Pennsylvania Form Pa-40 Instructions
The state income tax rate for 2013 is 3.07 percent (0.0307).
Depending on your income and family size, you may qualifyfor a refund or reduction of your Pennsylvania income taxliability with the state's Tax Forgiveness program. Read theinstructions beginning on Page 33 to see if you qualify.
2013 STATE TAX CHANGES
What's New for 2013
Page 1 of the PA-40 has been revised to permit a survivingspouse to file a joint return with a deceased taxpayer. SeePage 7 of the instructions for additional information regardingthe changes to Filing Status instructions for a deceased taxpayer. Page 2 of the PA-40 has been revised to move the donation line for PA Breast Cancer Coalition's Refunds for Breast and Cervical Cancer Research Fund to Line 32. All other donation lines have been moved down one line on the form.
The Payment Options instructions within the PA-40IN havebeen revised to include instructions for using the department'sFill-In PA-V Form and to revise the instructions for taxpayerselecting to pay without the Fill-In PA-V. See Page 23 for information on where to obtain the Fill-In PA-V or how to make a payment without it. The instructions for Schedule SP havebeen revised as a result of joint filing being permitted for asurviving spouse and deceased taxpayer. See the instructionsbeginning on Page 33 for more information on the changes toUnmarried filing status, Married filing status, Deceased filingstatus and the Annualization of Income instructions, as well as new examples for when and what income must be annualizeddepending on the filing status chosen for the deceased taxpayerand surviving spouse.
PA Schedule OC has been revised to remove the Organ andBone Marrow Donation and PAAlternative Energy ProductionTax Credits, and to add the Historic Preservation Incentive Tax Credit and the Community-Based Services Tax Credit.
Padirectfile and Telefile have been replaced with PA Free File, a pair of electronic filing options that allow for simultaneousfiling of state and federal returns and reduce administrativecosts. See below for more information.
COMBAT ZONE AND HAZARDOUS DUTY SERVICE
Pennsylvanians serving in combat zones or qualified hazardousduty areas have the same additional time to file their stateincome tax returns and make payments as they have forfederal income tax purposes. The due date is automaticallyextended for 180 days from the last day of service or the lastday of continuous hospitalization for injuries incurred in oneof these areas. See Page 37 for more information.
ELECTRONIC FILING OPTIONS
E-filing offers advantages not available to taxpayers filing bypaper, including error-reducing automatic calculators; instantconfirmation of a successful filing; faster refund processingand direct deposit options.
Padirectfile and Telefile are being replaced with PA Free File, a pair of electronic filing options that allow for simultaneousfiling of state AND federal returns and save the departmentand taxpayers administrative costs.
PA Free File: see which free file option is right for you:
- Free File tax software, available online from reputable vendors, prepares state and federal filingsfor free for qualifying individualswith federal adjusted gross income of $58,000 or less forthe tax year.
- Free Fillable Forms are online versions of tax forms designed for people comfortable preparing their ownreturns. Fillable forms include basic math calculations and are generally available to all Pennsylvania taxpayersexcept nonresidents, part-year residents and those withK-1 forms or resident credits. Free Fillable Forms can be filed electronically for free or may be printed and mailedto the department. In addition, taxpayers who already filedfederal returns can use the fillable forms to file the PA-40 return electronically for free.
Fed-State E-File: Those who don't qualify for PA Free File taxsoftware but prefer electronically filing state and federal taxreturns using software available from reputable vendors cane-file for a fee.
Visit www.revenue.state.pa.us to explore all the e-filingoptions.
BENEFITS OF ELECTRONICALLY FILING YOUR RETURN
SAFE: Regardless of the option you choose, the departmentprotects your information with the latest security safeguards.
EASY: The systems perform math calculations for you.
FAST: The department processes refunds in half of the timecompared to a paper return.
DIRECT DEPOSIT: You can have your refund depositeddirectly into your checking or savings account. Direct depositis not available with a paper PA tax return.
CONFIRMATION: Upon filing electronically the departmentsends an acknowledgement directly to you, your tax professional or Electronic Return Originator (ERO).
REMEMBER: When you use one of the electronic filingoptions, do not mail a paper copy of your tax return; instead, keep it for your records.
You may need to submit other information such as copies ofmilitary orders (if on active duty outside Pennsylvania), FormsW-2 (if your employer withheld additional PA income tax), andtax returns you filed in other states (when requesting aPA Resident Credit). Read and follow the instructions. The department reserves the right to request an explanation orsupporting information for any amount that a taxpayer reportson a Pennsylvania tax return.
TAXPAYER SERVICES AND ASSISTANCE
Revenue e-Services Center
- Request an extension of time to file; make payments, including estimated payments; check the status of yourreturn and refund; update your address; calculatepenalty and interest; pay tax due by electronic funds withdrawal for PA personal income taxes; and find a link topay by credit/debit card.
Online Customer Service Center
- Find answers to commonly asked questions by usingthe department's Online Customer Service Center. Use the Find an Answer feature to search the database of commonly asked questions. If you do not find youranswer in this area, you can submit your question to acustomer service representative.
PA Personal Income Tax Guide (PA PIT Guide)
- The department's PA PIT Guide has information thatexplains Pennsylvania's income tax and its differencesfrom federal rules. You can only access the PA PIT Guideat the department's website. You can open specificchapters of the PA PIT Guide and use the search featuresof Adobe Acrobat Reader™ to find additional information on PA personal income tax rules. The department offersa link for free download of the Adobe Acrobat Reader™.
Taxpayer Service and Information Center
- Call 717-787-8201 for PA personal income tax helpduring normal business hours, 7:30 a.m. to 5 p.m.
Touch-tone service is required for this automated 24-hourtoll-free line. Call to order forms or check the status of a personal income tax account, corporation tax account or propertytax/rent rebate.
Harrisburg area residents may call 717-425-2533.
FORMS ORDERING SERVICES
To obtain forms not available in this booklet, visit a Revenue district office or use one of the following services:
Pennsylvania income tax forms, schedules, brochures, electronic filing options, and other information are available on the department's website. If you do not have Internet access, visit your local public library.
E-mail Requests for Forms: email@example.com
Automated 24-hour Forms Ordering Message Service:
- This line serves taxpayers without touch-tone telephone service.
PA DEPARTMENT OF REVENUE
TAX FORMS SERVICE UNIT
711 GIBSON BLVD
HARRISBURG PA 17104-3218
Services for Taxpayers with Special Hearing and/orSpeaking Needs: 1-800-447-3020 (TTY)
Free Income Tax Preparation Assistance
- You can receive free assistance in preparing uncomplicated, non-business federal, state, and local income tax returns through the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs. Visit the department's website, contact the department's nearest district office, or call the Internal Revenue Service's toll-free number (1-800-829-1040) for the location of assistance sites. Taxpayers with modest incomes and older residents are urged to take advantage of these services.
- Non-English-speaking taxpayers can receive assistance from the department through an interpretation service.
- El Departamento de lmpuestos puede ayudar los contribuyentes que no hablan inglés por medio de un servicio de traducción durante el periodo de pago de impuestos.
Federal Tax Assistance
- Federal tax account or technical information and problem solving are available by calling: 1-800-829-1040.
- Recorded Tele-Tax Service on federal tax topics or tax refund information is available by calling: 1-800-829-4477.
- Federal tax forms and publications are available by calling: 1-800-829-FORM (3676).
TAXPAYERS' RIGHTS ADVOCATE
The Pennsylvania Department of Revenue has a Taxpayers'Rights Advocate who assists taxpayers with PA personalincome tax and PA inheritance tax problems and concernsthat have not been resolved through normal administrativeprocedures. It is the Advocate's responsibility to ensure thatthe department provides equitable treatment with dignity andrespect. For more information concerning taxpayers' rights, visit the department's website at www.revenue.state.pa.us, or request the department's Taxpayers' Rights Advocatebrochure (REV-527) from one of the Forms Ordering Servicesabove.
To contact the Taxpayers' Rights Advocate:
- Send e-mail to: firstname.lastname@example.org
- Call: 717-772-9347
PA DEPARTMENT OF REVENUE
TAXPAYERS RIGHTS ADVOCATE
LOBBY STRAWBERRY SQUARE
PO BOX 280101
HARRISBURG PA 17128-0101
BEFORE YOU BEGIN
Filing Due Date
You must file before midnight, Tuesday, April 15, 2014. The U.S. Postal Service postmark date on your envelope is proofof timely filing. You must report all taxable income receivedor accrued from Jan. 1, 2013, through Dec. 31, 2013.
If you cannot file by the due date, request an extension oftime to file. Read the instructions on Page 38. If you do notfile your return by the due date, the department imposes latefiling penalties and interest charges.
Who Must File a PA Tax Return?
If you are a PA resident, nonresident or a part-year PAresident, you must file a 2013 PA tax return if:
- You received total PA gross taxable income in excess of$33 during 2013, even if no tax is due with your PAreturn; and/or
- You incurred a loss from any transaction as an individual, sole proprietor, partner in a partnership or PA S corporationshareholder.
Minors. PA law does not exempt a minor from the aboverequirements to file a PA tax return even if claimed as adependent on a federal return. A parent must file a return onbehalf of the minor child in such circumstances.
Decedents. The executor, administrator, or other personresponsible for the affairs of a decedent must file a PA taxreturn if the decedent met the above requirements.
Persons Not Required to File Federal Income TaxReturns. If you are not required to file a federal income taxreturn, you may still be required to file a PA personal incometax return because the requirements for filing a return inPennsylvania are different than federal requirements. Youmust file a return in Pennsylvania if any of the situationsdescribed above apply. See Chapter 4, "Who Must File a PATax Return" of the PA PIT Guide found on the department'swebsite, for more information.
REMINDERS FOR FILING YOUR 2013 PA-40
An acceptable return has not been filed until all schedulesrequired by the department have been filed. Failing toprovide required schedules may not only delay the processingof your return, but also subject you to late-filing penalties.
Assembling Your PA-40
Arrange your documents in the following order when submittingyour 2013 PA tax return:
- Original PA-40. Do not mail a photocopy of your PA-40or a copy of your electronic PA tax return.
- PA Schedule G-R. If you are claiming a resident creditfor taxes paid to other states or countries, you mustinclude this schedule immediately after the PA-40. DONOT include any extension forms, W-2 forms or anyother schedules or statements before this schedule when it is required. Otherwise, your credit may not be granted.
- PA Schedule W-2S, or photocopies of your Form(s) W-2(be sure the information is legible), or your actual Form(s) W-2. Use Part B of this schedule to list and total your othertaxable compensation. You must submit photocopies ofyour Form(s) 1099-R and other statements that showother compensation and any PA tax withheld. NOTE: Do not include copies of Form(s) 1099-DIV, and 1099-INT, unless the forms show PA income tax withheld.
- PA Schedule OC, and the required supporting documentswhen claiming any of the restricted tax credits that PAlaw allows.
- PA Schedule(s) RK-1, PA Schedule(s) NRK-1. If youdid not receive PA schedules, then submit federal Schedule( s) K-1. See Partnership, Limited Liability Companyand PA S Corporation Partners, Members and Shareholders on Page 14.
- All other required PA schedules and forms , including any additional sheets you prepared.
IMPORTANT: Please include your name(s), SocialSecurity number(s), tax year, and a brief line reference to the PA-40 or PA-40 schedule for any additional sheets youinclude with your return.
- All other required documents, including federalschedules (where the instructions allow the use of federalschedules), that explain the information you entered.
- Your PA Payment Voucher (Form PA-V) and payment. See Page 23 for instructions and payment.
IMPORTANT: Do not staple your check or money order to your Form PA-V or your PA-40 form. If you donot have a Form PA-V, see Page 23.
- Social Security Number(s). Carefully write your SSN, and your spouse's SSN ifmarried, in the boxes provided on your PA-40 form. Youmust enter your SSN, even if using your label. Pleasedouble-check your SSN.
- Rounding Numbers. On the PA-40 form and schedules, show money amountsin whole-dollars. Eliminate any amount less than $0.50and increase any amount that is $0.50 or more to thenext highest dollar.
- Your Address. Print your name and address on the form.
NOTE: If you are using a military address, please use yourAPO or FPO address.
Foreign Address Instructions
If you live outside of the U.S., it is important that you writeyour foreign address on your PA-40 according to U.S. PostalService standards. Failure to use these standards may delayany refunds you request or correspondence necessary tocomplete the processing of your return. To comply with theforeign address standards, use the following rules whencompleting the address portion of your PA-40 form: write your name(s) in the spaces provided; write the house numberwith street, apartment number and street or postal deliverylocation in the spaces provided for the First Line of Addresson your PA-40 form; write the name of the city, city andprovince, and/or foreign postal number (ZIP code equivalent) in the spaces provided for the Second Line of Address onyour PA-40 form; write only the name of the country in thespaces provided for the City or Post Office on your PA-40form; and DO NOT include any entries in the state or ZIPcode spaces on your PA-40 form. To the right are two examples of properly completed foreign addresses as provided bythe U.S. Postal Service. Providing your address in this formatwill better ensure that the department is able to contact youin the event we need additional information, or to send youyour refund on a timely basis.
