![]() ![]() ![]() Early distributions, in most cases, will be taxable, but there are certain circumstances in which they may not be. Ultimately, the tax treatment of income received from a retirement benefit plan will be plan dependent. A normal distribution (from age 59 ½ and older) will not be taxable. Payments from a retirement plan may be taxable, depending on the type of distribution. If you receive a W-2 or 1099-NEC, that income is reportable and taxable. Further, many Pennsylvanians consider themselves retired but have a part time job. Some compensation arrangements pay out taxable distributions well into retirement. If the income you received is earned, then it is taxable at the local level, regardless of the age of the person that received said income.īeing ‘retired’ does not necessarily mean that the income you received isn’t taxable. Local Earned income tax is based on earned income, which mirrors the compensation you report at the state level.
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