Pennsylvania Schedule W-2S - Wage Statement Summary Miscellaneous Compensation Instructions

PART A

Use Part A of this schedule to report your PA-taxable compensation from your Form(s) W-2.

You must submit a legible photocopy of the Form W-2 with a written explanation per the instructions for “When to Submit Form(s) W-2” beginning on Page 11. Please see the filing tips and cautions in the same section for additional information.

Otherwise, do not submit your Form(s) W-2. However, the Department has the statutory authority to require your actual Form(s) W-2.

PART B

Use Part B of this schedule to list all the sources of non- employee and other compensation as well as all distributions from eligible Pennsylvania retirement plans, all distributions from IRAs, all distributions from qualified deferred compensation plans, all distributions from annuities purchased from commercial insurance or mutual companies, all distributions from employee stock ownership plans (ESOP), all distributions from endowment contracts and all distributions from charitable gift annuities. Report your PA- taxable and nontaxable compensation and any PA tax withheld from that income. You must include Forms 1099-R, 1099-MISC, and other documents reporting the income shown on this schedule. Do not include Forms 1099-MISC for income reported elsewhere on PA Schedule C. Include PA taxable and nontaxable amounts from your Forms 1099 that show pensions, retirement plan distributions, executor fees, jury duty pay, and other miscellaneous compensation.

Column A. Taxpayer or Spouse - Enter a T if the payment or distribution was to the primary taxpayer shown first on the PA-40 or S if the payment or distribution was to the spouse.

Column B. Type - Enter the letter designation for the type of payment from the list of Payment Types shown at the bottom of the PA Schedule W-2S, Wage Statement Summary. If you do not know the type of payment listed on Form 1099-R, you may need to contact the payer for more information regarding the distribution to properly report the type of payment. For distributions from an IRA, the box next to Box 7 on the 1099-R will have an X entered to indicate a distribution from a traditional IRA, SEP IRA or SIMPLE IRA. Distributions from Roth IRAs will have either code J or T included in Box 7 of the 1099-R. Distributions from qualified deferred compensation plans should be listed on Forms W-2 or W-2P.

Column C. Payer name - Enter the payer’s name.

Column D. 1099-R code - If the payment being reported is from a Federal Form 1099-R, enter the distribution code listed in Box 7 of the 1099-R.

Column E. Total federal amount - Enter the total amount of the payment from a Federal Form 1099-MISC or from another document and/or any distribution from Federal Form 1099-R Box 1. If the payment is from a Federal Form 1099-MISC or from another document other than a 1099-R, enter the same amount in Column G.

Column F. Adjusted plan basis - If the distribution code in Column D is 1, 2, J, L, S or U from the 1099-R, enter the amount of the adjusted basis in the plan. The adjusted basis in the plan or IRA is generally equal to the sum of the contributions to the plan or IRA minus the sum of prior distributions which were previously treated as nontaxable as a recovery of such contributions.

Column G. PA compensation - If you entered a 1099-R code 1, 2, 8, 9, J, L, S or U from a 1099-R in Column D, subtract the amount in Column F from Column E and enter the resulting amount (but not less than zero) here. If you entered any other 1099-R code in Column D, enter a zero in Column G (you have no PA-taxable compensation from these codes). If the distribution code in Column D is a 7 and the payment type listed in Column B is K or L, these types of payments are not taxable as compensation, but are taxable as interest income to the extent there is income included in federal gross income. Although not taxable as compensation, they must be included to allow for reconciliation with amounts reported for federal income tax purposes. See the PA PIT Guide Chapter 7 and the instructions on Pages 12, 13, 14 and 15 for additional information regarding 1099-R codes and their taxability.

If you entered a payment from a 1099-MISC or from another document other than a 1099-R, enter the amount from Column E.

CAUTION: Although you may not have income taxable as compensation due to the code reported in Box 7 of the 1099-R, you may have taxable income from distributions reported on 1099-R Forms bearing code 6 or F which are reported on PA Schedule D. See the PA PIT Guide Chapter 12 and the instructions for PA Schedule D found on Pages 31 and 32 for additional information.

