Roth IRA conversion - State non-taxable

hi pros,

Taxpaye previously lived in PA for 20 years, recently retired and moved to CA permanently. In 2020, she converted 20k of IRA to Roth IRA. The distribution is taxable for both fed and CA.

She just informed that the IRA money was originally in a 403(B) duirng her workdays in PA. She told me that PA taxes 403(b) contributon. So she doesn't see the need to pay tax in CA.

Hmm...any PA accountant that can chime in on this? And if that's true, how do i exclude this in CA, attach a note to explain?

CA does not follow PA's rules. It's taxable in CA. She loses.
If she had moved from CA to PA I don't think it would be taxable in PA.

I did some research, per CA pub 1005 on retirement plans,

"Residents of California
Your IRA distribution is fully taxable if your IRA contributions
were fully deductible. If your IRA contributions were partially or
fully nondeductible, then the nondeductible contributions are not
taxed when they are distributed were made"

I think it's pretty clear that the distribution can be excluded for CA purpose.

That's an oversimplification for the sake of assisting in most situations. It's referring to contributions that were taxed at the federal level, not another state.