Pennsylvania Personal Individual Tax Preparation Guide - For Form PA-40

Personal Individual Tax Preparation Guide - For Form PA-40
Personal Individual Tax Preparation Guide - For Personal Income Tax Returns PA-40 (DFO-02)
PERSONAL INCOME TAX
PREPARATION GUIDE

FOR PERSONAL INCOME TAX RETURNS
PA-40
DFO-02 (EX) 11-24

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PERSONAL INCOME TAX PREPARATION GUIDE

WHAT’S NEW
The Commonwealth of Pennsylvania has
partnered with the IRS this year to give you a new
option for filing your federal and state personal
income tax returns for free. Using the Direct File
online filing tool, qualifying taxpayers will first be
able to complete their 2024 federal tax returns
(Form 1040). Following that step, Direct File will
direct qualifying taxpayers to Pennsylvania’s state
income tax filing system, myPATH, where they will
be able to file and complete their 2024
Pennsylvania state returns (PA-40). For further
information on this new filing option, please visit
revenue.pa.gov.

•

•

Electronic Filing Option: Taxpayers can utilize our
online filing system to file their Pennsylvania personal
income tax returns for free. Visit mypath.pa.gov to
access the system, which also allows taxpayers to
make payments, view notices, update account
information and find the answers to frequently asked
questions. E-filing offers advantages not available to
taxpayers filing by paper, including error-reducing
automatic calculators; prompt confirmation of a
successful filing; faster refund processing and direct
deposit options.
A person may claim a deduction for depletion of a
mine, oil and gas well, and other natural deposits.
Please see PA-40 Schedule E for more
information.
The income threshold for when estimated
payments are required to be made is $9,500.

PURPOSE
The Personal Income Tax Preparation Guide’s
purpose is to provide preparers with additional
information and instructions for the preparation of
the PA-40, Personal Income Tax Return. Although
it may also be used by individual taxpayers who
prepare their own PA-40, the preparation guide
was written using language from a preparer’s
perspective.
Summary Stage
When the return(s) is/are completed, you will need
to give the taxpayer some additional information.
• Have the taxpayer sign and date the return. If
filing a paper return and the filing status on the
return is Married, Filing Jointly, make sure both
taxpayers sign the return. If one taxpayer is not

•

•

present, remind the taxpayer to have their
spouse sign the return.
If there is an overpayment and the taxpayer
plans to move, advise the taxpayer to notify
the local Department of Revenue district office
immediately to have the address updated. This
will ensure the refund is sent to the appropriate
address.
If a balance is due, advise the taxpayer of payment options. Payments may be remitted
directly from the myPATH homepage by visiting mypath.pa.gov and selecting the Make a
Payment hyperlink on the Payments Panel.
Taxpayers may also remit payments via check
or money order made payable to the PA Department of Revenue. Instruct taxpayers to
include the last four digits of their primary Social
Security Number (SSN) and tax year on the
memo line of the check or money order. If a
Form PA-40 V is not available from the software
used by the preparer or one is not prepared
from the Fill-In PA-40 V on the department’s
website, the department advises each taxpayer
to use the complete SSN on the check or
money order if faster clearing is desired and
more accurate posting of the check is preferred. Otherwise, it can take up to four weeks
for a check to clear if there is insufficient information such as taxpayer name, address, and
tax year on the check. In the event the department cannot determine the correct account for
posting of the check, the taxpayer’s account will
eventually be billed and additional correspondence will need to be addressed by the
taxpayer. If your volunteer site e-files returns
using special software, the taxpayer may be
able to remit the tax payment online. See PAYMENT OPTIONS beginning on Page 72 for
additional information.
If your location only prepares paper returns,
please advise the taxpayer that they can easily
enter the figures into the myPATH portal without
the need to create an account. This will ensure
faster and more secure processing of their
return. If the taxpayer prefers to send in the
paper return, instruct them to mail the return by
midnight on the due date, along with any
monies due.
If filing more than one tax return for a taxpayer,
advise the taxpayer to mail each return separately.
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• Ask if the taxpayer has any questions. Be sure
to return all tax materials to the taxpayer, and
give the taxpayer a copy of the filed return to
keep with their records.
• Thank the taxpayer and remember to respect
the taxpayer's privacy. Keep all tax information
confidential.

FEDERAL/STATE ELECTRONIC
FILING (e-file)
Taxpayers may file federal and PA income tax returns electronically, either through a tax preparer or
by purchasing software.

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the myPATH portal without the need to create
an account. Simply visit mypath.pa.gov and
select the option to 'Make a Payment". In
addition, payments can be scheduled to be
withdrawn via electronic funds transfer (EFT)
from the taxpayer's bank account at a later
date. The taxpayer may also choose to remit
payment via check or money order with Form
PA-40 V, Payment Voucher, which should be
mailed by midnight on the due date of the
return.

ADDITIONAL INFORMATION
FOR EROS

Volunteer Income Tax Assistance and Tax Counseling for the Elderly (VITA/TCE) sites that e-file
returns using special software should maintain
Form(s) PA-8453 or PA-8879 in their files unless requested to submit them to the department.

The department requires all PA electronic returns to
be accepted by the Internal Revenue Service (IRS).
Once accepted by the IRS, the ERO does not have
to register separately with the PA Department of
Revenue.

A PA-8453 is not required if a taxpayer signs the federal return with a federal self-select PIN and that PIN
is carried over to the PA return. If the practitioner’s
PIN is being used or someone else other than the
taxpayer is entering the taxpayer’s PIN on the federal return, PA-8879 must be signed. The PIN does
not need to be entered twice and can be carried over
from the federal return as long as the taxpayer understands they are signing both returns.

ACKNOWLEDGEMENT OF
PA ELECTRONIC RETURNS

The department also allows statements to be filed
electronically through the electronic return originators
(ERO) with the return. These statements describe
why certain income was or was not reported or why
a particular paper document is being retained by
the ERO (i.e. military orders, stipend, extension
form).
Electronic filing provides the following benefits:
• Accuracy. Computer programs catch mistakes
before they become problems.
• Acknowledgement. The department electronically notifies the preparer or ERO that the
return was received and accepted.
• Refunds. With electronic filing, the taxpayer
has the option to receive a refund via direct deposit. This service is not available when filing a
paper return.
• File Now, Pay Later. A return can be filed
anytime before the due date. If a tax is owed,
payments may be submitted directly through
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The Pennsylvania Department of Revenue will acknowledge the receipt of a return. However, the
acknowledgement system will now only inform a
taxpayer if a return was accepted or rejected. If a return is rejected, the rejection message will identify
the reject as a business rule or schema error only.
Refer to software instructions or contact the software representative for information regarding
responsibilities for accessing and retrieving state
acknowledgements.