By law (42 U.S.C. §405(c)(2)(C)(i); 61 Pa. Code §117.16), the Pennsylvania Department of Revenue has the authorityto use the SSN to administer the Pennsylvania personalincome tax and other Commonwealth of Pennsylvania taxlaws. The department uses the SSN to identify individualtaxpayers and verify their incomes. The department alsouses the SSN to administer tax-offset and child-supportprograms required by federal and Pennsylvania laws. Thecommonwealth may also use the SSN in exchange-of-taxinformation agreements with governmental authorities. Pennsylvania law prohibits the commonwealth from disclosinginformation that individuals provide on income tax returns, including the SSNs, except for official purposes.
WHEN ENTERING INFORMATION
- Print in black ink
- Use UPPER CASE (CAPITAL) letters
- Print one number or letter in each box
- Leave a blank box between whole words
- Print your name - last, first, middle initial, and suffix on the correct lines
- Print your correct street address
- Print your apartment number, suite number, room number, rural route, floor, etc. on the first line
- Print your PO Box on the second line
- Fill in all appropriate ovals completely
- Prepare a copy before submitting your return
- Use red pen or pencil
- Use lower case letters or script
- Leave a blank box or use a punctuation mark if your name, address, or city has Mc, Van, O, etc.
- Use dashes or other punctuation in boxes
- Print a PO number if the post office delivers to your home
- Use a PO Box on any line of your address except the line directly above your city and state
- Use an X or check mark (!) in an oval
- Erase or use correction fluid
PA-40 Tax Form
If you do not electronically file your tax return, use the PA-40form. Please read the instructions.
Keep Your Records
The department has the statutory authority to verify andaudit all of the amounts you report on your return andaccompanying schedules. Maintain your books and records forat least four years after filing, as evidence of the informationyou reported on your PA return. Basis documentation for anyitem reported or potentially reportable on current or futuretax returns must be kept indefinitely or until such time as theasset is sold, exchanged or disposed of by a taxpayer. Forexample, books and records used to calculate basis forretirement plans, stocks, bonds, mutual funds, businessassets, business interests, tuition account programs, principalresidence, etc. must be kept indefinitely.
Daytime Telephone Number
Enter the area code and telephone number where thedepartment can call you between 8:30 a.m. and 4 p.m.
School Code and School District Name
You must enter the five-digit code and name of the schooldistrict where you lived on Dec. 31, 2013, even if you movedafter Dec. 31, 2013. Do not enter the school district where you work. Using an incorrect code may affect your school district's funding. The lists of school district names and codesare on Pages 42 and 43. NOTE: If you do not know the nameof the school district where you resided on Dec. 31, 2013, you can obtain this information from the Online CustomerService Center at www.revenue.state.pa.us .
Some examples of what to consider when entering the schooldistrict code on a return are as follows:
- Military personnel should use the school district code forthe domicile of their spouse (if the spouse lives inPennsylvania), their parents (if entering the militarywhile they are domiciled in Pennsylvania), or the codefor the school district in which they live while on federalactive military duty while stationed in Pennsylvania (if aPA resident).
- Persons residing in a nursing home or other care facilitywho are planning to return to their principal residenceafter a temporary stay in such facilities should enter theschool district code for the physical address of their principal residence and not the nursing home or care facility.
- Persons who reside in a nursing home or care facilityon a permanent basis and have made the decision to doso (who are or were mentally capable of making thisdecision) should use the school district code for thephysical address of the nursing home or care facility.
- The residence of a person in a nursing home, long-termcare facility or similar facility is presumed to be theperson's residence prior to becoming a patient in thehome or facility, unless there is substantial evidence thatthe person is legally competent and does not intend toreturn to his/her previous home.
- PA residents who are students attending college insideor outside of Pennsylvania should use the school districtcode for the physical address of the domicile or principalresidence of their parents.
- Nonresidents or part-year residents who did not residein the state as of Dec. 31, 2013, should enter 99999 in the school district code field.
- Part-year residents who resided in Pennsylvania as ofDec. 31, 2013, should enter the school district code of the physical address of their domicile or principal residence.
- Persons who use a mailing address other than thephysical address of the domicile or principal residenceshould enter the school district code for the physicaladdress of their domicile or principal residence.
- Persons who work outside of Pennsylvania, but maintaina permanent place of abode inside Pennsylvania duringtheir absence from Pennsylvania or persons who plan toreturn to Pennsylvania after a temporary relocation toanother state or country who are still considered PAresidents should use the school district code for the physical address of their permanent place of abode orthe school district code of their physical address prior tomoving out of Pennsylvania.
Extension of Time to File Your 2013 Tax Return
Fill in this oval if you have an extension to file your 2013PA income tax return. Read the instructions on Page 38.
Fill in this oval only when you are amending your 2013 PA taxreturn. Please read the instructions beginning on Page 38.
- (R) Resident. If you were a resident of Pennsylvania for all of 2013, fill inthis oval. You must report all income (losses) regardlessof the source from which you earned, received, or realizedthe income (loss).
Nonresidents and Part-Year Residents
Please read the instructions on Page 39. Nonresidents andpart-year residents use the same PA-40 form as PA residents.
- (N) Nonresident. If you were a nonresident of Pennsylvania for all of 2013, fill in this oval. PA law taxes nonresidents on the income earned, received, or realized from Pennsylvania sourcesduring 2013. See Page 39 of the instructions for moreinformation.
- (P) Part-Year Resident. If you moved into Pennsylvania during 2013, fill in thisoval even though you were a PA resident at the end of2013. If you moved from Pennsylvania during 2013, fillin this oval even though you were not a PA resident atthe end of 2013.
PA law taxes part-year residents on all income from all sources while a PA resident, and all income (loss) earned, received, and realized from PA sources when not a resident of Pennsylvania. See Page 39 of theinstructions for more information.
See Chapter 4, "Who Must File a PA Tax Return," of thePA PIT Guide found on the department's website for moreinformation. You may also request the DeterminingResidency for PA Personal Income Tax Purposesbrochure (REV-611) from the department's website, orone of the Forms Ordering Services on Page 2.
If you are a PA resident college student attending schooloutside Pennsylvania or a nonresident college studentattending school within Pennsylvania, request the brochurePA Personal Income Taxes for College Students (REV-758) for more information.
Fill in the oval that describes your status on Dec. 31, 2013. You do not have to file a PA tax return if you do not individuallymeet the requirements described under Who Must File a PA Tax Return? on Page 4. If you do not live in Pennsylvania anddo not have any income (loss) from PA sources, you do nothave to file a PA tax return, even if married to someone who must file a PA tax return. If you are a PA resident who doesnot have any PA income (loss) to report, you do not have tofile a PA tax return, even if married to a person who must filea PA tax return.
You must file as single if on Dec. 31, 2013:
- You were not married; or
- During 2013, you divorced or became a widow orwidower, did not remarry and/or could not or did not electto file a joint return with a deceased spouse.
(J) Married, Filing Jointly
You and your spouse, even if living apart or one of you isdeceased, can file a joint return for convenience. The executor( s) of the estate(s) of the taxpayer and spouse may also electto file jointly. To file jointly, you must meet ALL of the following conditions:
- Your taxable years end on the same date (not includingreturns with a deceased taxpayer and/or spouse); and
- You and your spouse elect to have the same residencyperiod (earliest starting date if you moved intoPennsylvania and latest ending date if you moved out ofPennsylvania) if you are part-year residents; and
- Neither of you is individually claiming one or more of thecredits on PA Schedule OC, (see Page 20); and
- Your deceased spouse's estate has not elected to file a separate return on his or her behalf; and
- Neither of you is individually liable for the payment ofchild or spousal support, or another liability to the PADepartment of Public Welfare.
FILING TIP: If you and your spouse made separate estimated payments, you should file separate taxreturns, each claiming only your own payments. If you andyour spouse made your estimated payments jointly, youshould file a joint tax return. However, if you and your spousemade estimated payments jointly and because of PA guidelines you must file separate tax returns, you must allocatethe payments by completing Form REV-459B, Consent toTransfer, Adjust or Correct PA Estimated Personal IncomeTax Account. The form must be completed in its entirety, showing the total number of payments made for the year andthe amount of the payments to be transferred to the spouse.
Both individuals must sign the form. This form can be sent tothe address shown on the form prior to filing the return or acopy of the form can be submitted with both returns whenfiling. This avoids processing delays and correspondencefrom the department.
Joint Income - Joint Returns
Married taxpayers can file a joint tax return for convenienceonly. If you and your spouse jointly own income-producingproperty, you must each report your share of the income(loss). Income-producing property includes savings accounts, businesses, securities, and real estate. Spouses usuallyequally divide income from jointly owned property.
CAUTION: On a joint return, you and your spouse are eachseparately liable for the entire amount of PA tax due, even ifonly one of you had taxable income, and even if one of youpaid your own PA tax through withholding or estimatedpayments. The income and losses of a taxpayer and spousemust be determined separately. You may not offset theincome of the taxpayer with a loss from the spouse and vice versa. See REPORTING NET INCOME, GAINS, AND LOSSES ON LINES 4, 5, AND 6 beginning on Page 14 andthe requirements for the schedules reporting the income andlosses for each class of income for additional information and reporting requirements.
(M) Married, Filing Separately
You and your spouse have the option to file separate returns. However, you and your spouse must file separate returns if:
- Your taxable years end on different dates; or
- Your taxable years begin on different dates for part-yearresidents; or
- Either of you is claiming one or more of the credits on PASchedule OC; or
- Either of you is individually liable for the payment ofspousal/child support, or another liability to the PADepartment of Public Welfare; or
- One of you is a PA resident and the other is not. However, you can file jointly if you both elect to file as PAresidents and meet all other requirements for filing jointly. See Married, Filing Jointly on the previous page.
(F) Final Return
Use this filing status if you lived in Pennsylvania during 2013, but permanently moved away or if for any other reason, youwill not have any PA-taxable income (or loss) in 2014. Providethe reason, such as you moved to another state.
REMEMBER: Even after you move from Pennsylvania, youmust report any PA-taxable income you earned, received, orrealized from PA sources.
Use this status if the taxpayer, spouse or both died in 2013. Enter the date(s) of death.
For tax years beginning on or after Jan. 1, 2013, a joint returncan be filed by the surviving spouse and decedent when aspouse or taxpayer dies during the tax year if:
- The decedent did not previously file a return for the taxyear; and
- The personal representative, executor or administrator hasnot been appointed by the time the return is made, signedand filed; or
- The fiduciary of the decedent consents to the filing of andsigns the joint return.
Also for tax years beginning on or after Jan. 1, 2013, the executor( s) of the estate(s) of the taxpayer and spouse (if both dieduring the same tax year) may elect to file a joint return onbehalf of the taxpayer and spouse if:
- The personal representatives, executors or administratorsconsent to filing a joint return; and
- The joint return is signed by both fiduciaries.
A surviving spouse must file a separate return if the fiduciary ofthe estate does not agree to a joint return or if a fiduciary of thedecedent is appointed after the filing of the joint return and thefiduciary supersedes the joint return filing by filing a separatereturn on behalf of the decedent. In cases where a joint returnhas already been filed by the spouse and a fiduciary has beenappointed who wants to file a separate return on behalf of thedecedent, a separate return for the surviving spouse must befiled within 90 days of the filing of the decedent's separate returnby the fiduciary. If the surviving spouse's separate return is filedwithin 90 days, the separate return shall be considered to befiled on the date the original joint return was filed. Otherwise, the surviving spouse's return shall be considered to be filed onthe date the department receives it.
- If a joint return is filed and the taxpayer, spouse or bothare deceased, complete the married filing joint oval, thedeceased oval and the spouse and/or taxpayer ovals aswell as the date(s) of death. The surviving spouse shouldcomplete the name and Social Security number section ofthe return as the primary taxpayer on the return.
- If a separate return must be filed by the surviving spouseand a joint return was not previously filed, the survivingspouse's filing status should be single and no informationshould be included in the deceased filing status area.
- If a separate return must be filed by the surviving spouseafter having filed a joint return, the surviving spouse shouldalso complete the amended return oval and include SchedulePA-40X.
- If a separate return is filed by the decedent's fiduciary, thefiduciary should complete the deceased and taxpayer ovalsand include the date of death.
- If both taxpayers die during the tax year and the fiduciariesdo not elect to file a joint return, complete the taxpayerdeceased oval and include the date of death on the separatereturns for each.
