania tax federal pensions.
Pennsylvania Form PA-40, line by line: Pennsylvania Form PA-40 line by line, Pennsylvania Form PA-40 line 9 and Pennsylvania Form PA-40 lines 11 and 12.
More on public pension systems, topic by topic: PA SERS domestic relations orders, PA SERS disability retirement and PA SERS purchasing service.
More state retirement-income schedules, line by line: Pennsylvania PA-40 retirement income.
Inherited an IRA? What the state’s own documents say about taxing those withdrawals: Pennsylvania tax on inherited IRA withdrawals.
Hold a 403(b) or 457(b)? What the state’s own documents say about taxing those withdrawals: does Pennsylvania tax 403(b) and 457(b) withdrawals.
The Pennsylvania Municipal Retirement System options, refund and lump sum rules, from the system’s own documents: Pennsylvania PMRS retirement decisions.
Married, or planning for a spouse’s death? Whether the state is a community property state, from its own statutes: Is Pennsylvania a community property state?.
The state’s income tax schedule: the Pennsylvania tax brackets for 2026.
Withdrawing from an IRA or 401(k)? Whether the state withholds tax from it, from its own documents: Pennsylvania tax withholding on IRA and 401(k) withdrawals.
Taking money out of your TSP? How the state taxes it, from its own tax documents: Does Pennsylvania tax TSP withdrawals?.
A pension earned in another state, or paid after a move, is covered here: does Pennsylvania tax out-of-state pensions.
The Philadelphia Board of Pensions payment options, DROP and refund rules, from its own documents: Philadelphia pension retirement decisions.
Trusts have their own page: does Pennsylvania tax trust income.
Dividends and interest have their own page: does Pennsylvania tax dividends and interest.
Contributing to an HSA? How the state taxes it, from its own tax documents: Does Pennsylvania tax HSA contributions?.
Annuity payments have their own page: does Pennsylvania tax annuity income.
Planning for what you leave behind? The state’s estate tax answer, from its own tax documents: Does Pennsylvania have an estate tax?.
Military retired pay has its own page: does Pennsylvania tax military retirement.
Saving for a child’s college? The state’s 529 break has its own page: Pennsylvania 529 plan tax deduction.
Estimate a PSERS annuity from class, service and final average salary: PSERS retirement calculator.
Selling stocks, funds or real estate has its own page: does Pennsylvania tax capital gains.
Withdrawals from a 401(k) or IRA have their own page: does Pennsylvania tax 401(k) and IRA withdrawals.
The SERS options, withdrawal and refund rules, from the system’s own documents: Pennsylvania SERS retirement decisions.
Related guides on this topic: Public Pension Retirement Decisions by System.
Related state retirement tax guides: Does Pennsylvania Tax Social Security? and Pennsylvania to Arizona Retirement Taxes.
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. |
|---|---|
| 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 not taxable only if the plan is an eligible Pennsylvania retirement plan, the plan’s retirement age or years of service requirement has been met, and you have retired from service with that employer, while codes 1 or 2 for early withdrawals are taxable when the plan is not an eligible plan or you retired before meeting those conditions. |
| 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. |
Compare your next step
Not ready to talk to anyone? Browse our guides.Optional next step
Want help with your retirement plan?
Request an adviser match to discuss how this fits your retirement withdrawals.
- No fee to request a match
- No obligation to hire
Expect questions about your situation, your name, email and phone, and phone verification by text. A match is not guaranteed.
The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide may earn a referral payment through this service, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
Opens here. Nothing loads and nothing reaches Kapitalwise until you press the button.
How our partner relationships workCompare an adviser match before you decide
Ask about the full fee, what it covers and how the adviser is paid. A match is an introduction, not a recommendation from Clear Money Guide.
- Free matching service
- No obligation to hire
The matching service is run by WiserAdvisor, an independent advisor-matching company. It opens on their site, asks for your ZIP code and a few questions, and matches you with 2 to 3 vetted advisors. It is free to you. WiserAdvisor states the service is built for portfolios of $250,000 and above. By submitting, you consent to emails, phone calls and text messages from WiserAdvisor and up to three advisors, so expect to be contacted. Advisers pay for the introduction. Clear Money Guide may earn a referral payment for a qualifying completed form, whether or not you ever hire anyone. There is no obligation to hire anyone.
Continue to WiserAdvisorOpens on WiserAdvisor’s site in a new tab.
Source: WiserAdvisor’s service descriptionSocial 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.
Figures verified against the Pennsylvania Department of Revenue PA Personal Income Tax Guide, Gross Compensation page on September 30, 2026; the survivor and disability wording for Social Security was not re-checked.
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.