ACCEPTED PENNSYLVANIA
FORMS/SCHEDULES
The following Pennsylvania forms may be transmitted electronically (refund, equal and balance
due, with or without payment) and payment must be
made by electronic funds withdrawal, check, money
order or credit card.
• Form PA-40 - Pennsylvania Individual Income
Tax Return (includes nonresident and Part-Year
Resident returns)
• PA Schedule A - Interest
• PA Schedule B - Dividends
• PA Schedule C - Profit or Loss From Business
or Profession
• PA Schedule D - Sale, Exchange or Disposition
of Property

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PERSONAL INCOME TAX PREPARATION GUIDE

• PA Schedule DC - Child and Dependent Care
Enhancement Tax Credit
• PA Schedule D-1 - Computation of Installment
Sale Income
• PA Schedule D-71 - Sale or Exchange of Property
Prior to June 1, 1971
• PA Schedule E - Rent, Royalty, Patent and
Copyright Income or Loss
• PA Schedule F - Farm Income and Expenses
• PA Schedule G-L - Out-of-State Credit, Long
Form
• PA Schedule J - Estate and Trust Income
• PA Schedule SP - Tax Forgiveness Credit
• PA Schedule RK-1- Resident Schedule of PA S
Shareholder/Partner Pass-Through Income,
Loss and Credits
• PA Schedule NRK-1- Nonresident Schedule of
PA S Shareholder/Partner Pass-Through
Income, Loss and Credits
• PA Schedule UE - Allowable Employee Business
Expenses
• PA Schedule OC
• PA Schedule O
• PA Schedule P
• PA Schedule T - Gambling and Lottery
Winnings
• PA REV-1630 - Underpayment of Estimated
Tax by Individuals
• PA REV-1630A - Underpayment of Estimated
Tax by Farmers
• PA Schedule 19 - Sale of a Principal Residence
• PA Schedule NRH - Apportioning Income by
Nonresident Individuals
• Schedule PA-40 X Amended Schedule
• W-2 Forms
• 1099-R Forms
• W-2G Forms
• REV-1882 - Health Insurance Coverage
Information Request
• REV-276 - Extension of Time to File
• REV-459B - Consent to Transfer, Adjust or
Correct PA Estimated Personal Income Tax
Account
• W-2 RW - PA W-2 Reconciliation Worksheet
NOTE: Federal K-1s are not supported in PA e-File
software. However, software packages that offer

PDF file attachments can include the federal K-1
and its related supporting statements via PDF with
the return if the income and losses from that K-1 are
also input into the return.

K-1 INCOME
The IRS and TaxAide expanded the scope of income that VITA/TCE volunteers deal with to include
certain K-1 income. This K-1 income includes:
• Interest income, including tax-exempt interest
• Dividend income
• Net short-term and net long-term capital gains
and losses
K-1s are schedules for individual shareholders,
partners or beneficiaries that show their distributed
portions of income that passed through the entities
to them at the individual level.
K-1s are received by any individual who is a shareholder in a corporation, a partner in a partnership or
a beneficiary receiving a share of income through
a trust. The individual owns a percentage of ownership in the corporation or partnership. When
dealing with trusts, the individual, also referred to as
the beneficiary, receives a certain percentage of
income through the trust.
Types of K-1s
• Federal Schedule K-1
Form 1120S: Given to taxpayers who are
shareholders in a corporation
If there is a Code A in Box 16 of the K-1,
review the statement that accompanies
federal Schedule K-1 to determine the
source of the tax-exempt interest. Refer
to the list of tax-exempt interest in your
Personal Income Tax Preparation Guide
to see whether or not the amount in Box
16 should be included in interest income.
Form 1065: Given to taxpayers who are
partners in a partnership
If there is a Code A in Box 18 of the K-1,
review the statement that accompanies
federal Schedule K-1 to determine the
source of the tax-exempt interest. Refer
to the list of tax-exempt interest in your
Personal Income Tax Preparation Guide
to see whether or not the amount in Box
18 should be included in interest income.
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PERSONAL INCOME TAX PREPARATION GUIDE

Form 1041: Given to taxpayers who are
beneficiaries of a trust
Federal Schedule K-1 can be utilized
when preparing returns for resident taxpayers.
Do not use federal Schedule K-1 for
nonresident taxpayers; a nonresident
taxpayer is only required to report
PA-source income and the federal
Schedule K-1 includes income earned
from sources inside and outside of PA.
PA Schedule RK-1: Resident K-1 given to
PA resident taxpayers who are shareholders
in a corporation, partners in a partnership,
or beneficiaries of a trust
PA Schedule NRK-1: Nonresident K-1
given to nonresident taxpayers who are
shareholders in a PA corporation, partners
in a PA partnership, or beneficiaries of a PA
trust. Must use this K-1 if filing return for a
nonresident; will only show taxpayer’s PAsource income from the corporation,
partnership, or trust.
REPORT K-1 INCOME ON
APPROPRIATE SCHEDULE
• Interest income from a K-1 should be reported
on Schedule A (Line 7).
• Dividend income from a K-1 should be reported
on Schedule B (Line 4).
• Net short-term/long-term capital gains or losses
from a K-1 should be reported on Schedule D
(Line 6).
NOTE: For trust K-1s, all positive income figures
should be added together (without deducting any
net losses from the combination of short/long-term
capital gains) and reported as trust income on PA
Schedule J, Income from Estates or Trusts, and on
Line 7 of the PA return.

EXCLUSIONS FROM
ELECTRONIC FILING
The following documents are excluded from Federal/State electronic filing:
• Non-calendar, fiscal year returns;
• Amended individual income tax returns for
years prior to 2021;
• Form PA-40 KOZ – PA Income Tax Keystone
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Opportunity Zone Return;
• Returns containing forms/schedules not listed
under federal forms; or “Accepted Pennsylvania
Forms/Schedules”.
NOTE: Electronic filing of Form PA-41 is only available through some paid preparers but is not
available by department or volunteer tax preparers.
Electronic filing of Form PA-20S/ PA65 S Corporation/Partnership Information Return is available
from most paid preparers but is not available by department employees or volunteer tax preparers.

CONTACT INFORMATION FOR
E-FILE INQUIRIES
The PA Department of Revenue has an email
([email protected]) for exclusive use by
EROs, transmitters and software developers
participating in the Federal/ State e-file program.
You may also fax information concerning electronically filed returns to the department using the
Personal Income Tax Correspondence Sheet, DEX93, which is also available from the Department of
Revenue’s website at revenue.pa.gov. The fax
cover sheet includes the proper fax numbers for
providing specific information regarding electronically filed returns. Using the fax cover sheet
enables the department to more quickly and accurately attach information to the correct taxpayer’s
return and further allows for faster turnaround times
for processing of taxpayer correspondence.
For a full explanation of the Federal/State e-file
program, please review the Pennsylvania Fed/State
E-file Handbook, REV-993. This booklet may be
downloaded from the Department of Revenue’s
website at revenue.pa.gov.

FORM PA-40 GENERAL
INSTRUCTIONS
Filing Due Date
The due date for filing the PA personal income tax return is the same due date as it is for federal income
tax returns.
Extension
A taxpayer may request an extension of time to file,
however this does not extend the payment deadline.

