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Aggravating_Foot_528 t1_jc8hu70 wrote

Reply to comment by ProfessorDerp22 in Filing my part-year resident taxes, and realized that Pennsylvania is truly hell on earth by [deleted]

There may be a way to prove that it was taxed going into a 401k by one state so that if you move to another that taxes it on its way out it may not be taxes. That's easy enough to figure out

Edit: I was wrong. You follow the tax laws of the state you are currently in. So you can be double taxed - taxes when put in in pa and when take out elsewhere if they tax that. But also you can avoid all state taxes - work/live in Ohio and don't pay state income tax on 401k contributions, then retire to PA and take them out tax free. https://www.bogleheads.org/forum/viewtopic.php?t=215167

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Hashtaglibertarian t1_jcb6hsn wrote

Damn that is some shit right there. They really do screw people over in every state.

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Aggravating_Foot_528 t1_jcb8ily wrote

The key is if you put all your money in in PA to move to a state where they don't tax it at all (no income tax) or IL or... Alabama? Where they don't tax it coming out of the retirement acct.

I guess it would take Congress to pass a law to harmonize the system if Congress itself constitutionally.can. I'm not sure they can because states can levy their own taxes without the federal government. Maybe the federal government could arm twist like they did with the drinking and smoking age.

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Hashtaglibertarian t1_jcbph2w wrote

I couldn’t even think of a solution so props to you for even putting that together. I love solution people ☺️

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