Pennsylvania PA Schedule NRH - Compensation Apportionment

PA Schedule NRH - Compensation Apportionment
PA Schedule NRH - Compensation Apportionment (Form and Instructions) (PA-40 NRH)
PA SCHEDULE NRH

2303710053

Non-Resident Apportionment

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PA-40 NRH (EX) 01-24 (FI)
PA Department of Revenue

20

OFFICIAL USE ONLY

NAME AS SHOWN ON YOUR PA RETURN:

SOCIAL SECURITY NUMBER:

Enter the name, address and employer identification number of your employer. A separate PA Schedule NRH must be completed for each employer.
EMPLOYER’S NAME

EMPLOYER’S IDENTIFICATION NUMBER

EMPLOYER’S ADDRESS
CITY

STATE

SECTION I

ZIP CODE

APPORTIONMENT METHODS

You must use the business-volume basis when your income depends directly on the amount of business earned or received when in Pennsylvania. Otherwise, use
the working-day basis. You may not use both methods in determining apportionment.

PART A. WORKING-DAY BASIS (Use only if Business-Volume Basis cannot be used).
1. Total number of days in the tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Total number of nonworking days

1.

a. Saturdays, Sundays and holidays (if no work is performed on these days) . . . . . . . . . . . . .a.
b. Sick, illness or disability days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .b.
c. Vacation or leave days, with or without pay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .c.
Total number of nonworking days (Add a, b and c and enter on Line 2.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.

3. Total number of days worked in the tax year (Subtract Line 2 from Line 1.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.

4. Total number of days worked within Pennsylvania during the tax year (See the instructions.) . . . . . . . . . . . . . . . . . . . . . . . . . .

4.

5. Working-days apportionment fraction (Divide Line 4 by Line 3. Calculate to at least six decimal places.) . . . . . . . . . . . . . . . . .

5.

.

PART B. BUSINESS-VOLUME BASIS
6. Total volume of business transacted during the tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.

7. Total volume of business transacted directly due to activity in Pennsylvania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.

8. Business-volume apportionment fraction (Divide Line 7 by Line 6. Calculate to at least six decimal places.) . . . . . . . . . . . . . .

8.

.

APPORTIONED COMPENSATION AND/OR EMPLOYEE BUSINESS EXPENSES
PART C. PA GROSS-TAXABLE COMPENSATION
If the Form W-2 provided by your employer did not show the amount of PA gross-taxable compensation you earned or received in Pennsylvania, or if the amount
shown as PA gross-taxable compensation is incorrect, you must apportion the amount on Line 9. If your employer properly reported your PA gross-taxable
compensation on your Form W-2, do not complete this part.
9. Gross-taxable compensation from Form W-2 or pay stubs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.

10. Working-days apportionment percentage from Line 5 in Part A above . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.

11. Business-volume apportionment percentage from Line 8 in Part B above (Use the percentage from Line 5 or Line 8, but not both.) . . . .

11.

12. Apportioned PA gross-taxable compensation (Multiply Line 9 by either Line 10 or Line 11.) Enter on Line 1A of your PA-40. .

12.

.
.

If you did not incur any allowable employee business expenses, include the amount from Line 12 on Line 1c of your PA-40. If you did incur allowable employee
business expenses, you must complete Part D.

PART D. ALLOWABLE EMPLOYEE BUSINESS EXPENSES
In order to apportion your business expenses for PA purposes, you must complete PA Schedule UE, Allowable Employee Business Expenses. Do not include any
expenses on PA Schedule UE which are not allowable under PA law. Read the instructions carefully.
13.

Total allowable expenses from PA Schedule UE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13.

14.

Working-day apportionment percentage from Line 5 in Part A above . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14.

15.

Business-volume apportionment percentage from Line 8 in Part B above (Use the percentage from either Line 5 or Line 8, but not both.) . .

15.

16.

Apportioned PA-allowable employee business expenses (Multiply Line 13 by Line 14 or Line 15.) Enter on Line 1B of your PA-40. .

16.

.
.

PART E. PA-TAXABLE COMPENSATION
If you completed Part C, enter the amount from Line 12 on Line 18.You should not have amounts on both Line 17 and Line 18 unless you received more than one
Form W-2 from the same employer. On Line 19, enter any reimbursements for expenses that you received, but not included in your Form W-2.
17.

Correct PA gross-taxable compensation from Form W-2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17.

18.

Apportioned PA gross-taxable compensation from Part C, Line 12 above (Enter on Line 1A of your PA-40.) . . . . . . . . . . . . .