PERSONAL INCOME TAX PREPARATION GUIDE

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If the taxpayer anticipates a tax balance due, they
should submit payment with the extension request.

is domiciled and where he or she maintained a
permanent place of abode during the taxable year.

Extensions may be requested in various ways:
• The taxpayer can make an extension payment
via myPATH, which will automatically apply the
extension to the tax year (This feature does not
require a myPATH account).
• The taxpayer can submit Form REV-276, Application for Extension of Time to File, postmarked
on or before the April 15 due date.
• The taxpayer may submit a copy of a federally
approved extension of time to file with their
state return.
Extensions can also be submitted through Federal/
State Electronic Filing (e-file).

An individual’s domicile is their fixed and permanent
home to which they always have the intention of
returning whenever absent, even though they may
live elsewhere. An individual can have only one
state of domicile at any given time. Below are some
factors to consider when determining an individual’s
place of domicile:
• Where does the taxpayer spend the greatest
amount of time during the taxable year?
• Where does the taxpayer maintain a permanent
abode for the longest amount of time during the
taxable year?
• Where does the taxpayer support his or her
spouse and children?
• Where does the taxpayer purchase the necessities of life?
• Where does the taxpayer have doctors, lawyers
and accountants?
• Where does the taxpayer house his or her pets?
• Where does the taxpayer have active banking
accounts?
• Where does the taxpayer worship regularly?
• Where does the taxpayer participate in social,
fraternal or athletic organizations, lodges or
country clubs?
• Where does the taxpayer have works of art, expensive furniture, family portraits or heirlooms?
• Where does the taxpayer fulfill local tax
obligations?
• Where is the taxpayer employed?
• Where does the taxpayer own real estate fit for
year-round living?
• Where does the taxpayer maintain a driver's
license and vehicle registration?
• Where does the taxpayer maintain professional
licenses?
• Where does the taxpayer maintain union
membership?
• Where does the taxpayer declare residency for
fishing or hunting licenses, income tax returns
or school tuition?
• Where does the taxpayer conduct his or her
business?
• Where does the taxpayer receive mail?

An extension grants an individual an additional six
months to file a return. People outside the country
are automatically granted a two-month extension to
file by June 15.
Who must file?
Any PA resident, nonresident or part-year resident
who:
• Received total PA gross taxable income in
excess of $33 during the tax year, even if no tax
is due; and/or
• Incurred a loss from any transaction as an individual, sole proprietor, partner in a partnership
or PA S corporation shareholder.
Minors. PA law does not exempt a minor from the
above requirements to file a PA tax return even
if the minor is claimed as a dependent on a federal
return. A parent must file a return on behalf of the
minor child in such circumstances.
Decedents. The executor, administrator or other
person responsible for the affairs of a decedent
must file a PA tax return on behalf of the decedent
if the decedent could not or did not elect to file a
joint return with a surviving spouse.
Determining Residency
An individual may have to pay income tax as a PA
resident even if he or she is not considered a PA
resident for other purposes. For income tax purposes, one must consider both where he or she

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• Where does the taxpayer receive unemployment?
• Where does the taxpayer record his or her address
for insurance policies, deeds, mortgages, leases,
passport, federal and local tax returns, etc.?
• Where was the taxpayer domiciled at birth?
• Where does the taxpayer maintain safe deposit
boxes?
• Where does the taxpayer own a cemetery plot?
• Where is the taxpayer listed in the telephone
directory?
• Where has the taxpayer obtained a homestead
exemption?
• Where does the taxpayer gather for family and
social events?
• Where is the taxpayer registered to vote?
In order to establish a new domicile, the following
three conditions must be met:
• There must be evidence of a firm and definite
present intention to discontinue making the former domicile one’s primary base of operations;
• There must be evidence of a firm and definite
present intention to make the new domicile one’s
primary base of operations; and
• There must be evidence of actual physical presence and actual abode (transient, temporary or
permanent) in the new location.
If all three requirements are met, the date of the
change is the first day of actual physical presence in
the new location.
If an individual left their domicile to seek new
employment and intended to remain in the other
location only if they were to find employment, there
is no change in domicile.
Once established in a locality or state, the domicile
continues there until a new one is established. It is
not dependent upon continuous physical presence.
It is not abandoned by absence or even by presence
in a former domicile, no matter how long continued,
if, in leaving and during the absence, there is not
firm, sincere, unconditional intention of remaining in
the other jurisdiction for an indefinite and uncertain
period.
For example, temporary absence from a new domicile in a former domicile for the purpose of transacting
business or for the sake of health, pleasure, or eduPage 6

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cation, with a definite intention of returning to the new
domicile does not affect a person's domiciliary status.
A retired couple with two permanent homes, one inside Pennsylvania and one outside of Pennsylvania,
can only have one state of domicile. The state of
domicile does not change until there is a move to
another state or country with the sincere intention
of making a "new" permanent home there and abandoning the previous domicile. The determination as
to their state of domicile should be made based on
the factors above.
A permanent abode is a house, apartment, dwelling
place or other residence an individual maintains as
his or her household for an indefinite period, whether
he or she owns it or not. An abode is not permanent
if it is occupied only during a fixed or limited period
of time for a particular purpose. Barracks, bachelor
officer's quarters, quarters on ships and other living
accommodations provided by one’s employer for a
definite period do not qualify as permanent dwelling
places; nor do college dormitories, fraternity houses,
sorority houses and off campus rentals by enrolled
college students qualify as a permanent abode.
PA Resident
Residency in Pennsylvania, for tax purposes, may
be established in two ways:
Domicile in Pennsylvania: If an individual is
domiciled in Pennsylvania, he or she is considered a resident unless he or she meets all three
of the following conditions:
• He or she did not maintain a permanent
abode in Pennsylvania for themselves or
their family;
• He or she did maintain a permanent abode
outside Pennsylvania throughout the entire
taxable year; and
• He or she did not spend in the aggregate
more than 30 days of the taxable year in
Pennsylvania.
Day Test: If an individual maintains a permanent
abode in Pennsylvania and spends a total of 183
days or more of the taxable year in Pennsylvania,
even though he or she is not domiciled in the
commonwealth, he or she is considered a
resident.

