That was a great question. I felt like doing some research on the web and here's what I came up with ... it's not a definitive answer so I still recommend that you consult a tax advisor.
401K question - My 401k contributions are taxed by the state i live in now. If I retire in a state that taxes withdrawals, will i get taxed again?
Yes. If you live in Pennsylvania, which does not recognize the tax deferred status of 401k contributions(they consider them part of your income), and you retire in North Carolina which does treat contributions as tax deferred: North Carolina will tax you on your withdrawals.
Thereâ€™s no requirement to retain your retirement plan statements or the records of contributions you have made to individual retirement accounts, but they are handy records of what you have saved and can expect to receive when you retire. Keep your quarterly summaries until you receive annual statements, then toss the quarterly statements if the annual summaries are correct. Remember, when you make a nondeductible contribution to an IRA account, your records document that you paid taxes at the time of the contribution, so you donâ€™t have to pay them later when you withdraw the money. You must report your nondeductible contribution to a traditional IRA on Form 8606 filed with your tax return. Keep a copy of each Form 8606 to keep track of your total basis.
PA law does not permit deductions or exemptions for
contributions to retirement plans, investments in annuities,
mutual funds, money market funds, and other personal
contributions, even when deducted or exempt for federal
purposes. Therefore, Pennsylvania will not tax your distributions
or the payments you receive until you have recovered
an amount equal to your previously taxed contributions.
Maintain your records of your contributions. If you
receive an early taxable distribution from a retirement plan,
and you do not have records of your contributions, consult
your plan administrator.