Pennsylvania doesn't impose income tax on payments you receive that are commonly recognized retirement benefits distributed from eligible employer-sponsored retirement plans. Eligible employer-sponsored retirement plans can, but do not necessarily, include employer-sponsored deferred compensation plans, pension or profit sharing plans, 401(k) plans, thrift plans, thrift savings plans, or employee welfare plans. Ask your employer or plan administrator if your employer's retirement plan is an eligible plan for Pennsylvania income tax purposes. Eligible nonemployer-sponsored retirement plans can, but do not necessarily, include Individual Retirement Accounts (IRAs) or Roth IRAs.