- If a decedent was not married when he or she died, the fiduciary should complete the deceased taxpayer oval andinclude the date of death.
CAUTION: Do not list the deceased taxpayer's name and Social Security number as the primary taxpayer unless both thetaxpayer and spouse die during the tax year and a joint returnis filed on their behalf.
The executor, or other person responsible for the affairs ofthe decedent should also use this filing status to complete, sign, and file a separate return for the decedent. The returnmust report all the decedent's 2013 income, payments, and credits. The person signing the decedent's return mustindicate his or her relationship to the decedent (executoror person responsible for the affairs of the decedent).
If the decedent was married, the surviving spouse may berequired to file a separate return, and use the Single (S) filingstatus. If the decedent made PA estimated payments, the surviving spouse may request Form REV-459B to reconcilethe estimated payments to the separate PA tax returns. Request this form from the department's website, or one ofthe Forms Ordering Services on Page 2.
Fill in this oval if you derived at least two-thirds of your 2013gross income from farming.
PA INCOME CLASSES
You must report your income (loss) by applicable class, whether it is received directly, through an estate or trust or asa distributive share of the income of a partnership or PA Scorporation. Read the instructions for each income class.
Line 1. Compensation - Page 9
Line 2. Interest - Page 13
Line 3. Dividends and Capital Gains Distributions - Page 13
Line 4. Net Income or Loss from the Operation of a Business, Profession, or Farm - Page 15
Line 5. Net Gain or Loss from the Sale, Exchange, orDisposition of Property - Page 15
Line 6. Net Income or Loss from Rents, Royalties, Patents, or Copyrights - Page 16
Line 7. Estate or Trust Income - Page 17
Line 8. Gambling and Lottery Winnings - Page 18
Federal income classifications are disregarded to the extent they are inconsistent with PA classifications.
FILING TIP: Generally, other or miscellaneous income is either compensation on Line 1a, (see Page 9), orbusiness income on Line 4, (see Page 15). If you cannotdetermine the income class, contact the department forassistance.
TAXABLE INCOME FOR PA PIT PURPOSES:
The PA-40 line number on which to report the income followseach item. Classify means report the income in the appropriatePA income class based on all facts and circumstances. See PA PIT Guide for more information.
- Employer provided fringe benefits, unless excludable(Line 1a)
- Sick pay and disability benefits that represent regularwages, such as sick leave pay (Line 1a)
- Allowances and reimbursements in excess of allowable employee business expenses (Line 1a)
- The value of property received as payment for services(Line 1a)
- Delay damages received in connection with a courtjudgment or settlement to the extent that the paymentsrepresent back wages (Line 1a)
- Honoraria (Line 1a)
- Compensation as fees for performing services as anexecutor or an administrator of an estate or a director of a corporation (Line 1a)
- Severance pay (Line 1a)
- Incentive payments received for terminating employmentbefore reaching normal retirement age (Line 1a)
- Awards and gifts given in recognition for, or given as atransfer of cash or property, in payment for past, present, or future service as an inducement to perform futureservices (Line 1a)
- Jury fees (Line 1a)
- Expert witness fees (Line 1a)
- Cash reimbursements for personal expenses, such ascommuting and day care (Line 1a)
- A discharge of indebtedness, unless specifically excludable from taxable income (Classify)
- Damage awards and settlements to the extent that thepayments represent back wages or another uncollectedentitlement to PA-taxable income (Classify)
- Covenants not to compete, or for refraining from theperformance of services (Classify)
- Other income described in the PA income classes (Classify)
- Income for performing services as an executor or directorwhen such services are undertaken as part of yourbusiness or profession (Line 4)
INCOME NOT TAXABLE FOR PA PIT PURPOSES:
- Social Security benefits and/or Railroad Retirementbenefits
- Commonly recognized pension, old age, or retirementbenefits paid after becoming eligible to retire, and retiring
- United Mine Workers Pension
- Military pension benefits
- Civil Service Annuity
- Unemployment compensation and public assistance
- Payments received under federal trade assistance, tradeadjustment allowances and alternative adjustmentassistance.
- Payments received under workers' compensation acts, occupational disease acts, or similar legislation; includingHeart and Lung Pension
- Payments for injuries received while working, anddamages received, whether by suit or otherwise, forpersonal injuries
- Sick pay and disability benefits, including payments bythird party insurers for sickness or disability (does notinclude amounts paid as sick leave)
NOTE: If your employer includes your payments forsickness, disability, and/or on-the-job injuries in Box 16of your Form W-2, provide a statement from youremployer verifying the amount of these payments.
- Employer-paid group term life insurance premiums
- Damage awards and settlements from physical injury orsickness such as pain and suffering or emotional distress
- Child support
- Inheritances, death benefits, and income in respect of adecedent (IRD) as defined for federal income tax purposes
- Active-duty pay received as a member of the U.S. ArmedForces from the U.S. government for service outsidePennsylvania (see Page 37)
- Awards and gifts made from detached or disinterestedgenerosity
- Personal use of an employer's owned or leased propertyand/or services, at no cost or at a reduced cost
- Federally taxable punitive damages received for personalphysical injury or physical sickness, whether received bysuit or by settlement
- Income from contracts of insurance for long-term carethat do not have accumulated refundable reserves payable upon lapse or surrender
- Interest earned from an IRC Section 529 plan like the Pennsylvania 529 College Savings Program when earned orused for Qualified Higher Education Expenses as definedby IRC Section 529 (e)(3)(A).
DIFFERENCES BETWEEN PA PIT AND IRS
For more information on differences between Pennsylvania andthe IRS, refer to the PA PIT Guide and the specific chaptersrelated to the income class for which you have a question. The differences described below are the result of recent Pennsylvania and federal legislation.
Other Federal Legislation . Federal legislation signed into law in 2013 - including theAmerican Taxpayer Relief Act - contained no provisionsapplicable for or that may be used in calculating PA personalincome tax liabilities. Any provisions provided in the aforementioned act to defer income or accelerate deductions must be reversed for PA personal income tax purposes.
Depreciation - PA Limitations .
- Bonus Depreciation. PA PIT law does not follow the federal allowances for additional depreciation expenses. You may not use anyof the bonus depreciation elections enacted for federal purposes.
- ACRS and MACRS and IRC Section 179. Pennsylvania allows ACRS and MACRS and limited IRCSection 179 to the extent allowable under the version of the Internal Revenue Code in effect at the time the property was placed in service, or under Section 179 of the IRC of1986, as amended to Jan. 1, 1997, whichever is earlier, but not any other accelerated method. 72 PS § 7303(a.3)(Act 89 of 2002.)
- Limited IRC Section 179. The maximum deduction that PA income tax law permits using IRC Section 179 is $25,000. If you haveincome (loss) from more than one business, profession, orfarm, you may not deduct more than a total of $25,000of IRC Section 179 expenses for all activities. The PASection 179 expense is phased out for purchases inexcess of $200,000. For more information regarding what PA Section 179 expenses are allowed or allowable, please see InformationalNotice PIT 2012-05 on the department's website at www.revenue.state.pa.us .
- Other Differences. You must adjust your federal expense for the differencebetween your federal depreciation and your depreciationfor PA PIT purposes, when you elect a different generallyaccepted method that you consistently use.
IMPORTANT: The basis for property (where bonusdepreciation or IRC Section 179 in excess of$25,000 has been taken for federal income tax purposes) will be different for federal and state tax purposes. As a result, PA law requires straight-line depreciation to betaken on these assets.
PA-40 LINE INSTRUCTIONS
PA law does not allow standard deductions, deductions for personal exemptions, itemized deductions or deductions forpersonal expenses.
CAUTION: PA-taxable interest income (Line 2), dividend income (Line 3) and gambling and lottery winnings (Line 8) are gross taxable income classes. You may not deduct any expenses in computing these classes of income. In computing compensation, only certain expenses are deductible; see the special instructions beginning on Page 26. The remainingclasses of income are net taxable - you may deduct ordinary and necessary expenses paid or accrued during the taxable year in their production. See the line instructions for eachclass of income.
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 thepayments you receive until you have recovered an amount equal to your contributions. Maintain your records of your contributions. If you receive an early taxable distribution froma retirement plan, and you do not have records of your contributions, consult your plan administrator.
Education Savings Accounts - Qualified Tuition Programs under IRC Section 529, like Pennsylvania 529 College Savings Program
Contributions to a Pennsylvania 529 College Savings Program account and other IRC Section 529-qualified tuition program accounts are deductible. For additional information, see the instructions for Line 10, Other Deductions, on Page 18 and the instructions for PA Schedule O, Other Deductions, on Page 33.
NOTE: Certain withdrawals and distributions not used for educational purposes are taxable. See the instructions for PA Schedule A on Page 29 for additional information.
LINE 1a. GROSS COMPENSATION
Overview: PA-taxable compensation includes, but is not limited to: salaries; wages; tips; gratuities; commissions; bonuses; incentive payments; vacation and holiday pay; employer student loan payments; student loan debt forgiveness for entering certain fields or professions; distributionsfrom nonqualified deferred compensation plans; certain early distributions from retirement plans; and termination pay. Theamount your employer reports in Box 16 of your Form W-2shows your PA-taxable compensation. If you receive Forms1099 or other statements, your PA-taxable compensation is the gross amount that you received for performing services.
The amount in Box 16 of your Form W-2 may be different from the amount in Box 1. PA law requires your employer to follow PA income tax rules to determine Box 16. If you have any questions, contact your employer.
Form W-2 Wage and Tax Statement:
When reporting PA-taxable compensation, you may or may not have to submit Form(s) W-2 with your tax return. If you do not have to submit your Form(s) W-2 as shown below in When to Submit Form(s) W-2, you have these options:
- Complete PA Schedule W-2S, Summary of PA-TaxableEmployee, Miscellaneous, and Non-employeeCompensation. See the instructions on Page 24 andWhen to Submit Form(s) W-2 below; or
- Submit photocopies of your state copy of each Form W-2on 8-1/2 X 11-inch paper. You may photocopy more thanone Form W-2 on each sheet, but the form must be legible; or
- Submit your actual state copy of Form(s) W-2.
Report your PA compensation and withholding from each2013 Form W-2 from each employer. Enter your PA-taxablecompensation from Box 16 of your 2013 Form(s) W-2. Donot use Box 1, Federal Wages. Report your PA income taxwithheld from Box 17 of each Form W-2 on Line 13 of yourPA-40. Do not report federal income tax withheld, or incometax withheld or paid to another state or country, or income taxwithheld and paid to any local tax authority.
When to Submit Form(s) W-2:
Submit an actual state copy or a legible photocopy of eachstate copy of Form W-2 (keep the original for your records) and a written explanation if:
- The PA compensation you enter on Line 1a of your PA-40is not the same as Box 16 on your Form W-2 (you believethat the PA compensation or withholding is incorrect).
- Your employer gave you a handwritten Form W-2.
- Your employer reported an incorrect amount on yourForm W-2. You must also submit a written statement from your employer.
- Your employer withheld PA income tax from your wages ata rate that is more than the 2013 tax rate of 3.07 percent.
- You are a resident of a reciprocal compensation agreement state and your employer withheld PA income tax.
- The Medicare wages in Box 5 on your Form W-2 aregreater than your PA wages in Box 16. In this case, complete and include with your return the PA-40 W-2Reconciliation Worksheet. To obtain the worksheet, use one of the Forms Ordering Services on Page 2.
- You are a PA resident working in another state orcountry and did not have PA income tax withheld by youremployer.
- You have a distribution from a nonqualified deferredcompensation plan included in Box 1 of your Form W-2.
- Your Form W-2 shows income earned or tax withheld for another state.
NOTE: If you do not have a Form W-2 or a federal substituteW-2, Form 4852, you must submit evidence of your PAcompensation and tax withheld by providing pay stubs and astatement identifying your employer and the reason you donot have a Form W-2. Please submit legible photocopies. Keep your original documents.
- Complete and submit a PA Schedule W-2S unless theoriginal Form W-2 is required to be included with yourreturn as described above.
- Some original Form W-2 documents cannot be processed by the department's imaging equipment (onionskin paper printed in blue ink, for example) and coulddelay the processing of a return. If possible, submit aphotocopy of the Form W-2 on standard size paperinstead of the actual Form W-2.
- If the PA-taxable wages you are reporting are less than the amount reported on your Form W-2, please include a brief explanation of the difference with your return and/or a letter from your employer documenting the difference in taxable amounts.
- If your employer withholds excess PA personal income tax at your request, include with your return a statement from your employer verifying the rate and amount of tax withheld for the tax year.
- If you worked outside of Pennsylvania and your employer did not withhold PA personal income tax, your PA wages may be higher or lower than the state wages reported on your Form W-2 in Box 16. Amounts paid to you as retirement plan contributions, personal use of company automobile and/or group term life insurance may require additional adjustments to the amount reported to the other state or country. See the PIT Guide, Chapter 7 for additional information.
