Students interested in this college are also interested in: Colorado State University, University of Washington, University of California, Berkeley, University of Oregon, University of California, Los Angeles, University of California, Santa Barbara. Overview.
These plans areexcluded from tax on your federal return, but not onyour state income tax return. Once you retire and beginto receive pension benefits, you will pay federal tax onyour retirement payments, but you will not pay PA taxon those benefits.
Pennsylvania and Mississippi are unique in that they are the only states in the country that exempt all retirement income, even IRA, and 401(k) distributions. There are, however, a few states that are less than hospitable to retirees. Not only are their tax rates high, but they also fully tax pension income.