Pennsylvania PA Schedule I - Amortization of Intangible Drilling Costs

PA Schedule I - Amortization of Intangible Drilling Costs
2023 PA Schedule I - Amortization of Intangible Drilling and Development Costs (PA20S/PA-65 I)
IMPORTANT: FILL IN FORM MUST BE DOWNLOADED ONTO YOUR COMPUTER PRIOR TO COMPLETING
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PA SCHEDULE I
Amortization of Intangible
Drilling and Development Costs
PA-20S/PA-65 I (DR) 04-23 (FI)
PA Department of Revenue

START

2023

OFFICIAL USE ONLY

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

FEIN

9 DIGIT - NO DASH

➜
Yes

SECTION I.
1 Did the entity have a Geophysical Survey completed for wells created prior to 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.

or

No

or

No

2 Did the entity elect to currently expense all intangible drilling and development costs (IDCs)
under Section 263 (c) of the Internal Revenue Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3 Total amount of intangible drilling and development costs incurred during the
tax year - from Federal form 1065/1120S, Schedule K, line 13c(2) or 12c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. $
SECTION II.
Yes
4 Is the entity making the PA election to currently expense up to one-third of the intangible
drilling and development costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5 Amount of intangible development costs expensed for PA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. $
address and type of each well. If the well is outside of PA, fill in the oval.
SECTION III. Well Description Enter the
MM/DD/YYYY
(a)

(b)

(c)

(d)

(e)

(f)

Description of Well

Date well placed
in production

IDCs

Life of Well

Accumulated Amortization

PA Deduction
of IDCs

6 Amortization of IDCs for wells placed in production for tax years beginning prior to 1/1/2014 (see instructions):

Total Amortization Costs for wells placed in production prior to 01/01/14 . . . . 6.
MM/DD/YYYY

(a)
Description of Well

$

(b)

(c)

(d)

(e)

(f)

(g)

Date well placed
in production

IDCs

Elected
expense

Amortizable
Amount

Accumulated
Amortization

Amortization
for this year

7 Amortization of IDCs for wells placed in production for tax years beginning after 12/31/2013 (see instructions):

$
8 Total Amortization. Add amounts from lines 6 and 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. $
Total Amortization Costs for wells placed in production after 12/31/13 . . . . . . . . 7.

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

Amortization of Intangible Drilling and Development Costs

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

GENERAL INFORMATION

fuel, repairs and supplies. The entity can elect to deduct only
the costs of items with no salvage value.

PURPOSE OF SCHEDULE
Use PA-20S/PA-65 Schedule I to report the PA S
corporations, partnerships or LLC’s deduction of intangible
drilling and development costs (IDCs). Pennsylvania does
not follow federal election rules for expensing intangible
drilling and development costs.

SECTION II

COMPLETING PA SCHEDULE I
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
SECTION I
LINE 1
For wells created prior to 2014, indicate whether or not the
PA S corporation, partnership or LLC had a Geophysical
Survey completed. Geophysical Surveys are a systematic
collection of geophysical data for spatial studies, collecting
data from above or below the Earth’s surfaces.

LINE 2
The Pennsylvania Tax Reform Code of 1971, unlike the
Internal Revenue Code §263(c), does not contain a
provision that allows for expensing of capital expenditures.
These include intangible drilling and development costs
associated with oil and gas wells or wells drilled for
geothermal deposit. Check yes if the entity expensed on the
federal return.

LINE 3
Enter the total amount of intangible drilling and development
costs that the entity incurred during the tax year. These costs
represent drilling and development expenses for wells in the
United States where the entity has an operating or working
interest. These expenses include costs necessary in the
drilling and preparation of wells for the production of oil and
gas, such as survey work, ground clearing, drainage, wages,

LINE 4
This is not a one-time election. A PA S corporation,
partnership or LLC may elect each tax year to expense up
to one-third of the intangible drilling and development costs
that the entity incurs. The PA S corporation, partnership or
LLC incurring the drilling and development cost makes the
election to expense the intangible drilling and development
costs for Pennsylvania personal income tax purposes. Its
partners or shareholders cannot make the election. If Line 4,
Section II is marked “Yes”, then Line 7(d) of Section III must
be completed.

LINE 5
Indicate the amount of intangible drilling and development
costs that the S Corporation, partnership or LLC is electing
to immediately expense in the tax year. Since each well can
elect to immediately expense up to one third of intangible
drilling and development costs, the amount listed here may
not equal one-third of the entity’s total intangible drilling and
development costs. The total amount reported on Line 5,
Section II should be reported on Schedule M, Part II, Section
VI, Line h.

SECTION III
WELL DESCRIPTION

LINE 6
Complete chart for well(s) placed in service prior to 1/1/2014.

LINE 6(a)
DESCRIPTION OF WELL
Enter the location of each well or the name of each well.
Description of the well should be same as the description
the entity uses for record keeping.

LINE 6(b)
DATE WELL PLACED IN SERVICE
Enter the date that the well was placed into production.

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LINE 6(c)

LINE 7(c)

INTANGIBLE DRILLING AND DEVELOPMENT COST
EXPENSE
Enter the total amount of the intangible drilling and
development costs allocated to each well.

INTANGIBLE DRILLING COST EXPENSE
Enter the total amount of the intangible drilling and
development costs allocated to each well.

LINE 6(d)
LIFE OF WELL
Enter the estimated useful life of the well. Prior to January
1, 2014, Pennsylvania required the intangible drilling and
development costs to be amortized over the estimated
useful life of each well.

LINE 6(e)
ACCUMULATED AMORTIZATION
Enter the cumulative amount of intangible drilling and
development costs amortized in prior years.

LINE 6(f)
PA DEDUCTION OF IDCS
Enter the amortization expense that will be deducted for
Pennsylvania personal income tax purposes during the tax
year.

LINE 7
AMORTIZATION OF IDCS
Complete chart for well(s) placed in service after 12/31/2013.

LINE 7(a)
DESCRIPTION OF WELL
Enter the location of each well or the name of each well.
Description of the well should be same as the description
the entity uses for record keeping.

LINE 7(d)
ELECTED EXPENSE
If Section II, Line 4 is marked yes, enter amount to expense.
This amount cannot exceed one-third of the intangible
drilling and development costs incurred.

LINE 7(e)
AMORTIZABLE AMOUNT
Subtract Line 7(c) – 7(d).

LINE 7(f)
ACCUMULATED AMORTIZATION
For year well(s) placed in service, this amount will be zero.

LINE 7(g)
AMORTIZATION FOR THIS YEAR
Divide line 7(e) by 10.
NOTE: If additional space is required to list wells on
Line 6 and 7 of Section III, then please submit
additional copies of Schedule I.

LINE 8
TOTAL AMORTIZATION
Add amounts from Line 6 and Line 7 of Section III. Total
amount of amortization reported on Line 8 should be
reported on Schedule M, Part II, Section VI, Line c.

LINE 7(b)
DATE WELL PLACED IN SERVICE
Enter the date that the well was placed into production.

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