CAUTION: If you receive distributions of previously taxed contributions from a nonqualified deferred compensation plan, you should complete and include with your return the PA-40 W-2 Reconciliation Worksheet. To obtain the worksheet, use one of the Forms Ordering Services on Page 2.
Reciprocal Compensation Agreement States:
Pennsylvania has agreements with Indiana, Maryland, New Jersey, Ohio, Virginia, and West Virginia. Generally, under these agreements, one state will not tax a resident of the other state on compensation that is subject to employer withholding. These agreements apply to most types of W-2 compensation earned while a resident of the reciprocal compensation agreement state. It does not apply to miscellaneous and non-employee compensation, compensation earned while a PA resident and received while a resident of the reciprocal compensation agreement state or compensation paid to Ohio resident shareholder-employees with a 20 percent or greater interest in a PA S corporation who worked or performed services in Pennsylvania in 2013.
If you are a PA resident working in one of these states, and your employer withheld the other state's income tax, you must file for a refund from that state.
FILING TIP: File early so you will have your refund before the due date for paying your PA tax liability.
IMPORTANT: If you earn at least $8,000 in the other state, and your employer doesn't withhold PA income tax, under PA law you may have to make estimated payments. Please read the information on Page 37. If this is your situation, you are liable for Estimated Underpayment Penalty. See the instructions for Line 27 on Page 21.
Resident of a Reciprocal State Filing for a Refund:
If you are a resident of a reciprocal state working in Pennsylvania and your employer withheld PA income tax, you may request a refund of the PA tax. You report zero taxable compensation on Line 1a, and the PA tax withheld on Line 13. You must submit a legible photocopy of your Form W-2, a copy of the resident income tax return that you filed with your resident state (without the supporting forms and schedules), and a statement explaining that you are a resident of a reciprocal state.
Reimbursable Expenses/Cash Reimbursements forPersonal Employee Expenses:
PA-allowable employee expenses are not always the same asallowable federal business expenses. Read the instructionsbeginning on Page 26. You must be able to substantiatetravel expenses as to time, place and business purpose.
Report all reimbursements and allowances paid by youremployer as compensation unless you meet all three of thefollowing requirements:
- The expenses are PA-allowable employee businessexpenses; and
- You must, and do, account for these expenses to youremployer; and
- Your employer reimburses you in the exact amount of the allowable business expenses.
If you receive a fixed-mileage allowance or a per diem livingexpense allowance that does not exceed applicable federallimits, you meet these requirements. Do not report theseexpenses on PA Schedule UE.
Retirement, Pensions, and Deferred Compensation
- Eligible Employer-Sponsored Retirement Plans. Pennsylvania does not impose income tax on paymentsyou receive that are commonly recognized retirementbenefits distributed from eligible employer-sponsoredretirement plans. Eligible employer-sponsored retirementplans can, but do not necessarily, include employer- sponsored deferred compensation plans; pension orprofit sharing plans; 401(k) plans; thrift plans; thrift savingsplans; and employee welfare plans. Ask your employeror plan administrator if your employer's retirement planis an eligible plan for PA income tax purposes. Eligiblenon-employer-sponsored retirement plans can, but donot necessarily, include Individual Retirement Accounts(IRAs) and Roth IRAs.
- Contributions. The contributions you make to your employer's sponsoredretirement plan are PA-taxable compensation, even ifyour contributions are not taxable for federal purposes orincluded in the state wages shown on your W-2.
Distributions from Employer-Sponsored QualifiedRetirement or Deferred Compensation Programs.
All amounts you receive from your employer's PA qualifying retirement or old age benefit plan are taxablein the year you receive the payments, except:
- Payments you receive after you qualify for retirementand retire.
- Payments you receive that you rollover into anotherdeferred payment program or retirement IRA, but onlywhen the transferred amounts are not taxable income for federal purposes.
- Distributions from an employer-sponsored deferredcompensation plan that represent your previouscontributions.
- Payments paid to the estate or designated beneficiaryupon an employee's death are not PA-taxable incomeon the employee's final PA-40 or on the decedent'sestate or trust PA-41, PA Fiduciary Income Tax Returnor on the beneficiary's PA-40.
- All distributions (regardless of the distribution codereported in Box 7 of the 1099-R) from the State Employees' Retirement System, the Pennsylvania School Employees' Retirement System, the Pennsylvania Municipal Employees' Retirement System, and the U.S. Civil Service Commission Retirement Disability Plan.
- Retired or retainer pay of a member or former member of a uniform service computed under Chapter 71 of Title 10, U.S. Code as amended.
Individual Retirement Accounts
- Contributions. PA law does not allow you to deduct your contributions to any IRA.
- Undistributed Income. You do not report the undistributed interest and other earnings on the assets held in your IRA.
Distributions from an IRA, including a federal Roth IRA, are taxable to the extent the distribution exceeds your previous contributions. Distributions you receive after retiring but before age 591/2 are taxable even if you receive substantially equal payments, and you do not pay the federal penalty for an early withdrawal. PA law does not have any exceptions similar to the federal exceptions for withdrawal before age 591/2. However, distributions from an IRA are not taxable if the payments are:
- Received, including lump sum distributions, on or after reaching the age of 591/2.
- Paid to the estate, or designated beneficiary, of the participant because of the participant's death.
Traditional IRA Rollover.
You do not have to pay PA tax on the difference between the amount distributed from your traditional IRA and your previous contributions:
- If you rolled over the entire withdrawal directly (trustee to trustee) from one traditional IRA to another traditional IRA, or
- If you withdrew from the traditional IRA and within 60 days invested the entire (100 percent) amount you received into another traditional IRA.
Roth IRA Rollover.
You do not have to pay PA tax on the difference between the amount distributed from your traditional IRA and your previous contributions:
- If you rolled over the entire withdrawal directly (trustee to trustee) from the traditional IRA to the Roth IRA, or
- If you withdrew from the traditional IRA and within 60 days invested the entire (100 percent) amount you received into a Roth IRA.
CAUTION: If federal tax is withheld from a rollover distribution, the amount of federal tax withheld must also be reimbursed into the new IRA account in order for the rollover to be considered nontaxable for PA PIT purposes. See Filing Tips on Page 25 for additional information.
IMPORTANT: For detailed information on Pennsylvania taxation of distributions from IRAs, please review Tax Bulletin 2008-01 on the department's website, www.revenue.state.pa.us .
Early Retirement Incentive Plans:
Payments you receive as an inducement to retire early aretaxable compensation. Such payments are not part of a PA- qualifying retirement program. Your employer includes theseincentive payments on your Form W-2 and withholds PA tax. Even when you move out of Pennsylvania, these incentivepayments remain taxable to Pennsylvania.
If you withdrew from your retirement or pension plan, andreceived a Form 1099-R, you may have PA-taxablecompensation if:
- Your retirement plan is not an eligible Pennsylvaniaretirement plan; or
- If you have not reached the retirement age or yearsof service requirements under such eligiblePennsylvania retirement plan.
Non-Qualified Deferred Compensation Programs:
With certain exceptions, Pennsylvania's constructive receiptrules are the same as the federal constructive receipt rulesto determine when compensation is received by a cash basistaxpayer. Following the federal constructive receipt rule, deferrals to nonqualified deferred compensation plans are notincluded in compensation. However, compensation includesdistributions from nonqualified deferred compensation plansattributable to an elective deferral of income, regardless ofwhether the distributions are paid during employment orretirement. Also, distributions of previously taxed contributions are not taxable. If you receive distributions of previouslytaxed contributions, complete and include with your return thePA-40 W-2 Reconciliation Worksheet. To obtain the worksheet, use one of the Forms Ordering Services on Page 2.
Federal Form 1099-R (Qualified Plans and IRAs):
The PA PIT Guide contains a table which cross-references the information on the Form 1099-R with its correspondingPA income tax treatment. PA law does not follow federal law concerning early retirement options for Individual RetirementAccounts, IRC Section 401 plans, 403 plans, and otherfederally qualified plans. To determine if the amount youreceived is taxable in Pennsylvania, review Boxes 1 through 3(the amount you received or your distributions) and the PAtax treatment of Box 7 (the codes that will help determine thetaxability of your distribution). The federal codes contained inBox 7 of Form 1099-R include:
- Code 1 & 2 Early Distribution. This distribution is taxable for PA purposes, unless: (1) your pension or retirement plan was an eligible plan forPA tax purposes, and (2) you retired after meeting theage conditions of the plan or years of service conditionsof the plan. If your plan was not an eligible plan, or ifyou have not attained the age or years of servicerequired under the plan to retire, you must determine thePA-taxable amount of your distribution. You must use thecost recovery method to determine this amount. SeePage 9 for additional information.
IMPORTANT: If you are not sure whether your plan was an eligible retirement plan under PA taxlaw, ask your plan administrator.
- Code 3 or 4 Death/Disability Distribution. This is a distribution due to death and/or disability. Adistribution due to death is not taxable for PA purposes. A distribution due to disability generally is not taxable forPA purposes.
- Code 7 Normal Distribution. This distribution from an eligible Pennsylvania retirement plan is not taxable if you met the plan requirements (the age and/or years of service required by the plan) for retirement, and retired after meeting those requirements.
CAUTION: Distributions from a commercial insurance or mutual company annuity purchased as a retirement annuity are not distributions from an eligible Pennsylvania retirement plan and are taxable as interest income to the extent they are included in federal gross taxable income. See Annuities, Life Insurance or Endowment Contracts on Page 13 and the instructions for PA Schedule W-2S beginning on Page 24 for additional information.
- Code G or H Rollover. This is a rollover from one qualified fund to another and is not taxable for PA purposes. See IRA Distributions below.
- Boxes 8 or 9b. Distributions listed in these boxes are distributions from an insurance policy or annuity purchased for your retirement. Such distributions are not taxable if: (1) your insurance policy or annuity was from an eligible plan for PA tax purposes; and (2) you retired after meeting the age or years of service conditions of such eligible plan. If you do not meet these requirements, the taxation of your distributions must be determined under the cost recovery method. See Page 9 for additional information. This distribution is taxable as interest on PA Schedule A, not as compensation on Line 1a.
- Boxes 10 and 11. If there is state withholding noted in Box 10 of the 1099-R and the state indicated in Box 11 is PA, report the amount of PA tax withheld on PA Schedule W-2S in Part B.
IRA Distributions (60-day rollover rule):
If you received a distribution from an IRA (before age 591/2 and retiring) and rolled the entire distribution (100 percent) into a Roth IRA directly, or within 60 days, the distribution is not taxable income for PA purposes. If you did not roll the entire distribution into another IRA, you must report PA-taxable income to the extent the distribution exceeds your contributions that is apportionable thereto.
IMPORTANT: If you retired, but did not reach age 591/2, you must report your distributions on a cost recovery basis until you reach age 591/2.
Annuities. If you received a distribution from an annuity that is not an employer-sponsored retirement plan, see Annuities, Life Insurance, or Endowment Contracts on Page 13.
FILING TIP: If you receive a distribution from a retirement plan, IRA or any other plan reported on federal Form 1099-R, you must complete Part B of PA Schedule W-2S regardless of whether the distribution is taxable or tax-exempt. Withholding on distributions is also reported on this schedule. See the instructions for PA Schedule W-2S, beginning on Page 24.
LINE 1b. UNREIMBURSED EMPLOYEE BUSINESS EXPENSES
Review the instructions beginning on Page 26 to determine ifyou can deduct expenses from your PA-taxable compensation. Follow the instructions. PA law does not follow federal law for allowable employee business expenses. EXAMPLE: You may deduct 100 percent of your PA-allowable expenses onthe PA Schedule UE. If claiming expenses on PA ScheduleUE, briefly describe your occupation or job in the space provided. If your spouse also has expenses, describe his or heroccupation or job on a separate PA Schedule UE.
IMPORTANT: The department has the legal authority to request evidence that your expenses are allowable for PA purposes.
LINE 1c. NET COMPENSATION
Subtract Line 1b from Line 1a.
LINE 2. INTEREST INCOME
Report all PA-taxable interest income received or creditedduring the year. Generally, Forms 1099-INT and similar statements from financial institutions show the interest amount. You do not have to submit these forms and statements. Include interest income from personal savings andchecking accounts, insurance contracts, obligations of otherstates (not Pennsylvania), and investments. If your totalinterest income (taxpayer, spouse and/or joint) is more than$2,500, complete and submit PA Schedule A. See theinstructions on Page 29.
Do not report interest income from direct obligations of the U.S. government, the Commonwealth of Pennsylvania, andpolitical subdivisions of Pennsylvania. For a list of exemptobligations, obtain Tax Exempt Obligations for PennsylvaniaPersonal Income Tax Purposes (Form REV-1643) from oneof the Forms Ordering Services on Page 2.