Column H. PA tax withheld - If the payer withheld PA state income tax from the distribution or payment to you, enter the amount withheld from that distribution or payment.

IMPORTANT: You must submit legible photocopies of the Form(s) 1099, Form(s) 1099-R and other statements showing the income that you listed in Part B. Do not submit copies of Form(s) 1099-MISC for income reported elsewhere on PA Schedule C.

FILING TIPS:

  1. A taxpayer with a distribution code 2 on Form(s) 1099-R must determine if he/she received the distribution from a pension or retirement plan eligible for PA tax purposes. Additionally, the taxpayer must have been eligible by meeting the age or service conditions of the plan. If these conditions are met, the taxpayer should input the same amount in Column F as was reported in Column E. Otherwise, the cost or adjusted basis of the plan must be included.
  2. A taxpayer with distribution code 1 or 2 on Form(s) 1099-R from a retirement plan from the State Employees’ Retirement System, the Pennsylvania School Employees’ Retirement System, the Pennsylvania Municipal Employees’ Retirement System or the U.S. Civil Service Commission Retirement Disability Plan should input the same amount in Column F as was reported in Column E.
  3. A taxpayer with a conversion of a traditional IRA to a Roth IRA with distribution code 1 in Box 7 of the 1099-R may be eligible to report the amount as nontaxable income when a direct transfer from trustee to trustee occurs and/or the when the entire distribution received is paid into the Roth IRA within 60 days of the date of the distribution. In such cases, input the same amount in Column F as reported in Column E. If the distribution is not a direct transfer from trustee to trustee, or the entire distribution is not paid into the Roth IRA, only the amount of taxpayer contributions into the traditional IRA should be reported as the adjusted basis and the cost recovery method should be used to determine if any of the distributions are taxable.
  4. A taxpayer with distributions from an annuity purchased from a commercial insurance or mutual company, an endowment contract or a charitable gift annuity having a distribution code 7 in Box 7 of the 1099-R must record the distributions on PA Schedule W-2S and also report the amount of income taxable for federal income tax purposes as PA-taxable interest income. When recording the distribution on PA Schedule W-2S, input the same amount in Column F as reported in Column E. Report the federal taxable amount of any annuities or endowments on Line 3 of PA Schedule A. Report the federal taxable amount of any charitable gift annuities on Line 4 of PA Schedule A.
  5. A taxpayer with a distribution from an Employee Stock Ownership Plan (ESOP) should enter the amount of the distribution in Column G if the stock in the ESOP has not been allocated to the participants. Use payment type H in Column B and the description “Non-Allocated ESOP Stock Dividend” in the space to describe the payment. If the stock has been allocated to the participants, input the same amount in Column F as reported in Column E. and enter payment type H in Column B and the description “Allocated ESOP Stock Dividend” to describe the payment. Allocated ESOP stock dividends are taxable as dividend income for PA purposes. Enter the name of the company and amount of the distribution on Line 1 of PA Schedule B.
  6. A taxpayer with distributions of excess contributions and earnings on the excess contributions (distribution code 8 in Box 7 of the 1099-R) must determine if the contributions being returned are from taxpayer contributions/ deferrals or employer contributions. In cases where the excess contributions being returned are taxpayer contributions/deferrals, only the amount of excess contributions should be entered in Column F. Earnings on the excess contributions should not be included in the adjusted basis of previously taxed contributions. In cases where the excess contributions and earnings being returned are employer contributions, no entry should be made in Column F. In either case, a letter from the employer/plan administrator is required to provide whether or not the contributions being returned are taxpayer contributions/deferrals and a breakdown between the excess contributions and the earnings on the excess contributions when the excess contributions and earnings are from employee contributions/deferrals.

Enter the total amounts from Part A and Part B for PA compensation and PA tax withheld on the PA-40 Lines 1a and 13, respectively.