State guide
Does Pennsylvania tax retirement income? IRAs, Roth conversions and Social Security (2026)
By Secure Retirement PlannerUpdated
If you retire in Pennsylvania at 59½ or older, the state does not tax your Social Security, pension or IRA withdrawals. Your Roth conversion is usually free of state tax too. The whole amount must go into the Roth, by direct transfer or within 60 days.
The state's tax instructions say this for the 2025 tax year. The catch is for you if you are under 59½. If federal tax is withheld and you don't put it back into the Roth, Pennsylvania can tax that part at 3.07%. It only taxes the amount above what you put in.
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The short version
- If your whole IRA goes into the Roth, Pennsylvania generally does not tax your conversion.
- Once you are 59½ or older, your IRA payouts are not taxed in Pennsylvania, so you face no PA tax either way.
- If you are under 59½, federal withholding you don't replace in the Roth can be PA-taxable.
- Pennsylvania never let you deduct your IRA contributions, so they count as your PA basis.
- If you plan to move a 401(k) to a Roth, separate employer-plan rules apply. Check them with a PA preparer.
Does Pennsylvania tax retirement income?
For most retirees, no. Pennsylvania does not tax your Social Security. It does not tax your pension once you retire, or your IRA payouts at 59½ or older. If you are younger, some payouts can be taxed at the flat 3.07% rate.
| Income type | Taxed by Pennsylvania in 2026? | Notes |
|---|---|---|
| Social Security | No | Railroad retirement is not taxed either |
| Public pensions | No | SERS and PSERS payments are not PA-taxable |
| Private pensions | No, once you retire | Eligible employer plan payments after you qualify for retirement and retire |
| IRA and 401(k) withdrawals | No at 59½ or older | IRA payouts before 59½ are taxed above your contributions at 3.07%. 401(k) payouts follow the employer plan rule |
| Roth conversions | Usually no | Exempt at 59½ or older, or if the whole amount reaches the Roth. A 401(k) to Roth move before you retire can be taxed |
Does Pennsylvania tax a Roth conversion?
Usually not. The state's tax instructions have a section called "Roth IRA Rollover." It says you pay no PA tax on a move from a traditional IRA to a Roth IRA in two cases. You roll over the entire withdrawal directly (trustee to trustee). Or you put the entire amount into a Roth IRA within 60 days.
The 1099-R tips in the PA-40 booklet say the same about conversions reported with code 1 in Box 7. Your whole payout, including tax withheld, must land in the new IRA. If part of it doesn't, that part is taxable to the extent it is more than your adjusted basis. Your basis is what you put in, less what you took out before.
Pennsylvania's flat rate is 3.07%. That is the rate in the 2025 PA-40 instructions. The 2026 estimated tax rule in the same booklet uses the same rate: $14,000 of income equals $430 of tax.
Does my age matter for Pennsylvania?
Yes, a lot. Pennsylvania says IRA payouts are not taxable if you get them on or after age 59½. That covers lump sums too.
So if you are 59½ or older, your conversion isn't PA-taxable, even if some of it went to withholding. The withholding warning matters mainly if you are under 59½.
If you retired before 59½, the rules are strict. Pennsylvania has none of the federal exceptions for early withdrawals. Payouts after you retire but before 59½ are taxable to the extent they are more than your contributions. That holds even if you take equal payments and owe no federal penalty.
| Your situation | PA tax on the conversion |
|---|---|
| 59½ or older, any conversion | None (IRA payouts after 59½ are not PA-taxable) |
| Under 59½, full amount moved to the Roth (including any withholding) | None |
| Under 59½, direct transfer with tax withheld and not replaced | The withheld part, above your PA basis, at 3.07% |
| Under 59½, partial conversion with cash kept | The kept part, above your PA basis, at 3.07% |
Why do my IRA contributions matter for Pennsylvania?
Pennsylvania never let you deduct your IRA contributions. So the money you put in was already taxed by the state, and it comes back out to you tax-free in PA.
Pennsylvania uses the cost recovery method. Your contributions come out first, and only the amount above them is taxable. Keep records of every IRA contribution you made. The state can ask you to prove your basis.
What about converting a 401(k), 403(b) or state pension money?
Your employer plan follows different PA rules. Payments from an eligible plan are not PA-taxable once you qualify for retirement and retire. Before then, a rollover is exempt only if the amount moved is not taxable for federal purposes. A Roth rollover is federally taxable.