18.

19.

Apportioned reimbursements for expenses not included in your Form W-2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.

20.

Total PA gross-taxable compensation (Add Line 17 and/or Line 18 to Line 19.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20.

21.

Apportioned PA employee business expenses from Part D, Line 16 above (Enter on Line 1B of your PA-40.) . . . . . . . . . . . .

21.

22.

Net taxable/apportioned PA gross-taxable compensation (Subtract Line 21 from Line 20.) . . . . . . . . . . . . . . . . . . . . . . . . . . .

22.

Include the amount from Line 22 on Line 1c of your PA-40. Enclose a copy of this PA Schedule NRH, your completed PA Schedule UE, your form(s) W-2 and
your employer letter verifying working days outside Pennsylvania with your PA-40.

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2303810051

PA SCHEDULE NRH

Non-Resident Apportionment

START
➜

PA-40 NRH (EX) 01-24 (FI)
PA Department of Revenue

20

OFFICIAL USE ONLY

NAME AS SHOWN ON YOUR PA RETURN

SECTION II

SOCIAL SECURITY NUMBER

CALCULATION OF PENNSYLVANIA NET PROFITS FROM BUSINESS, PROFESSION OR FARM INCOME

If your business, profession or farm income is derived from sources within and outside Pennsylvania and your accounts and records do not
clearly reflect the income from within Pennsylvania, complete Section II of this schedule and enclose it with your PA-40.

NET PROFITS FROM BUSINESS OR FARM APPORTIONMENT FORMULA
Federal Employer Identification Number

List all places within and outside Pennsylvania where you operate your business.

(1) STREET ADDRESS

(2) CITY AND STATE

(A)
TOTAL EVERYWHERE

DESCRIPTION OF ITEMS
USED AS FACTORS

(B)
WITHIN PENNSYLVANIA

(3) TYPE OF BUSINESS

(C)
DIVIDE (B) BY (A)
TO OBTAIN DECIMAL – CARRY
TO AT LEAST SIX PLACES

1. Real estate and tangible property

$

$

1.

.

2. Wages, salaries, commissions
and other compensation

$

$

2.

.

3. Sales

$

$

3.

.

4. Total (Add Line 1 through Line 3
for column C.)

4.

.

5. Allocating fraction (express in decimal). Divide Line 4 by 3. If only two of the above factors apply, divide by 2.
If only one applies, enter figure from Line 4.

5.

.

6. Total net profits from business, profession or farm income for the tax period.

6. $

7. Net profits from business, profession or farm allocated to Pennsylvania. (Multiply Line 6 by Line 5.) Enter here
and include in Line 4 of PA-40.

7. $

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Instructions for PA-40 Schedule NRH

Non-Resident Apportionment

PA-40 NRH IN (EX) 01-24

WHAT’S NEW
Section I, Line 4 and Section I, Line 7 instructions have been
updated to include a requirement to include a signed
statement from an employer to verify working days or the
amount earned while working outside Pennsylvania.

WHO MUST USE PA SCHEDULE NRH?
A nonresident employee who performs services within and
outside Pennsylvania is subject to PA personal income tax
only on the net compensation for services performed within
Pennsylvania. Your employer should report your PA grosstaxable compensation in the “state” (PA) box on your
Federal form W-2, Wage and Tax Statement.
If your employer(s) did not report your PA wages, you must
complete and submit a PA Schedule NRH. You must fill out
this schedule for each employer that:
a. Did not report your PA gross-taxable compensation on
your Form W-2; or
b. Reported an incorrect amount as PA gross-taxable
compensation on your Form W-2; or
c. You incurred unreimbursed employee business
expenses in earning or receiving PA gross-taxable
compensation.
You must complete Section I of this schedule and submit it
with your PA-40.
If your employer properly reported the amount of your PA
gross-taxable compensation on your Form W-2, and you did
not incur unreimbursed employee business expenses, you
do not need to complete this schedule.
Section I provides two methods of apportioning your PA
gross-taxable compensation and your unreimbursed
employee business expenses.
Part A. Working-Day Basis. If your compensation depends
directly on the number of days you performed services in
Pennsylvania, use this part.
Part B. Business-Volume Basis. If your compensation
depends on the amount of business transacted from the
services you performed in Pennsylvania, use this part.
YOU MAY NOT USE BOTH METHODS. Use the percentage
you calculated and apply it to your PA gross-taxable
compensation and your allowable PA unreimbursed
employee business expenses.
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Section II of PA Schedule NRH is for apportioning income
from a business, profession or farm. If you derived your
business, profession or farm income from sources within and
outside Pennsylvania and your accounts and records
accurately reflect income from within Pennsylvania, you
must report your PA-taxable income based upon your
accounts or records. If you derived your business or farm
income from sources within and outside Pennsylvania and
your accounts and records do not clearly reflect income from
within Pennsylvania, complete Section II of PA Schedule
NRH to determine your PA-source business or farm income.
In Section II, you calculate a decimal figure that you apply
to your total net profit from business or farming. The decimal
figure is an average of the sum of three fractions: tangible
property; wages, salaries and commissions; and sales.

