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.
The trade-off: Those states generally don't tax at least a portion of the withdrawals. But how much of the withdrawal is exempt from taxation depends on the state. Pennsylvania doesn't tax any retirement income, including Social Security and pensions, although it limits the exemption to taxpayers older than 59Â½.