How to Classify Interest Income:
You must classify interest, regardless of how you report theincome for federal purposes. Report personal interest on Line 2. Otherwise, include interest:
- From business accounts, working capital interest, andaccounts receivable in determining profit (loss) on a PAbusiness schedule;
- From installment sales on PA Schedule D-1; and
- From rental security deposits in determining income(loss) on PA Schedule E.
Money Market Funds, Mutual Funds, and OtherInvestment Companies:
Include the earnings distributed to you (other than withdrawalsof your previously PA-taxed contributions) as dividend incomeon Line 3.
Annuities, Life Insurance, or Endowment Contracts:
If you invested in an annuity, including a retirement annuitythat is not part of an employer-sponsored retirement program, you may have PA-taxable income when you begin receivingannuity payments. If you are required to report an amountfrom an annuity for federal income tax purposes, you arerequired to report the amount as interest income for PA PITpurposes. Also, if you are required to report an amount froma life insurance and endowment contract for federal income tax purposes, you are required to report the amount asinterest income for PA personal income tax purposes.
Charitable Gift Annuities:
If you established a gift annuity to a charitable organizationfrom which you are receiving periodic payments, you havePA-taxable income. Charitable gift annuities report theirincome as interest income on Line 4 of PA Schedule A usingthe amounts reported or included in gross income for federalincome tax purposes (ordinary income and capital gainsincome) regardless of when they began reporting the incomefrom that charitable gift annuity. In the event that a charitablegift annuity is exchanged or sold in the future, the PA basis ina charitable gift annuity will be different from the federal basisfor charitable gift annuities from which payments began priorto Jan. 1, 2005. Income from the sale or exchange of acharitable gift annuity is reported on PA Schedule D.
Forfeited Interest Penalty:
. You may offset the penalty for premature redemption orwithdrawal of a time savings account or certificate of deposit, only against the interest income you received in the sametaxable year from that account or certificate. You cannotoffset this penalty against other interest income. If your totalpenalty exceeds the related interest income, you may reportthe excess as a loss on PA Schedule D.
LINE 3. DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS FROM MUTUAL FUNDS
Report all dividend income received or credited during 2013. You do not have to submit your Forms 1099-DIV and otherstatements. If your total dividend income (taxpayer, spouseand/or joint) is more than $2,500, you must complete andsubmit PA Schedule B. See instructions for this schedule beginning on Page 30. You cannot substitute a FederalSchedule B for PA Schedule B.
Capital Gains Distributions:
Report capital gains distributions from your mutual funds fromBox 2a of your 1099-DIV as PA-taxable dividend income, even though you report such distributions as capital gains onfederal Schedule D.
How to Classify Dividend Income:
You must classify dividend income, regardless of how youreport the income for federal purposes. Report personaldividends on Line 3. Otherwise, include dividend income from business accounts and working capital dividend income indetermining profit (loss) on your PA business schedule.
PA Resident Shareholders in Another State's S Corporation that is not also a PA S Corporation:
If you are a shareholder in another state's Subchapter Scorporation, and that corporation elected not to be treated as aPA S corporation, include the cash or property you actuallyreceived out of the corporation's earnings and profits asdividend income on Line 3. If you received distributions inexcess of the corporation's earnings and profits, report thesedistributions on PA Schedule D. Do not report the amount ofyour distributable income, and do not submit the federalSchedule K-1. A shareholder may not claim a credit for incometax paid to another state by an S corporation that elected notto be treated as a PA S corporation.
FILING TIP: You must include nontaxable interest and dividends as Eligibility Income on PA Schedule SP.
REPORTING NET INCOME, GAINS, AND LOSSES ON LINES 4, 5, AND 6 ONLY
Under PA law, losses may only be reported on Lines 4, 5, and 6. If entering a loss, fill in the oval next to the line.
REMEMBER: You may not offset income in one PA income class with a loss in any other PA income class. You cannot carry forward or carry back gains or losses to other tax years.
Spouses, whether filing jointly or separately, may not use each other's expenses to reduce income or offset each other's income and losses.
If you are married, you and your spouse may file a joint tax return for convenience only. PA law does not provide any advantage when filing a joint return. PA law does not allow spouses to offset income and losses with each other, even when both have activity in the same income class. You must follow these rules:
- If each realizes a net profit, gain, or income, add the net income amounts together and report that total on the appropriate line.
- If each realizes a net loss, add the net losses and report that total on the appropriate line. Fill in the oval next to that line.
- If one spouse has a net profit, income or gain and the other spouse has a net loss, report only the net income on the appropriate line. Do not take into account the spouse's loss.
Line 4. Mary and Ben file a joint tax return. Mary owned a flower shop, and realized a net profit of $5,000. Ben was a shareholder in a PA S corporation, and received a PA Schedule RK-1 reporting $35,000 of business income. They jointly owned a small retail store and realized a loss of $8,000. They report $32,000 on Line 4 from Mary's net income of $1,000 ($5,000 less her half of the $8,000 loss), plus Ben's net income of $31,000 ($35,000 less his half of the $8,000 loss).
Line 5. They sold the retail store for a $6,000 loss. Mary sold stock that she owned individually for a $9,000 gain. Ben sold stock that he individually owned for a $3,000 loss. On Line 5, they report a gain of $6,000. Mary's net gain is $6,000 ($9,000 less her half of the $6,000 loss). Ben's net loss is $6,000 (his $3,000 stock sale loss and his half of the $6,000 loss on the sale of the store). Since Ben's separate loss may not reduce Mary's gain, they report a gain of $6,000 on Line 5.
Line 6. They jointly owned a rental property and realized a loss of $2,000. Mary was a partner in a rental partnership and her share of the partnership's loss was $1,000. Ben's PA S corporation realized a loss from its rental operations. His share of the loss was $4,000. Mary's total loss was $2,000 and Ben's total loss was $5,000. On Line 6, they report the total loss of $7,000 (and fill in the oval) since they each individually realized a total net loss.
PA-Taxable Income. On their jointly filed 2013 tax return, they report total taxable income of $38,000: Line 4 of $32,000 and Line 5 of $6,000, not taking into consideration their Line 6 loss of $7,000.
Submit the required Pennsylvania schedule for eachamount you report on Lines 4 through 8. Read the instructions for each income class carefully.
CAUTION: If you do not provide the required schedules, thedepartment will need to request the missing information. Failing to provide schedules that the department requires willdelay the processing of your tax return and therefore delaythe initial date your return is considered to be complete.
PARTNERSHIP, LIMITED LIABILITY COMPANY AND PA S CORPORATION PARTNERS, MEMBERS AND SHAREHOLDERS
PA Schedules RK-1 and NRK-1L:
These schedules show your share of income (loss) for eachPA income class. If you received any guaranteed payments, add those payments to your share of income (loss) asshown on your Pennsylvania schedules. The partnership, limited liability company or PA S corporation deducts allallowable expenses and other allowable adjustments. If yourpartnership, limited liability company or PA S corporationrequires that you incur direct business expenses, and theexpenses are allowable unreimbursed expenses for PApurposes, you must itemize them on a separate statement. The department may require, at a later date, a copy of thepartnership or limited liability company agreement or articlesof incorporation that require the partner, member or shareholder to pay expenses out of his or her personal assets. You cannot deduct any personal expenses or expenses that youincur for your own convenience.
Copies of PA Schedules RK-1 or NRK-1 must be submitted for each S corporation, partnership or limited liabilitycompany in which you are a shareholder, partner or member. Copies of PA Schedules RK-1 and NRK-1 must be submittedwith all paper returns filed. Electronically filed returns do notrequire the separate submission of these schedules as theyare electronically submitted with the electronic return. Incases where a PA Schedule RK-1 or NRK-1 is not made available, federal Schedule K-1 should be provided. FederalSchedules K-1 cannot be used to prepare electronically filedreturns as they cannot be electronically submitted to thedepartment. However, if the software product being used supports the attachment of PDF files and the income reported onthe federal Schedule K-1 is converted to and reported by PAclassification rules, a federal Schedule K-1 can be used to prepare electronically filed returns if the schedule and supportingstatements are included with the PDF attachment feature.
PA Resident Shareholder and/or Partner of an S Corporation or Partnership from Another State:
If you are a PA resident shareholder of an S corporation or aPA resident partner in a partnership that does businessentirely within another state, the entity is also required to filea PA-20S/PA-65, PA S Corporation/Partnership InformationReturn as a result of having a PA resident shareholder orpartner. You should receive a PA Schedule RK-1 from thatentity which you must submit with your PA-40 return to reportyour share of the income (loss) whether distributed or not, asshown on your PA Schedule(s). All the shareholders may alsoelect to not be taxed as a PA S corporation by filing FormREV-976, Election Not To Be Taxed As A Pennsylvania SCorporation. You or the S corporation can obtain this form byusing one of the Forms Ordering Services on Page 2.
PA Resident Partner and/or Shareholder:
If you are a partner in a partnership or a shareholder of a PAS corporation, you should receive a PA Schedule RK-1. Youmust submit a copy of each PA Schedule RK-1 and reportyour share of income whether distributed or not as shown onyour PA Schedule(s). If the partnership does not provide aPA Schedule RK-1, you still must report and classify theincome (loss) from the federal Schedule K-1 according to theinstructions for each PA income class. You must also submit a copy of your federal Schedule K-1 and related supportingschedules where applicable that provide information as tothe classification of the income from the federal Schedule K-1.
Nonresident Partner and/or Shareholder:
If you are not a resident of Pennsylvania, but are a partner ina PA partnership or a shareholder of a PA S corporation, youshould receive a PA Schedule NRK-1. You must submit a copy of each PA Schedule NRK-1 and report your share ofPA-taxable income (loss) whether distributed or not as shown on your PA schedule(s). If the partnership does not provide aPA Schedule NRK-1, and the partnership has income (loss) from PA sources, you still must report and classify the income(loss) from your federal Schedule K-1 according to theinstructions for each PA income class. You must also submit a copy of your federal Schedule K-1 and related supportingschedules where applicable that provide information as to theclassification of the income from the federal Schedule K-1. If the income (loss) is being reported to PA from a federalSchedule K-1 and the income (loss) is not 100 percent of theamount from the federal Schedule K-1, a schedule or written explanation should be submitted along with the federalSchedule K-1 explaining how the amount reported wasdetermined.
LINE 4. NET INCOME OR LOSS FROM THE OPERATION OF A BUSINESS, PROFESSION, OR FARM
Report all income (loss) from business, farm, and businessactivity from partnership and PA S corporation schedules. Youmay offset your own income in this class against your ownloss or losses from other business activities. If reporting atotal net loss, fill in the oval next to Line 4 on your PA-40.
For PA purposes, determine net income (loss) under acceptedprinciples and practices of the accounting profession. Reportyour net income (loss) from an unincorporated business orprofession on PA Schedule C. File a PA Schedule C or a PASchedule F using your separate books and records for PApurposes. You may be able to submit a PA Schedule C-EZ, ifyou file a federal Schedule C-EZ.
NOTE: You can obtain the schedule(s) you need from oneof the Forms Ordering Services on Page 2.
If you do not maintain separate books and records forPennsylvania, you may submit your federal schedule withyour PA-40, only if you do not have to adjust your federalamounts to comply with the specific differences betweenfederal law and PA law.
Generally, you must adjust your federal amounts for PA taxpurposes. These adjustments can increase or decrease yourPA-taxable income (loss). You must maintain appropriaterecords of such adjustments.
Additional information regarding income and expensesrequired to be adjusted is available within the instructions for PA Schedules C and F and in the PA PIT Guide. You may alsovisit the department's website at www.revenue.state.pa.us toobtain detailed information about federal and Pennsylvaniadifferences and adjustments.
Reporting Rental Income (Loss) as Business Activityon Line 4 or as Rents on Line 6:
Rental activity may be a business activity if meeting theconditions described below. If in business, you report yournet profit (loss) on a PA Schedule C. If not in the business ofrents, you report your rental activity on a PA Schedule E onLine 6. You report rental business when:
- You offer the use of your property with the intention ofrealizing a profit; and
- The leasing of your property is characterized by regularityand continuity of activities; and
- You offer the use of your property on a commercialbasis to others in a marketplace and at least one of thefollowing applies:
- The average period of customer use is 30 days orless; or
- The property is customarily made available for useonly during defined business hours; or
- In addition to the property, the taxpayer also providessignificant services (see explanation below) to thelessee; or
- The taxpayer incurs significant operating expenses inmaking the property available for lease; or
- The leasing activity is incidental to a real estate salesbusiness.
Significant Services . Providing housekeeping service, room service, valet parking, decorating assistance, delivery services, transportation services, and concierge services are significant services.
However, providing heat, lighting, electric service, elevators, cleaning public access and exit areas, collecting trash, andmaintaining the property in a usable rental condition are notusually significant services.
