Pennsylvania PA Schedule A - Interest Income

PA Schedule A - Interest Income
2023 PA Schedule A - Interest Income (PA-20S/PA-65 A)
IMPORTANT: FILL IN FORM MUST BE DOWNLOADED ONTO YOUR COMPUTER PRIOR TO COMPLETING

PA SCHEDULE A
Interest Income

PA-20S/PA-65 A (DR) 04-23 (FI)
PA Department of Revenue

START

2308610050

2023

Name as shown on PA-20S/PA-65 Information Return

OFFICIAL USE ONLY

FEIN 9 DIGIT - NO DASH

➜

If a loss, enter "0"
1

Interest income from federal Schedule K

1

2

Less business or rental interest income (working capital) - report on PA-20S/PA-65 Schedule M, Part I

2

3

Adjusted federal interest income – subtract Line 2 from Line 1

3

4

Federal-exempt interest income taxable for PA PIT – itemize below

4

5

Other interest income not included on Line 3 and Line 4

5

6

Gross PA interest income – add Lines 3 through 5

6

7

PA-exempt interest income included on Line 6 – itemize below
PA-taxable interest income – subtract Line 7 from Line 6. Enter the result on the PA-20S/PA-65
Information Return, Page 1, Section III, Line 3.

7

8

8

Federal-exempt interest income – list sources and amounts

PA-exempt interest income – list sources and amounts

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2023
Instructions for PA-20S/PA-65 Schedule A

Interest Income

PA-20S/PA-65 A IN (DR) 04-23

GENERAL INFORMATION
PURPOSE OF SCHEDULE
Use PA-20S/PA-65 Schedule A to report interest income of
PA S corporations, partnerships and limited liability
companies filing as partnerships or PA S corporations for
federal income tax purposes. See PA Personal Income Tax
Guide – Interest.
The entity must report interest it received for the use of its
money that it does not include in another income class. Do
not report interest from obligations that are statutorily free
from Pennsylvania tax.
Interest reported on the PA-20S/PA-65 Information Return
and PA-20S/PA-65 Schedule A is total interest earned by the
entity itself. There is no need to distinguish between resident
and nonresident portions since interest is not a class of
income on the PA-20S/PA-65 Schedule NRK-1. For
Pennsylvania personal income tax purposes, nonresidents
are not taxed on ordinary interest from Pennsylvania
sources. Interest is ignored by the nonresident unless the
entity has reclassified interest on PA-20S/PA-65 Schedule M,
Part I and PA-20S/PA-65 Schedule A, Line 2 as working
capital, in which case it will be included with business or
rental income.
PENNSYLVANIA-TAXABLE INTEREST
Pennsylvania law (72 P.S. §7303(a)(6)) provides that interest
derived from obligations that are not statutorily free from
state or local taxation under any other act of the General
Assembly of the Commonwealth of Pennsylvania or under
the laws of the U.S. is taxable.
Include all interest income except:
● Interest derived from purchased money mortgages on
real estate or land contracts that the entity includes in
determining net gain (loss) from the sale, exchange or
disposition of property;
● Interest incidental to the production of rental or royalty
income that the entity includes in determining net rent
or royalty income;
● Interest that is statutorily free from Pennsylvania tax;
● Interest derived from assets employed as working
capital in a business; and
● Interest from accounts and notes receivable from sales
of products or services sold in the ordinary course of
business that the entity includes in determining net profit
(loss) from its business, profession or farm (generally
current assets).

A PA S corporation or partnership cannot assume that an
obligation that is exempt from federal income tax is also
exempt from Pennsylvania personal income tax. The
exclusion for U.S. tax-exempt obligations does not
automatically extend to those obligations whose sole
statutory basis for exclusion is the Internal Revenue Code.
The entity may only deduct forfeited interest penalties from
a premature withdrawal of a time deposit against the interest
income from that account or certificate. The PA S corporation
or partnership cannot offset such interest penalty against
other interest income. If the total penalty exceeds the interest
on an account or certificate, the entity can report the excess
as a loss on PA-20S/PA-65 Schedule D, Part I or PA-20S/
PA-65 Schedule D, Part III, Line 13.
For a listing of tax-exempt and taxable obligations, obtain
Pennsylvania form REV-1643, Tax-Exempt Obligations for
Pennsylvania Personal Income Tax Purposes.

COMPLETING PA SCHEDULE A
BUSINESS NAME
Enter the complete name of the entity or business as shown
on the PA-20S/PA-65 Information Return.
FEIN
Enter the nine-digit federal employer identification number
(FEIN) of the entity or business as shown on the PA-20S/
PA-65 Information Return.

LINE INSTRUCTIONS
LINE 1
INTEREST INCOME FROM FEDERAL SCHEDULE K
Enter the amount reported on federal Schedule K, Line 5
(federal Form 1065), or Line 4 (federal Form 1120S). This
number should also match PA-20S/PA-65 Schedule M, Part
I, Line 4, Column (a). Include federal Schedule K-1 interest
income from other entities.

LINE 2
LESS BUSINESS OR RENTAL INTEREST INCOME
(WORKING CAPITAL)
Enter the amount reported on PA-20S/PA-65 Schedule M,
Part I, Line 4, Column (b) and/or Column (f).

LINE 3
ADJUSTED FEDERAL INTEREST INCOME
Subtract Line 2 from Line 1. Enter the result on Line 3.

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LINE 4

LINE 7

FEDERAL-EXEMPT INTEREST INCOME TAXABLE FOR
PENNSYLVANIA PERSONAL INCOME TAX
Enter the tax-exempt interest income amount reported on
federal Schedule K, Line 18a (federal Form 1065), or Line
16a (federal Form 1120S), “Tax-exempt interest income.”
List the sources and amounts in the spaces provided on the
forms.

PENNSYLVANIA-EXEMPT INTEREST INCOME
INCLUDED ON LINE 6
Enter income reported as federal interest income that has
been taxed federally and is exempt for Pennsylvania
purposes. This number can be obtained from entity-level
books and records. Refer to Pennsylvania form REV-1643,
Tax-Exempt Obligations for Pennsylvania Personal Income
Tax Purposes. List the sources and amounts in the spaces
provided on the form.

LINE 5
OTHER INTEREST INCOME NOT INCLUDED ON LINE 3
AND LINE 4
If the entity received interest income reported on a line other
than federal 1065 Schedule K, Line 5, or federal 1120S
Schedule K, Line 4, then report as interest income for
Pennsylvania personal income tax purposes on PA-20S/
PA-65 Schedule A, Line 5.

LINE 8
PENNSYLVANIA-TAXABLE INTEREST INCOME
Subtract Line 7 from Line 6. Enter the result on Line 8. Enter
this amount on the PA-20S/PA-65 Information Return, Page 1,
Section III, Line 3.

LINE 6
GROSS PENNSYLVANIA INTEREST INCOME
Add Lines 3 through 5. Enter the result on Line 6.

2

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