page 1 of 3 2016 please print. use black ink. · page 1 of 3 (09-16 )(fi 2016 if a loss, fill in...

2 Net Business Income (Loss) . . . . . . . . . . . . . . . . . . 2a l00 2e l002 Share of Business Income (Loss) from Other Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2b l00 2f l002 Previously Disallowed PA Source CNI Deductions - PA S Corporations only . . . . . . . . . 2c l00 2g l002 Calculate Adjusted/Apportioned Net Business Income (Loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2d l00 2h l00

Part II. Apportioned/Allocated PA-Taxable Business Income (Loss)

Part III. Allocated Other PA PIT Income (Loss)3 Interest Income from PA Schedule A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3h l004 Dividend Income from PA Schedule B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4h l005 Net Gain (Loss) from PA Schedule D . . . . . . . . . . . . . 5a l00 5b l006 Rent/Royalty Net Income (Loss) from PA Schedule M, Part B . . . . . . . . . . . . . . . . . . . . . . . . 6a l00 6b l007 Estates or Trusts Income from PA Schedule J . . . . . . . 7a l00 7b l008 Gambling and Lottery Winnings from PA Schedule T . . 8a l00 8b l009 Total Other PA PIT Income (Loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9b l00

Part I. Total Taxable Business Income (Loss) from Operations Everywhere1a Taxable Business Income (Loss) from Operations Everywhere . . . . . . . . . . . . . . . . . . . . . . . . . 1a l001b Share of Business Income (Loss) from All Other Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1b l001c Total Income (Loss). Add Lines 1a and 1b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1c l001d Previously Disallowed CNI Deductions - PA S Corporations only . . . . . . . . . . . . . . . . . . . . . 1d l001e Total Adjusted Business Income (Loss). Subtract Line 1d from Line 1c . . . . . . . . . . . . . . . . . . . . . 1e l00

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Filing Status:PA-20S PA-65 P-S KOZ

USE BLACK INKSUBMIT ALL SUPPORTING SCHEDULES

FEINC

Business Name

First Line of Address - Street Address - If Address has Apartment Number, Suite, RR No. - Place on this Line.

Second Line of Address - PO Box

City or Post Office State ZIP Code

Revenue ID NAICS Code Inactive

PA-20S/PA-65PA S Corporation/PartnershipInformation ReturnPAGE 1 of 3 (09-16) (FI) 2016

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Extension Requested

Initial Year

Fiscal Year Short Year Beginning Ending _________ _________Final Return FEIN/Name/AddressChange Amended InformationReturn Date activity began in PA____________________________

EC FCOFFICIAL USE ONLY

1606010054

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Part IV. Total PA S Corporation or Partnership Income (Loss)10 Total Income (Loss) per Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 l0011 Total Reportable Income (Loss). Add Lines 1e and 9 or add Lines 2h and 9. . . . . . . . . . . . . . . . 11 l0012 Total Nontaxable/Nonreportable Income (Loss). Subtract Line 11 from Line 10. . . . . . . . . 12 l00Part V. Pass Through Credits - See the PA-20S/PA-65 instructions13a Total Other Credits. Submit PA-20S/PA-65 Schedule OC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13a l0013b Resident Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13b l0014a PA 2016 Quarterly Tax Withholding Payments/Extension Payment for Nonresident Owners . . . . . . 14a l0014b Final Payment of Nonresident Withholding Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14b l0014c Total PA Income Tax Withheld. Add Lines 14a and 14b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14c l00Part VI. Distributions - See the PA-20S/PA-65 instructions – Partnerships Only15 Distributions of Cash, Marketable Securities, and Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 l0016 Guaranteed Payments for Capital or Other Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 l0017 All Other Guaranteed Payments for Services Rendered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 l0018 Guaranteed Payments to Retired Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 l00 Distributions - See the PA-20S/PA-65 instructions – PA S Corporations Only19 Distributions from PA Accumulated Adjustments Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 l0020 Distributions of Cash, Marketable Securities, and Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 l00

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Part VII. Other Information – See the PA-20S/PA-65 instructions for each line01 During the entity’s tax year, did the entity own any interest in another partnership or in any foreign entity that was

disregarded as an entity separate from its owner under federal regulations Sections 301.7701-2 and 301.7701-3?If yes, submit statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

02 Does the entity have any tax-exempt partners/members/shareholders? If yes, submit statement . . . . . . . . . . . . . . . . . 2

03 Does the entity have any foreign partners/members/shareholders (outside the U.S.)? If yes, submit statement . . . . . 3

04 Was there a distribution of property or a transfer (e.g., by sale or death) of a partner/member interest during thetax year? (Partnership only) If yes, submit statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

05 Has the federal government changed taxable income as originally reported for any prior period? If yes, indicateperiod on supplemental statement, and submit final IRS determination paperwork . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

06 Does the entity have any foreign operations or ownership in a foreign bank account? If yes, submit statement . . . . . 6

07 Is this entity involved in a reportable transaction, listed transaction, or registered tax shelter within this return?If yes, submit statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

08 Does the entity filing as a partnership have other partnerships as partners? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