LINE INSTRUCTIONS
SECTION I
APPORTIONMENT METHODS

PART A
WORKING-DAY BASIS

LINE 1
Report the total number of days in the taxable year you
worked for your employer. For example, a complete year
would be 365 days.

LINE 2
Enter the total number of nonworking days during the taxable year. Nonworking days include weekends and holidays,
as long as no work is performed on those days, as well as
vacation days, sick days, leaves of absence due to illness or
disability and days working for other employers or yourself.

LINE 3
Subtract Line 2 from Line 1 to determine your working days
during the taxable year.

LINE 4
Report the total number of days you performed services or
worked within Pennsylvania.
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NOTE: You are deemed to have worked outside
Pennsylvania if your employer required you to perform your job duties outside Pennsylvania. If you work outside Pennsylvania for your own personal convenience or
for tax purposes, such work days are to be included in the
total for this line.
IMPORTANT: To avoid delays in the processing of
your return, a signed statement from your employer
must be submitted with Schedule NRH that includes the
number of days worked outside of Pennsylvania to verify the
information reported on this schedule.

NOTE: You must explain the reason you feel the
amount on your Form W-2 is incorrect in a separate
statement with this schedule.

LINE 10
If you used the working-day apportionment method, enter
the percentage from Line 5.

LINE 11
If you used the business-volume apportionment method,
enter the percentage from Line 8.

LINE 5

LINE 12

Calculate your apportionment fraction for days worked in
Pennsylvania by dividing Line 4 by Line 3. Calculate to six
decimal places.

Calculate your apportioned PA gross-taxable compensation
by multiplying Line 9 by either Line 10 or Line 11.

PART B
BUSINESS-VOLUME BASIS

LINE 6
Report the total amount of business you transacted for your
employer within and outside Pennsylvania during the taxable year.

LINE 7
Report the total amount of business you transacted for your
employer based on the services you performed within
Pennsylvania during the taxable year.
NOTE: If the services you performed in Pennsylvania
directly resulted in business transactions outside
Pennsylvania, include such business in the total for this line.
IMPORTANT: To avoid delays in the processing of
your return, a signed statement from your employer
must be submitted with Schedule NRH that provides the
actual amount earned while working outside Pennsylvania
to verify the information reported on this schedule.

LINE 8
Calculate your apportionment fraction for business volume
directly related to your services performed in Pennsylvania
by dividing Line 7 by Line 6. Calculate to six decimal places.

PART C
PA GROSS-TAXABLE COMPENSATION

LINE 9
From your Form W-2, enter your gross compensation if your
employer failed to separately report your PA earnings (or the
correct amount of PA-taxable compensation).
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Follow the instructions in Part C to transfer the amount from
Line 12 to Line 1c of your PA-40 or to Part E.

PART D
ALLOWABLE EMPLOYEE BUSINESS EXPENSES

LINE 13
Report the amount of your total unreimbursed employee
business expenses from PA Schedule UE. These expenses
include those you incurred within and outside Pennsylvania
in performing the services for your employer.

LINE 14
If you used the working-day apportionment method, enter
the percentage from Line 5.

LINE 15
If you used the business-volume apportionment method,
enter the percentage from Line 8.

LINE 16
Calculate your apportioned unreimbursed employee business
expenses by multiplying Line 13 by either Line 14 or Line 15.
If you complete Part D, you must complete Part E.

PART E
PA-TAXABLE COMPENSATION

LINE 17
If your employer used the correct PA gross-taxable compensation amount on your Form W-2, enter that amount.

LINE 18
If you apportioned your PA gross-taxable compensation,
enter the amount from Part C, Line 12.
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LINE 19
If your employer reimbursed you for some of your expenses,
but not in the exact amount or on a per diem basis, and that
reimbursement is not already included in your form W-2,
enter the amount of your reimbursements multiplied by the
percentage from Line 5 or Line 8 on this line.