PERSONAL INCOME TAX PREPARATION GUIDE

Nonresident
An individual is a nonresident for PA tax purposes
if they are not a resident as defined above.
After determining the location with the greatest
connection, it is necessary to see if a new domicile
outside of Pennsylvania has been established.
Part-Year Resident
A part-year resident is an individual who moved to
or from Pennsylvania during the taxable year with
the intent of permanently changing domiciles. A
person moving into Pennsylvania, with the intent of
residing here permanently, becomes a resident on
the first day he or she is actually, physically present
in the Commonwealth, regardless of reason or
housing arrangement (such as employer provided
housing, living with relatives, etc).
Persons in the Military or Foreign Service
Unless there is an intention to change domiciles, a
person generally neither acquires a new domicile by
entering the armed forces nor loses the domicile
that the person had upon entering. A person on military duty is not prohibited, however, from acquiring
a new domicile where his or her family is stationed.
A person in the military and foreign service, or living in a foreign country for other than a temporary
or transitory purpose while a lawful permanent
resident or citizen of the country, is treated as a
domiciliary of that country if the person:
• Is not an employee of the U.S., its agencies or
instrumentalities (including members of the
armed forces and career appointees in the U.S.
foreign service); and
• Does not hold an appointive office in the executive branch of the government of the U.S.
However, special rules may apply if the employee
or officer maintains a permanent place of abode
there. An individual who is domiciled in Pennsylvania is considered a nonresident if he or she meets
all three of the requirements listed in the prior
sections on Pennsylvania residency and domicile.
College Student
Generally, a child has the same domicile as his or
her parents or legal guardian. Becoming a legal
adult does not by itself separate a child from the
parent or legal guardian’s domicile. The child
merely acquires the power to establish a separate
or new domicile.

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If you are a PA resident college student attending
school outside Pennsylvania or a nonresident college student attending school within Pennsylvania,
see the PA Personal Income Tax Guide – Brief
Overview and Filing Requirements for Pennsylvania Personal Income Tax Returns section found on
the department’s website for more information.
Minor Child
The domicile of a minor child is the same as the
domicile of the child's parents. If the parents are
separated, the child's domicile is the domicile of the
parent with whom the child lives or that of the child's
legal guardian.
Dual Residency
A dual resident is an individual who is considered a
resident of two states for taxing purposes. If an individual is a dual resident, he or she should report
the income that was earned during the taxable year
from sources both within and outside of PA on both
states tax returns. This individual would then
request a resident credit for income sourced to the
state of statutory residence in the state that they are
domiciled in.
NOTE: Special rules apply for PA residents working
in states with reciprocal tax agreements with
Pennsylvania: Indiana, Maryland, New Jersey,
Ohio, Virginia or West Virginia. If a taxpayer is a PA
resident and also a resident of a reciprocal state,
for income tax purposes they may claim the PA
resident credit. The reciprocal agreement with
these states is not applicable since the taxpayer is
subject to tax as a resident in both Pennsylvania
and the other state. The taxpayer must file PA
Schedule G-L for each state for which a resident
credit is being requested and enclose a copy of the
resident tax return filed with the other state. This
documentation will serve as proof that the other
state taxed him/her as a resident in that state and
did not allow a credit for tax paid to PA.
For example, Dan is a domiciliary of Pennsylvania
for the entire taxable year. He leased an apartment
in Maryland and worked 230 days in Maryland.
Maryland considers Dan to be a Maryland resident
for income tax purposes. He earned $10,000 in
compensation for working in Maryland. Dan must
report his compensation as PA-taxable income.
Because he is a PA domiciliary, Dan may claim the
PA resident credit for taxes paid to Maryland as long
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as he does not claim a credit on his Maryland return
for taxes paid to PA.
How Residents are Taxed
A PA resident is taxed on all taxable income received
from sources inside and outside Pennsylvania.
A PA resident may claim a resident credit for any tax
imposed by and paid to other states based upon
income which is not from Pennsylvania sources and
is subject to PA personal income tax. The PA
Schedule G-L must be completed to claim this
credit.
How Nonresidents are Taxed
Nonresidents are taxed on the following types of
income derived from sources within Pennsylvania:
• Compensation
Pennsylvania taxes nonresidents on compensation for services performed in Pennsylvania,
unless the taxpayer is a resident of one of the
reciprocal agreement states.
• Net Income or Loss from the Operation of a
Business, Profession or Farm
Pennsylvania taxes nonresident owners on all
allocated, or apportioned, income from the operation of a business entity in Pennsylvania. If an
individual derives income from sources inside
and outside Pennsylvania, separate accounts
and records that clearly reflect the PA business
activity should be maintained. Otherwise, that individual must file PA Schedule NRH to apportion
the income.
• Net Income or Loss from the Sale,
Exchange or Disposition of Property
Pennsylvania taxes nonresidents on the gain
from the sale of any real or tangible personal
property located in Pennsylvania. Pennsylvania
does not tax nonresidents on the gain from the
disposition of intangible property nor allow the
use of any loss from such a disposition to reduce other PA taxable gains. If a taxpayer sells
property in his or her former state before moving into Pennsylvania, no gain or loss on that
sale is reportable to PA. However, if the taxpayer moved from Pennsylvania to another
state and then sold property or any other tangible property in Pennsylvania, the gain must
be reported.
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• Income or Loss from Rents, Royalties,
Patents and Copyrights
Pennsylvania taxes nonresidents on the net
income from the use of property located or used
in Pennsylvania.
• Interest on Installment Sales
Pennsylvania taxes nonresidents on interest
from Installment Sales as PA Schedule D-1
Income.
• Interest on Business Accounts
Pennsylvania taxes nonresidents on interest on
business accounts such as accounts receivable
or a business checking account that is included
in business income.
• Mortgage or Security Interests
Pennsylvania taxes nonresidents on mortgage
or security interests on installment sales that are
reported as such utilizing PA Schedule D-1. If
PA Schedule D-1 is not used and the entire
gain is reported in the year sold, interest on an
installment sale is not subject to tax.
• Intangible Personal Property
Pennsylvania taxes nonresidents on intangible
personal property employed in a trade, profession, occupation or business carried on in
Pennsylvania. The nonresident taxpayer does
not report such a sale on a PA Schedule D, but
includes the gain (loss) in determining net income or loss from the operation of a business,
profession or farm.
• Estate or Trust Income
Pennsylvania taxes nonresident beneficiaries
on income from an estate or trust only to the extent the PA-source income to the beneficiaries
is taxable to nonresidents.
• Gambling and Lottery Winnings
Pennsylvania taxes nonresidents on gambling
and Lottery winnings by reason of a wager
placed in this commonwealth, the conduct of
a game of chance or other gambling activity located in this commonwealth or the redemption
of a Lottery prize from a Lottery conducted in
this commonwealth, other than noncash prizes
of the Pennsylvania Lottery. Nonresidents are
not subject to PA taxes on gambling or Lottery
winnings, by reason of a wager placed outside
this commonwealth, the conduct of a game of