LINE 5. NET GAIN OR LOSS FROM THE SALE, EXCHANGE, OR DISPOSITION OF PROPERTY
Report your gain (loss) from each sale, exchange, or disposition of any kind of intangible property and any real or tangible property. Report your share of the gains (losses) from apartnership or PA S corporation in which you are a member. Report your total net gains (losses) on PA Schedule D.
IMPORTANT: PA law does not distinguish between long-term and short-term gains (losses) or have provisions relating to casualty losses, sales to related parties, and nonrecognition of gains (losses) under IRC Section 1031(like-kind exchanges). PA law does not allow the installmentsale method of reporting for the sale of intangible property, such as stock.
You may offset your own net gains against your own lossesin determining this line. If married and you both have income(losses) in this class, see REPORTING INCOME, GAINS, AND LOSSES ON LINES 4, 5, AND 6 beginning on Page 14. If you realize an overall net loss, fill in the oval next to Line 5on your PA-40.
On PA Schedule D, report gains (losses) from selling:
- Land and buildings;
- Properties held for investment, including rental properties;
- Stocks and bonds;
- Ownership interests in partnerships and business enterprises;
- A business asset in a transaction that is not an ordinary or recurring business transaction; and/or
- Obligations of other states and countries.
Also, include the following on PA Schedule D:
- Amounts from PA Schedules D-1, D-71, RK-1 and NRK-1.
- Amounts from PA Worksheets REV-998 and REV-999.
- Proceeds from an insurance company demutualization.
- Sales of inherited property. The basis of inherited property is its fair market value at the date of death.
- A distribution from a C corporation (other than a dividend) that exceeds your adjusted basis in that corporation. Please see the instructions for Line 4 of PA Schedule D beginning on Page 31.
- A nonqualifying sale of your principal residence - obtain PA Schedule 19, Sale of a Principal Residence.
- A distribution from a partnership or PA S corporation (other than dividends) that represents a return of your investment in that entity. You must determine if such a distribution results in a taxable gain by completingworksheets REV-998 or REV-999. These worksheets are available on the department's website.
- Gains or losses from the IRC Sections 988, 1256, and 475 or from straddles, hedges, options or other derivatives.
Loss on the Disposition of Property:
PA law recognizes a loss only on a transaction entered into for profit, and only in the year in which an identifiable event closed and completed the transaction and fixed the amountof the loss so there is no possibility of any eventual recovery. Do not report a loss on the sale of property that you did not acquire for profit, such as a personal car, furniture, or a qualifying sale of your principal residence.
Capital Gains Distributions:
Report capital gains distributions received from mutual funds as PA-taxable dividend income, even though you report such distributions as capital gains on federal Schedule D. SeePage 13 for more information.
Exchange of Insurance Contracts:
Do not report the gain (loss) on the sale, exchange, or disposition of any insurance contracts that are tax-exempt forfederal income tax purposes under IRC Section 1035. Tax-exempt exchanges of insurance contracts include:
- An exchange of a life insurance contract for another life insurance contract, an endowment contract or an annuity contract;
- An exchange of an annuity contract for another annuity contract;
- An exchange of an endowment contract for an annuitycontract; and
- An exchange of one endowment contract for another endowment contract if the dates for payments begin on or before the original contract's payment dates.
If the exchange of contracts has the effect of transferringproperty to a non-U.S. citizen, the gain or loss is nottax-exempt. If you receive cash or other boot in an exchangeof contracts, see the PA PIT Guide.
Charitable Gift Annuities:
See Page 13 for additional information on where to reportincome from charitable gift annuities.
Exempt Obligations Originally Issued beforeFeb. 1, 1994:
Do not report the gain (loss) realized on the sale, exchange, or disposition of the following obligations, if the original issuedate was before Feb. 1, 1994, regardless of the date youacquired the obligation:
- Direct obligations of the U.S. government, such as federaltreasury bills and treasury notes;
- Obligations of certain agencies, instrumentalities, andterritories of the U.S. government; and
- Direct obligations of the Commonwealth of Pennsylvaniaand its political subdivisions.
IMPORTANT: You may not use any loss realized on thedisposition of the above obligations to offset other gains.
Exempt Obligations Originally Issued on or afterFeb. 1, 1994:
Report the gain (loss) realized on the sale, exchange, ordisposition of the above obligations, if the original issue datewas on or after Feb. 1, 1994.
IMPORTANT: You must report all such gains and canuse any losses to offset other gains.
Sale of Your Principal Residence:
If you sold your principal residence in 2013 and meet therequirements for the 100 percent gain exclusion, do not reportthe sale on your tax return. This exclusion is not identical tothe federal exclusion. Generally, if during the five yearspreceding the sale of your home, you owned it for at least twoyears, and used it as your principal residence for at least twoyears, you are eligible for this exclusion.
If you used a portion of your principal residence for businesspurposes during your ownership, you may have gain or lossto report on the sale. For more information, request thebrochure Sale of Your Principal Residence (REV-625) and PASchedule 19, Sale of a Principal Residence. Also see the PASchedule D instructions beginning on Page 30.
CAUTION: If you sold your principal residence, but you donot qualify for the exclusion, report your gain or enter zero ifyou realized a loss on PA Schedule D.
LINE 6. NET INCOME OR LOSS FROM RENTS, ROYALTIES, PATENTS, OR COPYRIGHTS
Rental income includes the amounts you receive for the useof, or the right to use, your real or personal property.
Royalty income includes the amounts you receive for theextraction of coal, oil, gas, or other minerals in place, andthe amounts that you receive for the use of your patents, copyrights, secret processes, formulas, goodwill, trademarks, trade brands, franchises, and similar property.
If in the business of renting your property, you report your netprofit (loss) on a PA Schedule C. Please see Page 15, Reporting Rental Income (Loss) as Business Activity on Line 4or as Rents on Line 6.
Gross rents and royalties include all items of gross receiptsas described above except:
- Receipts from the sale, exchange, or other disposition ofrental, royalty, and similar property; and
- Receipts from operating an oil, gas, or mineral interestas a business, profession, or farm, or otherwise derivedin the ordinary course of, and from the operation of, a business.
Report the total income (loss) from all PA Schedules E andall PA Schedules RK-1 or NRK-1. Generally, you must usePA Schedule E. You may use federal Schedule E, if using only Part I, and with the following adjustments:
- Report passive rental/royalty loss in full, rather than carry it over to future years.
- Add any capital gains and distributions that you report on other federal schedules.
- Do not take any depreciation expense on sales tax that you elected to currently expense for PA personal income tax purposes.
- Optional: Deduct sales tax on acquired property as an expense currently rather than add it to the basis of the property as required for federal purposes.
IMPORTANT: If you currently expense such sales tax, the basis of that property will differ from the federal basis, and you must adjust your depreciation expense accordingly. You cannot expense sales tax and still take depreciation on the sales tax. If you do not expense sales tax, you may add such sales tax to the cost basis of the property and depreciate the aggregate cost plus sales tax.
- You must separately show your share of any rental or royalty gain (loss) that you realize as a partner, a shareholder of a PA S corporation, or other entity.
You may only offset your own net income and losses in determining the amount to report on this line. If married and you both have income (losses) in this class, see REPORTING NET INCOME, GAINS AND LOSSES ON LINES 4, 5, AND 6 only beginning on Page 14. If you realize a total net loss, fill in the oval next to Line 6 on your PA-40.
CAUTION: Generally, PA law follows IRC Section 280A ifyou rent or lease your property, but do not intend to realize aprofit. Therefore, your rental expenses are limited to yourrental income, and you may not use a loss. If you rent orlease your property to realize a profit, read the description ofReporting Rental Income (Loss) as Business Activity on Line 4or as Rents on Line 6 on Page 16 to determine if you have abusiness activity that you should report on PA Schedule C.
Rental and Royalty Allowable Expenses:
You deduct those expenses that you paid or incurred duringthe taxable year that are ordinary and necessary for:
- The production of, or collection of, rents and royalties; or
- The management, conservation, or maintenance of rents, royalties, patents, copyrights, and similar property.
See the PA Schedule E instructions beginning on Page 31 forthe allowable expenses. You may not deduct expenses foryour own labor, capital investment, or capital improvements.
You recover costs associated with capital improvements through depreciation deductions. You may not deduct personal expenses or that part of any expense that is personal.
Rental Income (Loss) on Line 6 or Net Gain (Loss) on Line 5:
- Lease with an Option to Buy A lease with an option to buy may be a purchase contract under accepted accounting principles and practices. If it is, the payments you received under the contract are payments of the purchase price and are not includable as rental income. Report such income on PA Schedule D.
- Selling Mineral Interests, Patents, or Copyrights If you gave up all rights to mineral interests, patents, or copyrights, the amounts you received are considered payments for the sale or exchange of property. Report such income on PA Schedule D.
LINE 7. ESTATE OR TRUST INCOME
As a beneficiary of an estate or trust, you report the total PA-taxable income that the estate or trust must distribute, pay, or credit to you on PA Schedule J. You cannot report a loss as a beneficiary for PA purposes.
CAUTION: You should receive a PA Schedule RK-1 and/or NRK-1 from the estate or trust. If you received a federal Schedule K-1, you must report only the total income, not taking into account any losses, shown on the federal Schedule K-1. Add the total of income reported on federal Schedule K-1 as interest, dividends, long-term and short-term gains, annuities, royalties, trade or business income, rental income, etc. If you included any of these amounts on a PA schedule, other than PA Schedule J, adjust your PA schedule(s) accordingly. Include a photocopy of the federal Schedule K-1 with your return for each nonresident estate or trust and/or each estate or trust for which you fail to receive a PA Schedule RK-1 and/or NRK-1.
FILING TIP: Cash and property you acquire from an estate or trust by gift, bequest, devise, or inheritance isnot taxable. You must report any PA-taxable income that yousubsequently earn or receive from that cash or property.
The person (settlor) who establishes a revocable trust(including grantor trusts that are revocable) does not filea PA-41 if, under the governing instrument, he/she retainsauthority to:
- Completely revoke the trust without the declaration ofnew uses or the consent of any other party; and
- Revest in himself/herself the legal title to the corpus of the trust, without the consent of any other party.
If you establish a revocable trust, report the income (loss) thatthe trust earns, receives, and realizes in the appropriate PAincome class on your PA-40 personal income tax return. Donot report the amounts on PA Schedule J.
When submitting supporting schedules and statementsshowing the name of the trust, write REVOCABLE clearly onthe schedule.
Grantor Trust. A grantor trust generally files a PA-41. The beneficiaries of the trust, including the grantor, if he/she receives income fromthe trust, report the income as beneficiaries on their PASchedules J.
LINE 8. GAMBLING AND LOTTERY WINNINGS
PA law imposes its income tax on PA residents on all gambling and lottery winnings from any source, except prizes fromplaying the Pennsylvania Lottery. As a PA resident, you must include lottery winnings from other states and countries.
PA law imposes its income tax on nonresidents on allgambling and lottery winnings from PA sources, except prizes from playing the Pennsylvania Lottery.
Gambling and lottery winnings include cash, the value ofproperty (automobiles, jewelry, electronic devices, appliances, clothes, etc.), the value of the use of property (trips, vacations, airline tickets, cruises, etc.), and other items of value. Youmay only deduct your costs of gambling, wagering, betting, and playing lotteries from your winnings. You may not deduct any expenses (programs, tip sheets, travel, meals, lodging, etc.) that you incurred to take part in gambling, wagering, betting, and lottery activities.
IMPORTANT: You may not deduct the cost of Pennsylvania Lottery tickets from other PA-taxable gambling and lottery winnings.
Powerball and Mega Millions:
If you purchase a Powerball or Mega Millions ticket in Pennsylvania, whether a PA resident or not, any prize you win is not taxable for PA PIT purposes. If you are a PA residentand purchase a Powerball or Mega Millions ticket in another state, any prize you win is PA-taxable income.
Report your PA-taxable winnings on PA Schedule T. Spousesmust report their winnings separately. The payers of prizes provide the department with copies of the federal Forms W-2G that they submit to the IRS.
Documenting Gambling and Lottery Winningsand Losses:
Taxpayers claiming gambling winnings and losses must beable to document their winnings and losses. This documentation should not be included with your return, but may be requested at a future date by the department. You should keepan accurate diary or similar record of winnings and losses. In addition to a diary, you should have other documentation to support the entries within the diary. Some but not all of thedocuments that can be used to support gambling winnings and losses include: federal Form W-2G, Certain Gambling Winnings; federal Form 5754, Statement by Person(s) Receiving Gambling Winnings; wagering tickets; canceledchecks; substitute checks; credit records; bank withdrawals; and statements of actual winnings or payment slips provided by the gambling establishment.