LINE 20
Add all completed lines above and enter the total here. This
is your apportioned PA gross-taxable compensation.

LINE 21
Enter the amount of your apportioned unreimbursed
employee business expenses from Part D, Line 16.

LINE 22
Subtract Line 21 from Line 20. This is your net PA-taxable
compensation. Transfer this amount to Line 1c of your PA-40
and include it with any other PA-taxable compensation.

SECTION II
CALCULATION OF PENNSYLVANIA NET PROFITS
FROM BUSINESS, PROFESSION OR FARM INCOME
List all places within and outside Pennsylvania where you
operate your business, giving the street address, city and
state. Also indicate the type of business.

LINE 1
Real Estate and Tangible Property
In Column (A), TOTAL EVERYWHERE, enter the average
value of the real and tangible personal property you owned
or rented and used in your trade or business within and outside Pennsylvania. In Column (B), WITHIN PENNSYLVANIA, enter the average value of the real and tangible personal property you owned or rented and used in your trade
or business in Pennsylvania. In Column (C), enter the decimal figure which results from dividing the dollar amount in
Column (B) by the dollar amount in Column (A).
Property you owned is valued at its original cost with no
allowance for depreciation. The average value is determined
by adding the total value at the beginning of the year to the
total value at the end of the year and dividing by two. The
department may require averaging of monthly values to
reflect the average value of property.
Property you rent is valued at eight times the gross annual
rental rate. Gross annual rental rate does not include
property subleased and not used to carry on the business.

LINE 2
Wages, Salaries, Commissions and Other
Compensations
In Column (A), TOTAL EVERYWHERE, enter total
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compensation paid within and outside Pennsylvania during
the entire year. In Column (B), WITHIN PENNSYLVANIA,
enter total compensation paid in Pennsylvania during the
entire year. In Column (C), enter the decimal figure which
results from dividing the dollar amount in Column (B) by the
dollar amount in Column (A).
Compensation is paid in Pennsylvania if:
1. The individual performs service entirely within
Pennsylvania; or
2. The individual performs services within and outside
Pennsylvania, but the service performed outside
Pennsylvania is incidental to the individual’s service
performed within Pennsylvania; or
3. Some of the service the individual performs within
Pennsylvania, and either the base of operations, or if
there is no base of operations, the place from which the
service is directed or controlled is within Pennsylvania;
or the base of operations or the place from which the
service is directed or controlled is not in any state in
which some part of the service is performed, but the
individual is a resident of Pennsylvania.
Base of operations refers to the place or fixed center from
which the individual works. An individual’s base of operations
may be a business office or a place at which the employee
is to receive directions and instructions if the contract of
employment so specifies. In the absence of more controlling
factors, an individual’s base of operations may be the place
to which business mail, supplies and equipment are sent, or
the place where business records are maintained.

LINE 3
Sales
In Column (A), TOTAL EVERYWHERE, enter your total
sales within and outside Pennsylvania during the entire
year. In Column (B), WITHIN PENNSYLVANIA, enter your
total sales within Pennsylvania during the entire year. In
Column (C), enter the decimal figure which results from
dividing the dollar amount in Column (B) by the dollar
amount in Column (A).
Sales of tangible personal property are in Pennsylvania if:
(1) The property is delivered or shipped from outside
Pennsylvania to a purchaser in Pennsylvania, other than
the U.S. government, regardless of the free on board
point or other conditions of the sale; or
(2) The property is shipped from Pennsylvania to any place
and the purchaser is the U.S. government.
Sales, other than sales of tangible personal property, are in
Pennsylvania if:
(1) The income-producing activity is performed in
Pennsylvania; or
(2) The income-producing activity is performed within and
outside Pennsylvania, and the greater proportion of the
income-producing activity is performed within
Pennsylvania (based on cost or performance).
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LINE 4
Add lines 1, 2 and 3.

LINE 5
Average - Divide the amount on Line 4 by the number of
factors which apply; i.e. the number of entries in Column
(A). Example: If you entered amounts only for property and
sales in Column (A), you would divide the amount on Line
4 by 2.

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LINE 6
Enter the total net profits from business or farm income for
the tax year from PA Schedule C or PA Schedule F.

LINE 7
Multiply the amount shown on Line 6 by the allocating fraction shown on Line 5. This is the portion of your net profits
from business or farm income subject to tax in Pennsylvania.
Include the amount in Line 4 of PA-40.

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