PERSONAL INCOME TAX PREPARATION GUIDE

chance or other gambling activity is located outside this commonwealth or the redemption of a
Lottery prize from a Lottery conducted outside
this commonwealth.
NOTE: Nonresidents are not subject to PA tax on
ordinary interest and dividends from investments or
gains realized on the sale, exchange or disposition of
intangible property. Losses on the sale of intangible
property may not be used to offset any taxable gain.
Apportioning PA Taxable Income
A nonresident employee who performs services
inside and outside Pennsylvania is subject to PA
personal income tax on the net compensation for
services performed within Pennsylvania. Usually
the employer will allocate and separately report on
federal Form W-2, Wage and Tax Statement, the PA
gross compensation.
If the employer did not report PA gross compensation on the W-2; or reported an incorrect amount as
PA gross compensation on the W-2; or the taxpayer
incurred unreimbursed employee business expenses
in earning or receiving PA gross compensation, PA
Schedule NRH, Compensation Apportionment, must
be completed.
A separate schedule must be completed for each
employer for whom services within and outside
Pennsylvania were performed.
If a nonresident taxpayer has income from a business, profession or farm derived from sources both
within and outside Pennsylvania and has records
and accounts that accurately reflect the income from
Pennsylvania, he or she should report as PA taxable
income those amounts based on these accounts and
records. If the accounts and records do not clearly
reflect the PA-source income, the section titled Net
Profits from Business or Farm Apportionment Formula on PA Schedule NRH must be completed.
EXCEPTION: Residents of a Reciprocal State
Residents of Indiana, Maryland, New Jersey, Ohio,
Virginia or West Virginia are not subject to tax on
compensation for services performed inside Pennsylvania on which federal withholding is required,
such as wages and salaries. However, if an Ohio
resident holds 20 percent or more share interest in
a subchapter S corporation and receives wages or
salary from that corporation, he or she will be subject to PA income tax on the wages or salary from

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said subchapter S corporation. This exception does
not apply to income reported as compensation such
as executor fees on which there is no federal withholding requirement, nor does it apply to any other
class of income.
Residents of these states must file Form REV-419,
Employee’s Nonwithholding Application Certificate,
with their PA employers to be exempt from having
PA tax withheld. In this situation, the PA employer
should withhold and remit tax to the employee’s
state of residency.
A resident of one of these reciprocal states whose
employer withheld PA income tax must file Form
PA-40 reflecting no compensation on Line 1a and
the PA tax withheld on Line 13. In addition, a signed
copy of the other state’s resident income tax return
(without any supporting documents) along with a
copy of the actual W-2 and a statement that the
taxpayer was a resident of a reciprocal state must
be submitted.
A PA resident working in one of these reciprocal
states should request to his or her employer that they
withhold PA income tax. If the employer withholds the
tax for the reciprocal state, the taxpayer must file for
a refund from that state. If the PA resident expects to
receive income of $9,500 or more for 2024, and the
employer does not withhold PA income tax, the individual is required to make quarterly estimated
payments. Failure to make these payments will result in an assessment of estimated underpayment
penalty.
How Part-Year Residents are Taxed
A part-year resident is subject to PA personal income tax as a resident for the portion of the year
they resided in Pennsylvania. The same taxpayer is
subject to PA personal income tax as a nonresident
for the remaining portion of the year if he or she
continues to work in Pennsylvania unless he or
she becomes a resident of a reciprocal state.
Members of Partnerships and
Subchapter S Corporations
A partner of a partnership or a shareholder in a subchapter S corporation must report his or her share
of income, whether it was distributed or not. The income or loss from the partnership or subchapter S
corporation must be reported in the same class
from which the partnership or subchapter S corpoPage 9

PERSONAL INCOME TAX PREPARATION GUIDE

ration received the income. A line is provided on PA
Schedules A, B, D, E and J specifically for partnership or subchapter S corporation income. Ordinary
business income, farm income, dividends, interest
and rental income should be added to any similar
class of income and included on the appropriate line
of Form PA-40. Composite returns can be filed on
behalf of the nonresident shareholders or partners.
Sometimes an individual partner or shareholder
pays an expense of a partnership or subchapter S
corporation, such as interest expense. In this case,
the individual may deduct the expense from their income only if the partnership agreement or articles
of incorporation require that the member or shareholder pay the business or rental expenses out of
his or her personal assets. These expenses must
be noted on a separate attachment and do not relate to any existing schedule.
Do not add health care benefits to the PA wages of
shareholder-employees of PA S corporations as
long as the plan is non-discriminatory, even though
such benefits must be added to federal wages.
Each partner in a business, profession or farm must
attach to Form PA-40 a copy of the PA-20S/PA-65
RK-1 for residents or PA-20S/PA-65 NRK-1 for nonresidents. A separate PA-20S/PA-65 RK-1/NRK-1
must be submitted for each partnership in which the
taxpayer is a partner. If a partnership fails to provide
such forms, the taxpayer must attach a copy of the
federal Schedule K-1 and classify the income or
loss according to PA instructions for that class.
Each shareholder in a PA S corporation must attach
to Form PA-40 a copy of PA-20S/PA-65 RK-1 for
residents or PA-20S/PA-65 NRK-1 for nonresidents.
A separate PA-20S/PA-65 RK-1/NRK-1 must be
submitted for each PA S corporation in which the
taxpayer is a shareholder.
A PA return must be filed even if the PA-20S/PA-65
RK-1 or PA-20S/PA-65 NRK-1 shows a loss.
Members of the Armed Forces and Nonmilitary
Persons on Federal Active Service
For PA personal income tax purposes, armed forces
include the Army, Navy, Air Force, Marine Corps
and Coast Guard. They do not include the Merchant
Marines, Public Health Service or National Oceanic
and Atmospheric Administration, except if/when
any of these are incorporated into the armed forces
in times of war or emergency. Further, civilian
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employees for the Department of Defense, such as
teachers and subcontractor employees, are not
considered members of the armed forces.
Resident Members of the Armed Forces
Compensation earned by residents of Pennsylvania
in the armed forces serving on federal active duty
outside Pennsylvania is not taxable as compensation in Pennsylvania. This includes housing
allowances and a reserve unit's two-week summer
training. Military pay -- including housing allowances
received by a PA resident while not on federal active
duty or not on federal active duty training -- is fully
taxable regardless of where the military service is
performed. For example, all income received for inactive duty while attending weekend drills is taxable.
Also, compensation earned by a PA resident for
military service on active duty in Pennsylvania is
subject to personal income tax. Under Act 182 of
2006, PA residents called to active military duty for
disaster relief of emergency management assistance inside or outside of Pennsylvania are exempt
from taxation on the compensation paid to them by
either the U.S. government or the commonwealth.
The taxpayer has the burden of establishing that income received for military service outside the
commonwealth was earned while on federal active
duty. The Department of Revenue will accept as
proof the authority section of the military orders directing the taxpayer to federal active duty outside
the commonwealth. If authority for the active duty is
based upon a federal statute, such as 32 U.S.C. §§
316, 502, 503, 504 or 505, federal active duty will be
presumed and the income is excludable from taxable compensation. To exclude income from serving
on active duty in the military outside of the commonwealth, residents must file a PA personal
income tax return and include their military W-2
Forms and copies of their orders as evidence of active duty military pay earned outside Pennsylvania.
If PA tax was withheld for active duty service outside
the commonwealth, the taxpayer will be given a full
refund of their withholding. If a portion of the military
service is active and a portion inactive, the taxpayer
should provide documentation that gives a detailed
breakdown of active duty pay while outside of the
commonwealth, combat zone pay (if applicable)
and all other military compensation. The sum of
these items must equal the reportable wages shown
in Box 16 of the individual's military W-2 Form. In ad-