Some examples of the record keeping for slot or electronic gaming machines may include a record of the machine number and all winnings by date and time the machine wasplayed as well as statements of actual winnings, payment slips, or other documentation provided by the gambling establishment. Record keeping for harness or horse racingincludes a record of the races, amounts of wagers, amounts collected on winning tickets and amounts wagered on losing tickets as well as the tickets themselves. For more information regarding other forms of gambling and the record keeping and documentation to support gambling winnings and losses, please see IRS Publication 529, Miscellaneous Deductions.
PA Withholding on Gambling and Lottery Winnings:
Many of the new casinos in Pennsylvania offer voluntarywithholding of PA personal income tax. If you elected to havetax withheld from your winnings, report withholding on Line 7of your PA Schedule T. You must also include a copy of yourfederal Form(s) W-2G with your return. See the instructionsfor Line 13 on Page 19 for additional information.
LINE 9. TOTAL PA TAXABLE INCOME
Add only the positive income amounts from Lines 1c through 8. Do not add, subtract, or take losses into consideration.
IMPORTANT: You cannot use a loss that you report in one income class on your tax return to reduce incomein any other class.
LINE 10. OTHER DEDUCTIONS
PA law allows three deductions against income. Deductions are allowed for: Medical Savings Account contributions; Health Savings Account contributions; and IRC Section 529Qualified Tuition Program contributions. If you are claiming adeduction for any of these contributions you made, you mustenter a code for the type of deduction you are claiming in theblock provided next to the line description. Descriptions of thefour codes that can be entered in that block are as follows:
M - Medical Savings Account contribution deduction;
H - Health Savings Account contribution deduction;
T - Tuition Account Program contribution deduction; or
C - Combined deduction from two or all three contribution deductions.
You must also complete PA Schedule O and/or include the information required for each contribution as discussed in thespecific instructions below. The total deductions you claimcannot reduce your taxable income below zero.
Medical Savings Account and Health Savings AccountContributions:
Pennsylvania follows federal rules for these deductions. If youcan take these deductions on your federal return and youwish to claim them for PA purposes, you must complete PASchedule O and include a copy of page one of your federalForm 1040 with your PA income tax return. You may not claimthese deductions if you cannot claim them for federal incometax purposes. Please refer to the PA PIT Guide for additionalinformation. The amount you report as deductions cannotexceed the federal limits.
IRC Section 529 Qualified Tuition Program Contributions:
Pennsylvania allows a maximum deduction of $14,000 perbeneficiary, per taxpayer for IRC Section 529 Qualified TuitionProgram contributions for 2013. A taxpayer and spouse eachmay deduct $14,000 per beneficiary. For additional informationon deductions and limitations, see the instructions for PA Schedule O beginning on Page 33.
NOTE: You may not claim a deduction for a rollover of anaccount from one IRC Section 529 plan into another IRCSection 529 plan. You also may not claim a deduction for thechanging of beneficiaries within an account for an IRCSection 529 plan.
CAUTION: The amount you report on Line 10 cannotexceed the Total PA Taxable Income reported on Line 9. Theamount reported on Line 10 on a joint tax return also cannotexceed the Total PA Taxable Income included in Line 9 for a taxpayer or spouse that would be calculated had the taxpayer or spouse filed separately.
LINE 11. ADJUSTED PA TAXABLE INCOME
Subtract Line 10 from Line 9.
CAUTION: Do not report any medical insurance premiums
LINE 12. PA TAX LIABILITY
or itemized medical expenses from federal Schedule A on this line. Multiply Line 11 by 3.07 percent (0.0307).
PAYMENTS AND CREDITS
LINE 13. TOTAL PA TAX WITHHELD
Enter your total PA tax withheld from your PA Schedule W-2S or from Box 17 of your federal Form(s) W-2. Include the PA tax withheld from PA Schedule T or from Box 14 of your federal Form(s) W-2G. Also include any PA tax withheld from Box 10 of your federal Form(s) 1099-R and/or Box 16 of your federal Form(s) 1099-MISC.
IMPORTANT: If your PA tax withheld is more than 3.07
percent, you must submit your Form W-2, or a legible photocopy, and a written explanation why your employer withheld at a higher rate. The department may also request an explanation from your employer.
CAUTION: Do not include nonresident tax withheld from limited liability companies, partnerships and S corporations. Include nonresident withholding from those entities on Line 17 of the PA-40.
Estimated Payments and Credits:
FILING TIP: Visit the Revenue e-Services Center at www.revenue.state.pa.us or call the department's FACT and Information Line at 1-888-PATAXES (728-2937) and verify your 2013 PA estimated payments and carryover credit before completing Lines 14, 15, and 16.
If filing separately with a joint estimated account, the department may delay one return until the other processes. If your estimated payments are not properly posted to your account, request and file Form REV-459B. Both spouses must sign this form. The department will apply your estimated payments according to your written request.
LINE 14. CREDIT FROM YOUR 2012 PA INCOME TAX RETURN
Enter your credit from your 2012 PA tax return.
IMPORTANT: Do not claim the credit if you originally requested the credit be carried over to your 2013 PA estimated account and you subsequently requested a refund, or if you received a refund of your carryover credit from the department. Also, if your account was adjusted by the depart- ment or the department assessed you for a previous year's underpayment, do not claim the credit.
LINE 15. 2013 ESTIMATED INSTALLMENT PAYMENTS
Enter your total 2013 estimated payments. Include your spouse's 2013 estimated payments if filing jointly. Do not include any payment of tax due made with a PA tax return.
If you are including Form REV-459B, Consent to Transfer, Adjust or Correct PA Estimated Personal Income Tax Account, fill in the oval on Line 15 of the PA-40.
LINE 16. 2013 EXTENSION PAYMENT
Enter the payment you made with your 2013 extension request.
LINE 17. NONRESIDENT TAX WITHHELD FOR NONRESIDENT PARTNERS AND SHAREHOLDERS OF PA S CORPORATIONS
Enter the PA tax withheld by your partnership or PA S corporation. You must submit your PA Schedule(s) NRK-1.
LINE 18. TOTAL ESTIMATED PAYMENTS AND CREDITS
Add only Lines 14, 15, 16, and 17.
Tax Forgiveness Credit: Transfer the amounts for Lines 19, 20 and 21 from the PA Schedule SP that you submit with your PA tax return.
LINE 19a. FILING STATUS
Enter the status from Part A of your PA Schedule SP. Todetermine if you are eligible to include PA Schedule SP withyour return, please refer to the instructions beginning onPage 33.
LINE 19b. DEPENDENT CHILDREN
Enter the number of dependent children you are claimingfrom Part B, Line 2 of PA Schedule SP.
LINE 20. TOTAL ELIGIBILITY INCOME
Enter your total eligibility income from Part C, Line 11 of yourPA Schedule SP.
LINE 21. TAX FORGIVENESS CREDIT
Enter your credit from Part D, Line 16 of your PA Schedule SP.
FILING TIP: If you claim a credit for Tax Forgiveness on Line 21, you must complete and include PA ScheduleSP. See the instructions beginning on Page 33 for additionalinformation.
LINE 22. RESIDENT CREDIT
Enter your total allowable PA credit for personal income taxthat you paid to another state(s) or country. You must:
- Submit a PA Schedule G-R and PA Schedule G-S or PA Schedule G-L and a photocopy of each tax return thatyou filed in another state or country. PA Schedules G-R, G-S and G-L and their instructions are not included with this booklet and may be obtained by using one of theForms Ordering Services on Page 2.
- If you are a shareholder or partner, submit the following: a PA Schedule G-R; completed PA Schedule G-L for each state or country in which a credit is claimed; the statement from the partnership or S corporation providing the breakdown of the states and amounts and classes of income subject to tax in each state; a copy of your PA Schedule(s) RK-1; and a copy of the other states' tax returns. If you are a shareholder or partner and the S corporation or partnership files a composite return on your behalf for the other state or states, your partnership or PA S corporation submits the other state's return with its PA-20S/PA-65 Information Return and a copy of the other states tax returns are not required to be included with the PA-40. In such cases, submit a statement from the S corporation or partnership providing the breakdown of the income and taxes paid to each state on your behalf.
PA Resident Shareholders in a Subchapter S Corporationthat is not also a PA S Corporation: PA law does not permit a Resident Credit if you are a shareholder in a subchapter S corporation if that corporation elected not to be taxed as a PA S corporation. See Page 14. See the instructions for PA Schedule G-L for additional information. PA Schedule G-L is not included with this booklet and may be obtained by using one of the Forms Ordering Services on Page 2.
LINE 23. TOTAL OTHER CREDITS
Enter the total of the allowable credits you can claim on PA Schedule OC. PA Schedule OC is not included with this booklet and may be obtained by using one of the Forms OrderingServices on Page 2.
FILING TIP: Taxpayers claiming any credit on PA Schedule OC may not file a joint return and are required to file separate returns.
The credits listed on PA Schedule OC are restricted credits meaning taxpayers or entities must obtain special documentation authorizing the use of the credits. Documentsmust also be sent to the Bureau of Corporation Taxes sothe credit can be verified and applied to the taxpayer. Additional information on restricted credits is available in Chapter 17 of the PA PIT Guide found on the department'swebsite at www.revenue.state.pa.us .
LINE 24. TOTAL PAYMENTS AND CREDITS
Add Lines 13, 18, 21, 22, and 23.
LINE 25. USE TAX
Use tax is the counterpart of sales tax and applies to taxablepurchases made over the Internet, through toll-free numbers, from mail order catalogs and from out-of-state locations, or anyother occasion where sales tax was not charged and collectedby the seller. The use tax rate is the same as the sales taxrate: 6 percent state tax, plus an additional 1 percent localtax for items purchased or used in Allegheny County and2 percent local tax for Philadelphia.
If you purchase items or services subject to sales tax forwhich the seller does not charge and collect sales tax on theinvoice or receipt, you are personally responsible for remittingthe use tax directly to the PA Department of Revenue.
Examples of taxable items include the following: antiques, paintings, appliances, books, stationery, computers, exercise equipment, sports equipment, formal clothing, furniture, furnishings, jewelry, luggage, handbags, musical instruments, office equipment, souvenirs, televisions, radios, stereo equipment, video equipment and camera equipment. Examples of taxable services include lawn care, pest control, self-storage, building cleaning and maintenance servicessuch as housekeeping services. See the Retailer's Information Guide (REV-717) for an extensive, though not comprehensive, list of taxable items and services.
Please see the CAUTION statements in the instructions for Schedule C, Schedule E and Schedule UE for additional information.
This method of reporting and paying use tax may not be usedfor purchases of motor vehicles, watercraft, boats, ATVs, snowmobiles or cigarettes.
If you have receipts or purchase records for items or servicessubject to use tax, use the worksheet on the previous pageto calculate your use tax liability. Taxpayers are encouragedto review purchase histories made available online by popularInternet sellers and use that information to calculate the tax due.
Note that this worksheet must be used to calculate use tax due on individual purchases over $1,000.
If you paid some sales tax on items - for example, sales taxat a lower rate paid to another state or sales tax paid toPennsylvania but not Philadelphia - you may offset your usetax liability by the sales tax already paid using this worksheet.
IMPORTANT: If you do not have a use tax liability orused form PA-1 to report and pay use tax, you mustenter zero on Line 25.
The department reserves the right to assess additionaluse tax due if and when it discovers evidence that the total purchase amount reported on the PA-40 is less thanthe actual purchase amount. Individuals and businesses with Pennsylvania sales tax licenses should report use tax on their sales tax returns. For detailed information on use tax reporting responsibilitiesand options, visit www.revenue.state.pa.us/usetax .
LINE 26. TAX DUE
If the total of Line 12 and Line 25 is more than Line 24, enter the tax you owe. You must pay the tax due, in full, on orbefore April 15, 2014. See the instructions for paymentoptions beginning on Page 23.
LINE 27. PENALTIES AND INTEREST INCLUDING ESTIMATED UNDERPAYMENT PENALTY
Enter on this line all the penalties and interest you owe fromfiling your return late and/or failing to pay your tax by thedue date. If including Form REV-1630, Underpayment ofEstimated Tax by Individuals, or Form REV-1630A, Underpayment of Estimated Tax by Individual Farmers, fill in the oval on Line 27 of the PA-40. Enter the appropriate code in the block provided:
Descriptions of the code that can be entered in the block are as follows:
L - If Late Payment Penalty and Interest, Failure to File Penalty and Interest or Late Filing Penalty and Interest is included in Line 27;
E - If only the Estimated Underpayment Penalty is included in Line 27;
B - If both Late Payment Penalty and Interest and Estimated Underpayment Penalty are included in Line 27;
X - Indicates there is no Estimated Underpayment Penalty due to Exception 2 or the Special Exception rules as indicated on the completed and included REV-1630 or the exception for farmers on the completed and included REV-1630A.
