Pennsylvania PA Schedule B - Dividend and Capital Gains Income

PA Schedule B - Dividend and Capital Gains Income
2023 PA Schedule B - Dividend Income and Capital Gain Distributions (PA-20S/PA-65 B)
IMPORTANT: FILL IN FORM MUST BE DOWNLOADED ONTO YOUR COMPUTER PRIOR TO COMPLETING

PA SCHEDULE B
Dividend Income and
Capital Gain Distributions

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

START

2308710058

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

Ordinary dividend income from federal Schedule K

1

2

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

2

3

Adjusted federal dividend income – subtract Line 2 from Line 1

3

4

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

4

5

Other dividend income not included on Line 3 and Line 4

5

6

Capital gain distributions income

6

7

Gross PA-taxable dividend income – add Lines 3 through 6

7

8

PA-exempt dividend income included on Line 7 – itemize below
PA-taxable dividend income and capital gain distributions income – subtract Line 8 from Line 7.
Enter the result on the PA-20S/PA-65 Information Return, Page 1, Section III, Line 4.

8

9

9

Federal-exempt dividend income – list sources and amounts

PA-exempt dividend income – list sources and amounts

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2023
Instructions for PA-20S/PA-65 Schedule B
PA-20S/PA-65 B IN (DR) 04-23

Dividend Income and Capital Gain Distributions

GENERAL INFORMATION

LINE INSTRUCTIONS

PURPOSE OF SCHEDULE
Use PA-20S/PA-65 Schedule B to report dividend income
and capital gain distributions 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 – Dividends.

LINE 1

Dividend income is any distribution to the entity of cash or
property from the accumulated earnings and profits or
current earnings and profits of a corporation, association, or
business trust.
Dividends reported on the PA-20S/PA-65 Information Return
and PA-20S/PA-65 Schedule B are total dividends earned
by the entity itself. There is no need to distinguish between
resident and nonresident portions since dividends are 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 dividends from Pennsylvania sources.
Dividends are ignored by the nonresident unless the entity
has reclassified dividends on PA-20S/PA-65 Schedule M,
Part I and PA-20S/PA-65 Schedule B, Line 2 as working
capital, in which case it will be included with business or
rental income.
PENNSYLVANIA TAXABLE DIVIDEND INCOME
Pennsylvania law (72 P.S. §7301(f)) provides that dividends
mean any distribution in cash or property made by a
corporation, association, or business trust that is:
● Out of accumulated earnings and profits; or
● Out of earnings and profits of the year in which such
dividend is paid.
The term dividends shall not include a distribution of stock
of a corporation made by the corporation originally issuing it
to its own stockholders if such distribution is not treated as
personal income for federal individual income tax purposes.
The Pennsylvania definition of dividends is similar, but not
identical, to the federal definition. Distributions from mutual
funds and money market funds are classified as dividends
for Pennsylvania purposes and interest for federal purposes.
Distributions from PA S corporations are reportable as
dividends by resident shareholders only if they are from
PA C corporation earnings and profits.

COMPLETING PA SCHEDULE B
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.

ORDINARY DIVIDEND INCOME FROM FEDERAL
SCHEDULE K
Enter the amount reported on federal Schedule K, Line 6a
(federal Form 1065), or Line 5a (federal Form 1120S). This
number should also match PA-20S/PA-65 Schedule M, Part
I, Line 5, Column (a). Include federal Schedule K-1 dividend
income from other entities.

LINE 2
LESS BUSINESS OR RENTAL DIVIDEND INCOME
(WORKING CAPITAL)
Enter the amount reported on PA-20S/PA-65 Schedule M,
Part I, Line 5, Column (b) and/or Column (f).

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

LINE 4
FEDERAL EXEMPT DIVIDEND INCOME TAXABLE FOR
PENNSYLVANIA PERSONAL INCOME TAX
Enter the tax-exempt dividend income amount reported on
federal Schedule K, Line 18b (federal Form 1065), or Line
16b (federal Form 1120S), “Other tax exempt income.” List the
sources and amounts in the spaces provided on the form.

LINE 5
OTHER DIVIDEND INCOME NOT INCLUDED ON LINE 3
AND LINE 4
If the entity received dividend income reported on a line
other than federal 1065 Schedule K, Line 6a, or federal
1120S Schedule K, Line 5a, then report the income as
dividend income for Pennsylvania personal income tax
purposes on PA-20S/PA-65 Schedule B, Line 5.
The federal Tax Cuts and Jobs Act of 2017 established a tax
on untaxed earnings and profits of foreign corporations
accumulated after 1986 and prior to 2018, titled the
Repatriation Transition Tax (RTT). For Pennsylvania
Personal Income Tax, these earnings and profits are taxable
when they are actually distributed. Line 5 should include any
actual payments of these earnings and profits that were not
included in taxable income in a prior year. Provide a
statement explaining the nature/source of the payments. For
additional information on the RTT, please see Informational
Notice Corporation Taxes and Personal Income Tax 2018-1:
Tax Cuts and Jobs Act of 2017.

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1

LINE 6
CAPITAL GAIN DISTRIBUTIONS INCOME
Enter the amount reported on PA-20S/PA-65 Schedule M,
Part I, Column (d), Lines 7, 8 and 11.
NOTE: Pennsylvania taxes capital gain distributions
from mutual funds as dividends.

LINE 7

Regulated investment companies (RIC) that invest in state
and local bonds distribute exempt interest dividends. The
companies and their shareholders are not taxed on them.
Not every RIC that invests in state and local bonds invests
exclusively in Pennsylvania state and local bonds. Only
federally exempt interest dividends that are derived from
Pennsylvania state and local bonds are exempt for personal
income tax purposes. Federally exempt interest dividends
that are not derived from Pennsylvania state and local bonds
are fully taxable for personal income tax purposes.

GROSS PENNSYLVANIA TAXABLE DIVIDEND INCOME
Add Lines 3 through 6, and enter the result on Line 7.

Some federally taxable dividends are Pennsylvania exempt
interest dividends. They are derived from federal obligations.

LINE 8

LINE 9

PENNSYLVANIA EXEMPT DIVIDEND INCOME
INCLUDED ON LINE 7
Enter income reported as federal dividend income that has
been taxed federally and is exempt for Pennsylvania
purposes. This number can be obtained from entity level
books and records. List the sources and amounts in the
spaces provided on the form.

PENNSYLVANIA TAXABLE DIVIDEND INCOME AND
CAPITAL GAIN DISTRIBUTIONS INCOME
Subtract Line 8 from Line 7, and enter the result on Line 9.
Enter this amount on the PA-20S/PA-65 Information
Return, Page 1, Section III, Line 4.

2

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