I live in PA and I have a pension and I am wondering why federal income taxes are taken off my pension? I have all ready been taxed prior to going on retirement, why is this occurring? Also, if federal taxes are to be taken off my pension how much or what percentage needs to be deducted to that I don't owe in (pay taxes) as I have to this year (2010-2011).

In general pension payments are considered to be income to you, and hence are taxable. However, if you conrtributed after-tax money to your pension plan while you were working, then the return of your contributions to you is not taxable, although payments to you that are out of company contributions, earnings, or any pre-tax contributions you made into the account are taxable, as you have not previously paid any taxes on those amounts. The statements you receive should clarify what portion of the payments are due to your own after-tax contributions and what portion is due to company contributions, earnings, and your pre-tax contributions.