PERSONAL INCOME TAX PREPARATION GUIDE

dition, the documentation must state the dates during which each component of compensation was
received and must include a copy of the individual's
military orders ordering him or her to a combat zone
and/or placing him or her on active duty as a member of the U.S. armed forces at a military facility
outside the commonwealth during the year. A W-2
Form that identifies income as active duty pay is not
sufficient because it does not explain where the active duty occurred. The taxpayer may reduce the
amount of reportable military compensation on Line
1a of his or her Form PA-40 by the sum of the compensation received as combat zone pay and/or
active duty pay received as a member of the U.S.
armed forces outside the commonwealth. If authority for active duty is based upon a PA statute, such
as 51 P.S. §§ 508 or 3102, state active duty will be
presumed and the income received is taxable.
Nonresident Members of the Armed Forces
Nonresident military personnel who are serving on
federal active duty in Pennsylvania in compliance
with military or naval orders are exempt from PA
personal income tax on their military pay and housing allowances because of federal law. They and
their family members are, however, subject to tax
on any other PA-source income normally taxable to
nonresidents.
National Guardsmen and U.S. Reservists
National Guardsmen and U.S. Reservists ordered
to active duty for training at a two-week summer
encampment pursuant to Title 10 or Title 73 of the
U.S. Code are presumed to be on federal active
duty. Military pay received for such service is
excludable from taxable compensation provided
the active duty training is performed outside the
commonwealth. In addition, scholarships or remuneration received by cadets and midshipmen at
U.S. military academies is not taxable because
none of these academies are within Pennsylvania
and such individuals are on federal active duty.
When a civilian employer either makes up the difference in a National Guard member's or U.S.
Reservist's regular wages or continues full pay for
the Guardsman or Reservist during the term of active duty, the differential or full pay continuation is
considered taxable compensation. The Heroes
Earnings Assistance and Relief Tax Act (HEART) of
2008 is an exception to this. If the differential pay is

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earned while in a combat zone or hazardous duty
zone, the income is not taxable.
A full-time member of the PA National Guard is
taxed on all of the following components of military
compensation:
• Inactive state duty pay received for services
both within and outside the commonwealth;
• Inactive federal duty pay received for services
as a member of the U.S. armed forces both
within and outside the commonwealth;
• Active federal duty pay received for services
within the commonwealth, unless called to active military duty for disaster relief of emergency
management assistance; and
• Active state duty pay received for services both
within and outside the commonwealth, unless
called to active military duty for disaster relief of
emergency management assistance.
Nonmilitary Persons on Federal Active Service
A PA resident on federal active duty outside Pennsylvania is subject to tax on his or her compensation.
NOTE: A PA resident in the U.S. foreign service is
not on active duty for PA purposes, and his or her
compensation is subject to tax.
Members of the Merchant Marines, Employees
of the U.S. Public Health Service and National
Oceanic and Atmospheric Administration
PA residents serving in the Merchant Marines, the
U.S. Public Health Service, the National Oceanic
and Atmospheric Administration or contractors
working in foreign countries, are subject to tax on
compensation whether earned within or outside PA
unless the U.S. President declares them by Executive Order to be military service during times of
war or national emergency. Also included in this
category are those individuals who are employed by
the Department of Defense as school teachers.
They are not covered under the Soldiers’ and
Sailors’ Civil Relief Act as they are civilian employees of the Department of Defense and not
members of the armed forces.
Servicemembers Civil Relief Act
The Servicemembers Civil Relief Act (SCRA) affects the treatment of residency and income for
spouses of military personnel for state and local tax
purposes for tax year 2023 and after.
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PERSONAL INCOME TAX PREPARATION GUIDE

The SCRA permits a servicemember’s nonmilitary
spouse to source any nonmilitary compensation to
the chosen state of residence as described in the
updated Personal Income Tax Bulletin 2024-02,
Servicemembers Civil Relief Act Domicile/Residency and Compensation Rules for Pennsylvania
Personal Income Tax Purposes and the following
sections.
Conversely, if a Pennsylvania resident servicemember is serving outside Pennsylvania and their
nonmilitary spouse earns income in that other state
– and the spouse claims relief under the SCRA – the
spouse’s income is only taxable to Pennsylvania.
Taxpayers claiming relief under SCRA and a refund
of Pennsylvania income tax withheld, in addition to
a standard personal income tax return and appropriate schedules, must provide the following:
• A copy of the servicemember’s current military
orders showing the order to serve in Pennsylvania;
• A copy of the servicemember’s military identification card;
• A copy of the nonmilitary spouse’s driver’s license from the resident state;
• A copy of the nonmilitary spouse’s W-2, issued
by the employer;
• A copy of the nonmilitary spouse’s tax return
filed for the resident state;
• A copy of the nonmilitary spouse’s military ID
card, identifying the card-holder as the spouse;
and
• A copy of the servicemember’s federal Department of Defense Form 2058, State of Legal
Residence Certificate.
Taxpayers filing electronically should attach these
documents to their e-filed return as a PDF. If this is
not an option, supporting documentation should be
emailed or faxed into the department using the
DEX-93 "Individual Tax Correspondence Sheet" as
the cover page within two to three days of e-filing.
Those filing paper returns should write “SCRA”
across the top of Page 1 of the PA-40.
The nonmilitary spouse of a servicemember whose
wages/salary is exempt from Pennsylvania
personal income tax under SCRA should file a
Pennsylvania Form REV-419, Employee’s
Nonwithholding Application Certificate, with their
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Pennsylvania employer, claiming exemption from
Pennsylvania income tax withholding.
Combat Zones
Combat zone pay received by a U.S. servicemember is not taxable for PA personal income tax
purposes (see Title 72 P.S. § 7301(d)(vii)), nor is it
considered poverty income for purposes of the special tax forgiveness provisions (see Title 72 P.S. §
7301 (o.2)(vii)).
For PA personal income tax purposes, combat
zones are areas designated by the U.S. President.
PA National Guard members and U.S. Reservists
are U.S. servicemembers while they are serving in
a combat zone for purposes of this exclusion. The
$500 combat zone pay exclusion limit for military
officers contained in the Internal Revenue Code is
not in the state taxing statute. Refer to irs.gov for
a listing of current combat zones.
PA residents serving in combat zones or qualified
hazardous duty areas designated by the U.S. President are given the same additional time to file their
PA personal income tax returns and make payments as allowed for federal income tax purposes.
The deadline is automatically extended to 180 days
from the last day of service or the last day of continuous hospitalization for injuries incurred in one of
these areas. Print “Combat Zone” at the top of the
return and mail it along with the military orders to:
REGARDING COMBAT ZONE
PA DEPARTMENT OF REVENUE
BUREAU OF INDIVIDUAL TAXES
PO BOX 280600
HARRISBURG PA 17128-0600
If the return is filed electronically, a copy of the
military orders must still be submitted. The orders
can be attached to the e-filed return as a PDF file,
faxed into the department using the DEX-93,
Personal Income Tax Correspondence Sheet, or
mailed to the address below. If faxing or mailing,
print "Combat Zone" at the top of the orders.
REGARDING COMBAT ZONE
PA DEPARTMENT OF REVENUE
ELECTRONIC FILING SECTION
PO BOX 280507
HARRISBURG PA 17128-0507