IMPORTANT: If you do not owe any penalty or interest, do not complete the amount blocks for Line 27 - leave them blank. If there is no amount included on Line 27 of the return, no code should be entered in the block provided for the code on this line unless an REV-1630 is included with the return that indicates there is no Estimated Underpayment Penalty due to Exception 2 or the Special Exception rules as indicated on the completed and included REV-1630 or REV-1630A is included with the return indicating the individual meets the exceptions for farmers. All returns with amounts listed on Line 27 should have a code listed in the block provided for the code on this line. See the description of the codes listed above for the proper code to enter when an REV-1630 or REV-1630A is included.
You can determine your penalty and interest by visiting the department's e-Services Center at www.revenue.state.pa.us. Forms REV-1630 and REV-1630A are also available on the department's website or by utilizing one of the Forms Ordering Services on Page 2 of the instructions.
The department will send you a notice if you do not include an amount on Line 27, and we determine you owe late filing and/or underpayment penalty and interest.
Include on Line 27 any penalty for failing to make estimated PA income tax payments, or making your payments late, or underpaying your estimated taxes.
Estimated Underpayment Penalty:
You are subject to this penalty if:
- You received more than $8,000 of taxable income that was not subject to PA withholding;
- Your credits from Lines 17, 21, 22 and 23 do not offset the tax due on the income from 1 above, and
- You failed to make timely estimated tax installment payments to cover the difference between 1 and 2 above, if any.
If you are subject to the penalty, the penalty will not be imposed if:
- Each estimated tax installment payment due and paid is equal to the installment payment you should have paid based upon the income from last year's full year return, or based upon the income as if you were a full year resident, based upon this year's tax rate; or
- Each estimated tax installment due and paid is equal to 90 percent of the installment payment due for each quarter based upon the income you received during the months in each installment period.
You can calculate this penalty on Form REV-1630 or Form REV-1630A that you submit with your return. Submit the appropriate form with your return if you owe the penalty.
The department will send you a notice if we determine you owe this penalty. If you disagree with the department's notice, you must submit Form REV-1630 or REV-1630A to support your own calculation or claim for an exception.
LINE 28. TOTAL PAYMENT DUE
Add Lines 26 and 27. Or, if the total of Line 12 plus Lines 25 and 27 is more than Line 24, add Lines 12, 25 and 27 and subtract Line 24. You must pay the total due, in full, on or before April 15, 2014. See the instructions for payment options beginning on Page 23.
REMINDER: If you owe $1 or less, you do not have to submit a payment with your return.
FILING TIPS: If you overpaid your 2013 PA income tax, but owe estimated underpayment penalty, you must subtract your estimated underpayment penalty from your overpayment.
LINE 29. OVERPAYMENT
Subtract Line 12 (and subtract Lines 25 and 27, if you entered amounts on these lines) from Line 24, and enter the difference here.
REMINDER: The department will not issue a refund for less than $1.
- PA PIT Liability. The department will apply youroverpayment to any outstanding PA personal income taxliability from a previous tax year.
- Delinquent Spousal/Child Support. Federal law requires Pennsylvania to establish a child-support offsetprogram. The Department of Revenue, in cooperationwith the Department of Public Welfare (DPW), interceptsPA income tax refunds of taxpayers that are delinquentin spousal/child support, and provides the offsets to thePA Child Support Enforcement System.
IMPORTANT: A married person who is liable for spousal/child support must file a separate PA tax return (Married, Filing Separately). If a married person who is liable for support files jointly with his or her spouse, the department will delay the refund until the taxpayers authorize the department to pay over the refund to DPW, or the spouses file separate returns. If the taxpayers do not reply to the department's notice, the department will process the return as Married, Filing Jointly.
- Treasury Offset Program for Delinquent PA Income Taxes. The Internal Revenue Service (IRS) will intercept federal income tax refunds for delinquent PA income tax liabilities. The Department of Revenue will notify delinquent taxpayers about its intention to intercept their federal refund and allow them 60 days to pay their liabilities.
- State Income Tax Levy Program for Delinquent Federal Income Taxes. The PA Department of Revenue will intercept PA income tax refunds for delinquent federal income tax liabilities. The Department of Revenue will provide a notice of the refund offset. The department's only responsibility in this levy process is sending your refund to the IRS. Therefore, all correspondence and inquiries regarding such offsets must be with the IRS.
LINES 30 THROUGH 36. APPLICATION OF OVERPAYMENT
If you do not enter amounts on Lines 30 through 36, or the total of these lines does not equal Line 29, you will receive a refund check. If you overpaid, you may apply all or part of your overpayment as follows:
LINE 30. Enter the amount of Line 29 that you want as arefund check.
LINE 31. Enter the amount of Line 29 that you want as acredit to your 2014 PA Estimated Tax account.
LINE 32. Enter the amount of Line 29 that you want todonate to the PA Breast Cancer Coalition's Refunds for Breast and Cervical Cancer Research fund.
LINE 33. Enter the amount of Line 29 that you want todonate to the Wild Resource Conservation Fund.
LINE 34. Enter the amount of Line 29 that you want todonate to the Military Family Relief AssistanceProgram.
LINE 35. Enter the amount of Line 29 that you want todonate to the Governor Robert P. Casey MemorialOrgan and Tissue Donation Awareness Trust Fund.
LINE 36. Enter the amount of Line 29 that you want todonate to the Juvenile (Type 1) Diabetes CureResearch Fund.
The total of Lines 30 through 36 must equal Line 29. For additional information about these donation lines, see Page 41.
Review Your Return: Before you sign your return, did you:
- Enter your Social Security number(s)?
- Verify that your name(s) and address are correct?
- Report all your PA-taxable income and claim all yourallowable PA credits?
- Check all the entries from Form(s) W-2 and schedules?
- Round income, loss, deductions and credit amounts to the nearest dollar?
- Check your math?
- Enclose all required supporting forms and schedules andassemble the return according to Page 4?
- Make a copy of your PA tax return for your records?
Your Signature(s) and Date: Read the oath before you sign and date your return. IfMarried, Filing Jointly, a spouse must also sign and date thereturn. If you are responsible for the affairs of a minor, disabled person, or a decedent who could not prepare his orher own PA tax return, you must sign to file a valid tax return.
E-File Opt Out:
A paid preparer must fill in this oval if the taxpayer requestedto file a paper copy of the return instead of electronicallytransmitting the return. If you are preparing your returnyourself, do not fill in this oval.
Preparer/Company Name, Telephone Number, PTIN andFirm FEIN: If you paid someone to prepare your tax return, the preparershould enter his or her name or business name, telephonenumber, PTIN and the company's EIN in the spaces providedon the return.
How to Pay: You must submit your payment on or before midnight, Tuesday, April 15, 2014. Select your payment option.
You may make your payment of taxes due with your return viacheck or money order with or without PA Form PA-V, using acredit/debit card or through electronic funds transfer. In orderfor the department to more accurately process payments, thedepartment recommends you use the fill-in form version of the2013 PA-40 PA-V found on the department's website at www.revenue.state.pa.us.
Paying With Fill-In Form PA-V:
Complete the fill-in version of Form PA-V as follows:
- Social Security number(s) -print your SSN and yourspouse's SSN on your Form PA-V in the same order asthey appear on your tax return.
- Name(s) - type in your name(s) on the Form PA-V in the same order as they appear on your tax return.
- Address - type in your address as it appears on your tax return.
- Payment - type in the amount of your payment and printthe Form PA-V. Make the check or money order payableto: PA DEPT OF REVENUE. Do not send cash.
- Mailing your payment -Please write (1) the last four digitsof your SSN, (2) "2013 PA-V", and (3) daytime telephonenumber on your check or money order. The departmentwill need the last four digits of your SSN if your checkbecomes separated from your Form PA-V. Carefullydetach your Form PA-V from the instructions. Do not staple your check or money order to the Form PA-V. Pleaseplace your Form PA-V and payment in an envelopewith your PA-40 tax return using the "Payment Enclosed" address provided in the mailing instructions beginning onthis page.
If you filed electronically, mail only your Form PA-V andpayment to the "Payment Enclosed" address provided in the mailing instructions on this page.
Paying Without a Form PA-V:
If you do not use the fill-in version of Form PA-V:
- Make your check or money order payable to: PA DEPTOF REVENUE.
- Write (1) your complete SSN, (2) "2013 PA-V", and (3) daytime telephone number on your check or money order. If you are filing a joint return, enter the complete SSN of the taxpayer shown first on your return. The department will need your complete SSN to more quickly and accurately apply your payment.
Do not staple your check or money order to your return. Please place your payment in an envelope with your PA-40 tax return using the "Payment Enclosed" address provided in the mailing instructions beginning on this page.
You can pay your PA taxes with a major credit card or a debit card. Credit card transactions are charged a 2.49 percent convenience fee ($1 minimum charge), and debit card transaction fees start at $3.95. You can use your American Express, Discover, MasterCard or Visa credit card to pay your taxes online or by phone. You may also use a MasterCard or Visa debit card to make payments online. Select one of these options to pay using your credit/debit card:
- Internet. Go to Official Payments Corporation at www.officialpayments.com .
- Telephone. Call 1-800-2PAYTAX (1-800-272-9829).
Electronic Funds Transfer:
You may also pay your 2013 PA tax due using electronic funds transfer by accessing the Revenue e-Services Center at www.revenue.state.pa.us. You will be prompted for your bank account information and the payment will be deducted from your account on the date you specify. There is no charge for using this option.
ORIGINAL AND AMENDED RETURN MAILING INSTRUCTIONS
The U.S. Postal Service returns envelopes without sufficient postage. If your tax return is more than five pages or in an oversized envelope, you may need additional postage. Check with your local Post Office. Please write your complete return address in the upper left corner of the envelope.
Follow these instructions for mailing your PA tax return: If you owe tax-You have an amount on Line 28, mail your return to:
If you owe tax - You have an amount on Line 28:
PA DEPT OF REVENUE
1 REVENUE PLACE
HARRISBURG PA 17129-0001
If you overpaid - You have an amount on Line 29:
PA DEPT OF REVENUE
REFUND OR CREDIT REQUESTED
3 REVENUE PLACE
HARRISBURG PA 17129-0003
If you neither owe nor overpaid - You have zeros on Lines 28 and 29:
PA DEPT OF REVENUE
NO PAYMENT OR NO REFUND
2 REVENUE PLACE
HARRISBURG PA 17129-0002
CAUTION! IMPORTANT: Do not use these mailing labels to send other correspondence to the department.
For all schedules, enter the complete name and SSN of the taxpayer reporting the income or claiming the expenses. If filing a schedule jointly, enter the complete name and SSN of the taxpayer listed first. Each taxpayer must submit a separate schedule for each separately owned business, profession or farm. You and your spouse may file these schedules jointly:
PA Schedules A, B and J - these schedules do not show any losses or expenses.
- You may no longer submit federal Schedule B even if you do not have any Capital Gains Distributions and your amounts are exactly the same for Pennsylvania. You must use PA Schedules A and B. Spouses must submit separate PA Schedules A and B unless all the income is joint income.
- You cannot submit a federal Schedule K-1 in lieu of PA Schedule J.
PA Schedule SP - see the instructions beginning on Page 33 for when to include this schedule.
PA Schedule O - see the instructions beginning on Page 33 for when to include this schedule.
FILING TIP: If a joint return including IRC Section 529 Qualified Tuition Program deductions for both taxpayers is filed, schedules reporting the income on a separate basis for each taxpayer should be included, so that the department may calculate the income limitations.
You and your spouse must file these schedules separately, each reporting only your own income, expenses and net income (losses):
PA Schedule UE - a separate schedule for each employer or job.
- You may only submit a federal Schedule 2106 when your unreimbursed travel expenses are the same for Pennsylvania and you do not have any miscellaneous expenses and/or are not using federal per-diem amounts for any overnight, meals or incidental expenses. PA Schedules C, C-EZ and F - separate schedules for each commercial activity, unless both own each of the businesses or farms jointly.
PA Schedules D - must submit a separate PA Schedule D for you and your spouse reporting income unless all the gains and losses are joint.
PA Schedules D-1 and D-71 - separate schedules for each taxpayer and each installment sale.
PA Schedule E - follow the instructions on the schedule. PA Schedules G-R (with G-S/G-L) and T - separate schedules for each taxpayer.
PA Schedule OC - a taxpayer and spouse must file separate PA-40 tax returns if one or both are claiming any credits on this schedule.
Reproducing PA Returns and Schedules: You may not prepare your own facsimile schedules as replacements for PA schedules. Also, if using the forms within the booklet, do not submit a photocopy of your PA-40 form.
Multiple Schedules: If you have multiple Schedules A, B, D, E, or J due to entriesbeyond the capacity of the forms, include the total income forthat form on one form only.