In plain terms, if you move a 401(k) to a Roth IRA before you retire, it could be PA-taxable. That is true at least for your employer's money and the earnings. Your own 401(k) contributions were already PA-taxed. This rule is tricky, so confirm it with a Pennsylvania-licensed tax preparer. Our guide to 401(k) to Roth IRA covers the federal side.
If your money comes from SERS, PSERS, the Pennsylvania Municipal Employees' Retirement System or the U.S. Civil Service Commission Retirement Disability Plan, the state's instructions say it is not PA-taxable. The 1099-R code does not matter.
Does Pennsylvania tax Social Security, and what if I move?
No. Pennsylvania does not tax your Social Security or railroad retirement benefits.
If you move in or out during the year, you are a part-year resident. Pennsylvania taxes all your income while you live there, plus PA-source income while you don't. Since most conversions are PA-exempt anyway, your move date usually matters more for the state you are moving to.
Your real cost is federal tax. Use Roth conversion tax calculator to see what a conversion adds to your federal bill.
Example: a Pittsburgh couple, before and after 59½
Ellen and Paul file jointly. They expect $85,000 of other income in 2026. Ellen converts $50,000 from her traditional IRA by direct transfer. Their federal taxable income goes from $52,800 to $102,800. That adds about $6,200 in federal tax.
If Ellen is 61, Pennsylvania doesn't tax the conversion. That's true even if she has some federal tax withheld, because IRA payouts after 59½ are not PA-taxable.
Now say Ellen is 57 and retired. She has $10,000 withheld for federal tax and doesn't replace it. Only $40,000 reaches the Roth. If the $10,000 is above her PA basis, Pennsylvania taxes it: about $307. The IRS also charges a 10% early withdrawal penalty on the withheld $10,000, about $1,000.
What this means for you: once you are past 59½, Pennsylvania drops out of the picture. Your federal bill is the one to plan around.
| Scenario | Federal income tax | PA tax | Federal 10% penalty |
|---|---|---|---|
| Ellen is 61, any withholding | about $6,200 | $0 | $0 |
| Ellen is 57, full $50,000 into the Roth | about $6,200 | $0 | $0 |
| Ellen is 57, $10,000 withheld and not replaced | about $6,200 | about $307 | about $1,000 |
Hypothetical example. Assumes married filing jointly, both under 65, no Social Security, $85,000 of other income, the 2026 federal standard deduction ($32,200) and 2026 brackets (IRS Rev. Proc. 2025-32). The PA figure assumes the withheld $10,000 is fully above Ellen's PA basis and uses the 3.07% rate. Local taxes are not included. Your numbers will differ.
Common questions
Does Pennsylvania tax Roth conversions?
Generally no, if your entire payout goes into the Roth IRA by direct transfer or within 60 days. If you're 59½ or older, your IRA payouts aren't PA-taxable at all.
Does Pennsylvania tax IRA withdrawals after 59½?
No. The PA-40 instructions say IRA payouts you get on or after age 59½ are not taxable.
What if federal tax is withheld from my conversion?
If you're under 59½, the withheld amount must also go into your Roth for the conversion to be fully PA-exempt. If not, the withheld part can be taxable above your contributions.
Are qualified Roth IRA withdrawals taxed in Pennsylvania?
Not if you're 59½ or older. Before 59½, PA taxes your IRA payouts, including from a Roth IRA, to the extent they are more than your past contributions.
Does Pennsylvania tax Social Security?
No. Your Social Security and railroad retirement benefits are not taxable for PA personal income tax.
Is a 401(k) to Roth IRA rollover taxed in Pennsylvania?
It can be if you haven't retired yet. PA exempts plan rollovers only when they're not federally taxable. Ask a Pennsylvania-licensed preparer about your plan.
Sources
Facts on this page were last checked on November 9, 2026.
- PA Department of Revenue, 2025 PA-40 Personal Income Tax Return Instructions · IRA, Roth IRA rollover and 59½ rules, 1099-R tips, 3.07% rate, 2026 estimated tax threshold, Social Security. Read Nov 9, 2026.
- PA Department of Revenue, PA Personal Income Tax Guide: Gross Compensation · Cost recovery method and previously taxed contributions. Read Nov 9, 2026.
- IRS Rev. Proc. 2025-32 (2026 inflation adjustments) · 2026 federal brackets and standard deduction. Read Nov 9, 2026.
Who wrote this
This guide was written and fact-checked by the Secure Retirement Planner editorial team using IRS, CMS and Social Security sources listed above. We update guides when the law or yearly limits change. How we research.