PERSONAL INCOME TAX PREPARATION GUIDE

Retirement Income
Retired or retainer pay of a member or former
member of a uniform service calculated under
Chapter 71 of Title 10, U.S. Code (as amended) is
not taxable for PA personal income tax purposes.
Taxable Income Classes
PA personal income tax is levied at a flat rate on
eight separate classes of income:
• Compensation
• Interest
• Dividends and Capital Gains Distributions
• Net Income or Loss from the Operation of a
Business, Profession or Farm
• Net Gains or Loss from Sale, Exchange or Disposition of Property
• Net Income or Loss from Rents, Royalties,
Patents or Copyrights
• Estate or Trust Income
• Gambling and Lottery Winnings
Gains and Losses
A gain in one class of taxable income cannot be offset against a loss in any other class of taxable
income, nor may gains or losses be carried back or
forward to another tax year. If a taxpayer has a net
loss on lines 4, 5 or 6, enter the amount of the loss
on the appropriate line on Form PA-40; use the actual dollar figure and fill in the oval indicating loss for
that category. A completed schedule must be submitted even if the taxpayer incurred a loss in a
class of income. A spouse may only offset losses
against his or her own profit/gain/income. A spouse
may not offset a loss against the other spouse's
profit or gain. However, if both spouses jointly own
a business which incurred a loss, they may each
take their share of the loss against their other business gains.
Joint Income
If two or more persons, such as a taxpayer and
spouse, own income-producing property -including real estate, savings accounts or stock -as joint tenants, tenants by the entirety or tenants
in common, each person must report their
proportional share of income from the property,
even if only one Social Security number and name
appears on the statement. Generally, such income
is divided equally between the owners.

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In the case where a taxpayer and spouse and a
third party own real estate, such as parents and a
son or daughter, the taxpayer and spouse are jointly
liable for one-half of any gain on the sale, and the
child is liable for the other half (unless the deed stipulates that the property is held as tenants in
common). However, for any other property, such as
bank accounts, each individual person is considered an equal owner. In the case of ownership by
a taxpayer and spouse and a child appearing as
owners on a bank account, each would be liable for
one-third of the interest earned.

INSTRUCTIONS FOR PREPARING
FORM PA-40
If filling out a paper Form PA-40, be sure to fill in all
requested information by typing or printing legibly.
Only taxpayers who request a PA-40 book will have
a book mailed to them.
The Department of Revenue uses electronic data
imaging to enter tax returns into its computer system. Follow these instructions for entering Social
Security numbers, names, addresses and amounts
to help ensure personal income tax returns are
processed accurately and quickly.
• 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 the taxpayer’s name – last, first, middle initial and suffix on the correct lines.
• Print the taxpayer’s correct address.
• Print the taxpayer’s apartment number, suite
number, room number, rural route, floor, etc on
the first line.
• Print the taxpayer’s PO Box on the second line.
• Fill in all appropriate ovals completely.
• Show money amounts in whole dollars. Eliminate any amount less than $0.50 and increase
any amount between $0.50 and $0.99 to the
next highest dollar.
• Prepare a copy for the taxpayer’s records before submitting.
If the name, address or city begins with Mc, Van, O’,
etc, do not enter a space or a punctuation mark.
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PERSONAL INCOME TAX PREPARATION GUIDE

There are two lines to enter the address. Use the
postal format of apartment number, suite, room
number, rural route, box number, floor, etc. on the
first line and the street address on the second line.
If there is only a street address, it may be entered
on either line.
There are ovals present for “Extension”, “Amended
Return”, “Residency Status”, “Filing Status”, “Farmers” and losses in certain income categories. If any
of these apply, the oval(s) must be filled in completely. Do not use an X or a check mark. Also note
that the form PA-40 is two pages. Do not forget to
complete both pages.
Social Security Number
The taxpayer's correct Social Security number
(SSN) must be verified and matched against the
state copy of the Wage and Tax Statement, the W2 Form. If a W-2 Form has an incorrect SSN, the
taxpayer must obtain a corrected W-2 Form (Form
W-2C) from his or her employer.
Returns completed for married taxpayers, even if filing Married, Filing Separately, must include the
SSN of both spouses. You must enter the entire
SSN for the taxpayer and spouse (if applicable). If
part of the SSNs are not provided, it can cause delays in the processing of the return.
NOTE: By law (42 U.S.C. Sec. 405(c)(2)(C)(i); 61
Pa. Code Sec. 117.16) the PA Department of Revenue has the authority to use the SSN to
administer PA tax laws to identify taxpayers and
their incomes. PA law does prohibit the commonwealth from disclosing information individuals
provide on income tax returns, including SSNs, except for official purposes.
Name
The complete name of the taxpayer must be entered. If completing a joint return, the spouse's first
name must also be included. If a taxpayer and
spouse use different last names, the person entering his or her name as the spouse must enter the
last name he or she is using in the blocks designated as “Spouse’s Last Name”. Do not enter
anything in these blocks if the taxpayer and spouse
use the same last name. If filing a joint return with a
deceased taxpayer, the surviving spouse enters
their name first. If both taxpayer and spouse are dePage 14

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ceased and filing a joint return, enter the name of the
primary taxpayer from the previous tax year first.
Address
The address must be the current mailing address of
the taxpayer. If using a military address, the APO or
FPO address should be used.
To complete a foreign address for a taxpayer that is
out of the country, use the following guidelines:
enter the name(s) in the spaces provided; write the
first and second line of the address in the First Line
of Address spaces; write the state/province, if one
exists, and then the foreign postal number (ZIP
code equivalent), separated by a comma (do not
abbreviate on this line), in the Second Line of Address spaces; leave the State and ZIP code spaces
blank; write the two-character code for the country
in the Country Code spaces. Codes can be found
at https://www.irs.gov/e-file-providers/foreigncountry-code-listing-for-modernized-e-file.
Country Code
A taxpayer with an address within the U.S. is not
required to complete this field. See the address
instructions above to obtain a two-character
country code.
Daytime Telephone Number
Provide a telephone number where the taxpayer
can be reached during the day.
School Code and School District Name
The five-digit code and name of the school district
where the taxpayer lived on Dec. 31 of the tax year
must be entered. If the taxpayer was a nonresident
of Pennsylvania on the last day of the tax year,
enter 99999 in the school code area. If the taxpayer
died during the tax year, enter the information
applicable at the time of death. This information
must be entered. Using an incorrect school code
may affect the school district’s funding. Failure to
enter this information may delay the processing of
the return and delay the issuance of any refund.
Some examples of what to consider when entering
the school code on a return are as follows:
• Any military personnel should use the school
code for the domicile of their spouse (if the
spouse lives in Pennsylvania), parents (if entering the military while domiciled in Pennsylvania),
or the code for the school district in which they

