How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Bill Your Own Question
Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3153
Experience:  EA, CEBS - 35 years experience providing financial advice
Type Your Tax Question Here...
Bill is online now
A new question is answered every 9 seconds

I received a lump-sum payout from a SERP (non-qualified Supplementary

This answer was rated:

I received a lump-sum payout from a SERP (non-qualified Supplementary Pension Plan) in 2009.
The W2 I used (provided by Fidelity) showed no income for State purposes and that was my filing basis.
PA has challenged my filing and stating the payout is ordinary income which will attract PA taxes.
Can you advise how I best respond to PA Department of Revenue?

Assuming the plan does not consist of any elective deferrals that you made via salary deductions, then the lump sum will be subject to PA income taxes. If you made any elective deferrals to the plan then those amounts could be recovered tax-free.


You could attach a statement to your response explaining that you did not report the income as it was not properly reported on your W-2 and request that the late penalties be abated.


The links below explain PA's treatment of nonqualified deferred compensation:




See pages 7-52 through 7-55 of the PIT guide referenced in the link above.

Bill and other Tax Specialists are ready to help you