PERSONAL INCOME TAX PREPARATION GUIDE

•

•

•

•

•

•

•

lived while on federal active military duty while
stationed in Pennsylvania (if a PA resident).
A person residing in a nursing home or other
care facility who plans to return to their principal
residence after a temporary stay in such facilities should enter the school code for the
physical address of their principal residence
and not the nursing home or care facility.
A person who resides in a nursing home or
care facility on a permanent basis and has
made the decision to do so (assuming mentally
capable to make this decision) should use the
school code for the physical address of the
nursing home or care facility.
A PA resident attending college inside or outside
Pennsylvania should use the school code for
the physical address of the domicile or primary residence of their parents.
A nonresident or part-year resident who did not
reside in the state as of Dec. 31 of the tax year
should enter 99999 in the school code field.
A part-year resident who resided in Pennsylvania as of Dec. 31 of the tax year should enter
the school code of the physical address of their
domicile or primary residence on Dec. 31.
A person who uses a mailing address other
than the physical address of the domicile or
principal residence should enter the school
code for the physical address of their domicile
or primary residence.
A person who works outside Pennsylvania, but
maintains a permanent place of abode inside
PA during absences from Pennsylvania or a
person who plans to return to Pennsylvania
after a temporary relocation to another state or
country and is still considered a PA resident,
should use the school code for the physical
address of their permanent place of abode or
the school code of their physical address prior
to moving out of Pennsylvania.

Extension
If an extension of time to file has been requested,
this oval must be filled in. If tax is owed, a copy of
the federal extension should be submitted with the
taxpayer’s return if a PA extension was not filed.
An extension of time to file does not extend the payment deadline. Any tax reasonably expected to be
due must be paid by the filing due date. Extension

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payments can be remitted using the REV-276, Application for Extension of Time to File or through the
Make a Payment Hyperlink on the myPATH home
page. Extension payments remitted through myPATH will automatically apply the extension to the
customer's account.
If at least 90 percent of the total tax liability was paid
in four quarterly estimated installment payments
by the due date of each installment payment and all
additional tax was paid with the extension on or before the April 15 due date, an underpayment of tax
penalty will not be charged. However, interest will
be imposed if the total tax balance is not paid by the
April 15 due date.
For federal extensions where additional money is
due with the filing of the PA-40, enclose a copy of
the extension granted by the Internal Revenue
Service (IRS). Do not place this document in front
of the return. No extension will be granted for more
than six months unless the taxpayer continues to
reside outside the U.S. Persons working out of the
country are granted an automatic two-month extension of time to file until June 15.
NOTE: Do not include a copy of Form REV-276
when filing the return, as the department codes
the taxpayer’s account upon receipt of PA
extension requests.
Amended Return
If filing an amended return, this oval must be filled
in. In addition, please write “Amended Return”
across the top of the return. It is very important that
if an amended return is being filed, you use a return
that is for the same tax year that is being amended.
Failure to do so will result in the amended return
being processed for the wrong tax year. Crossing
out the tax year and writing in the year intended to
be amended will not suffice. Pennsylvania does
not have a separate return specifically for amending a tax year. However, beginning with tax year
2008 returns, the department now has Schedule
PA-40 X that also must be used when amending a
return. Schedule PA-40 X provides a comparison of
amounts from original and amended returns on a
line by line basis, calculates the refund or balance
due in a separate worksheet and provides a separate area to provide a description or reason for the
changes to the original return.
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PERSONAL INCOME TAX PREPARATION GUIDE

Residency Status
If the taxpayer was a resident for the taxable year,
fill in the “R”, Pennsylvania Resident oval in the
residency status section. If the taxpayer was a nonresident of Pennsylvania during the taxable year, fill
in the “N”, Nonresident oval. If the taxpayer was a
part-year resident, fill in the “P”, Part-Year Resident
oval and indicate the length of time he or she was
a resident of PA during the taxable year.
Filing Status
Single (S) – You must file as single if:
• On Dec. 31 of the tax year you were not
married; or
• During the tax year, you divorced or became
a widow or widower and did not remarry
and/or could not or did not elect to file a joint
return with a deceased spouse.
Married, Filing Jointly (J) – You and your
spouse, even if living apart or if one of you is deceased, can file a joint return for convenience.
The executor(s) of the estate(s) of the taxpayer
and spouse may also elect to file jointly. To file
jointly, you must meet ALL of the following conditions:
• Your taxable years end on the same date
(not including returns with a deceased taxpayer and/or spouse);
• You and your spouse elect to have the same
residency period (earliest starting date if
you moved into PA and latest ending date if
you moved out of PA) if you are part-year
residents;
• Neither of you is individually liable for the
payment of a court-ordered obligation arising
from a criminal prosecution or proceeding
with a PA county clerk of courts or the Administrative Office of Pennsylvania Courts;
• 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 of child or spousal support, or another liability to the PA Department of
Human Services.
NOTE: Married taxpayers who file joint PA personal
income tax returns are jointly and individually responsible for the taxes and any interest or penalties
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due on joint returns, even if they later divorce. Any
taxpayer who filed a joint PA personal income tax return with their spouse can request relief from joint
liability through the department's Taxpayers' Rights
Advocate. Three types of relief from joint liability are
available: innocent spouse relief, separation of liability and equitable relief. Each type of relief has
different requirements. For more information, see
Spousal Relief from Joint Liability, Form REV-971,
available on the department’s website. Any questions
concerning this program should be referred to the Office of Taxpayers’ Rights Advocate by e-mailing
[email protected]; faxing 717-787-8264; or
calling 717-772-9347.
Married, Filing Separately (M) – 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;
• Your taxable years begin on different dates
for part-year residents;
• Either of you is individually liable for the
payment of spousal/child support, or another
liability to the PA Department of Human
Services;
• Either of you is individually liable for a
court-ordered obligation to the Administrative
Office of Pennsylvania Courts; 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 PA residents and meet all
other requirements for filing jointly.
NOTE: You must include your spouse’s SSN
even if filing Married, Filing Separately.
Final Return (F) – Use this filing status if you
lived in Pennsylvania during the tax year, but
permanently moved away or if for any other
reason, you will not have any PA taxable income (or loss) in the following tax year.
Provide the reason, such as you moved to another state.
Deceased (D) – Use this status if the taxpayer,
spouse or both died during the tax year. Enter
the date(s) of death.
NOTE: For tax years beginning on or after Jan. 1,
2013, a joint return can be filed by the surviving

revenue.pa.gov

PERSONAL INCOME TAX PREPARATION GUIDE

spouse and decedent when a spouse or ta