09 Has the entity sold any tax credits? If yes, submit statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

10 Has the entity changed its method of accounting for federal income tax purposes during this tax year? If yes, submit federal Form 3115 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

11 Has the entity entered into any like-kind exchanges under IRC Section 1031? If yes, submit federal Form 8824 . . . 11

12 PA Apportionment as reported on PA-20S/PA-65 Schedule H-Corp . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Yes or No

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PA-20S/PA-65PAGE 2 of 3 (09-16) (FI) 2016

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1 Balance at the beginning of the taxable year . . . . . If AAA is negative, fill in the oval 1

2 Total reportable income from Part IV, Line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

3 Other additions. Submit an itemized statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

4 Loss from Part IV, Line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

5 Other reductions. Submit an itemized statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

6 Sum of Lines 1 through 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

7 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

8 Balance at taxable year-end. Subtract Line 7 from Line 6 . . . . . . . . . . . . . . . . . . . . . . . . 8

Part VIII. PA S Corporations Only - Accumulated Adjustments Account (AAA)and Accumulated Earnings and Profits (AE&P)

Part IX. Ownership in Pass Through EntitiesIf the entity received income (loss) from an S corporation, partnership, estate or trust, limited liability company or any other pass through entityincluding a qualified subchapter S subsidiary (QSSS), list below the FEIN, name and address for each entity. If additional space is needed,submit a separate statement. If the income (loss) is from a QSSS, enter “yes” in the QSSS box.

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Part X. Signature and VerificationUnder penalties of perjury, I declare I have examined this return, including accompanying schedules and statements, and to the best of my knowledge andbelief, it is true, correct and complete. Declaration of paid preparer is based on all information of which preparer has any knowledge.

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Print/Type name of general partner, principal officer or Signature of general partner, principal officer or Date Daytime phone no.authorized individual authorized individual

Paid Preparer’s Use OnlyPrint/Type preparer’s name Preparer’s signature Date Check if self-employedFirm’s name (or yours if self-employed) Daytime phone no.

Firms’s address

Preparer’s PTIN Firm’s FEIN

E-File Opt Out

1606210050

16062100501606210050

5www.revenue.pa.gov

Pennsylvania Department of Revenue 2016Instructions for Form PA-20S/PA-65

PA S Corporation/Partnership Information ReturnForm PA-20S/PA-65 (09-16)

Tax year changes for the PA-20S/PA-65 Information Return, schedules andforms include:The Capital Stock/Foreign FranchiseTax has expired for tax years beginningafter December 31, 2015. Referencesto the capital stock and foreign fran-chise taxes have been removed fromall tax forms and instructions.

PA-20S/PA-65, Schedule H-CorpEffective for tax years beginning after12/31/15, the capital stock/foreign fran-chise tax has expired. The PA-20S/PA-65 Schedule H-Corp has been up-dated to remove the property and pay-roll factors.

PA-65 Corp, Directory of CorporatePartnersA “Final Return” oval has been addedin the upper right legend where the de-mographic fields are located for 100%corporate owned entities filing a finalPA-65 Corp, Directory of CorporatePartners return.

Schedule TWith the passing of Act 84, retroactiveto January 1, 2016, the Pennsylvaniapersonal income tax applies to cashprizes from the Pennsylvania Lottery.Previously only gambling and lotterywinnings from sources other than thePennsylvania Lottery were taxable.

Schedule OCCoal Refuse Energy and Reclamation Tax Credit: This new tax credit is designed to in-centivize eligible facilities that generateelectricity in the commonwealth to usecoal refuse for power generation, con-trol acid gasses for emission controland use ash produced by the facility toreclaim mining-affected sites. Creditsmay be awarded at a rate of $4 per2,000 pounds of qualified refuse

capped at 22.2 percent of the availablebudget allocation per fiscal year. Theallocation is $7.5 million for the 2016-17 fiscal year and $10 million each fis-cal year thereafter.

PA-20S/PA-65, Schedule M andSchedule DEffective September 11, 2016, Section1033 of the Internal Revenue Codeshall be applicable to the personal in-come tax. This federal provision allowsa taxpayer to acquire replacementproperty and make an election to deferrecognition of gain following an invol-untary conversion, for example whenthe original property is destroyed byfire or natural disaster.

Internet. Visit the department’s web-site at www.revenue.pa.gov to: ● Download forms, instructions

and publications; ● Research tax questions by us-

ing the Online Customer ServiceCenter; or

● Search publications online by topicor keyword.

If you do not have Internet access, visityour local public library or district office.

Email. Forms for tax year 2011through the current year can be found on the department’s website at www.revenue.pa.gov. Requestsfor forms prior to 2011 should be sent to [email protected].

Written Requests. Send written re-quests for forms to: PA DEPARTMENT OF REVENUE TAX FORM SERVICE UNIT 1854 BROOKWOOD ST HARRISBURG PA 17104-2244

By phone and in person. You canorder forms and publications by calling

the department’s automated, 24-hour,toll-free forms ordering message serv-ice at 1-800-362-2050.

You can also get most forms and pub-lications at your nearest district office.Please call ahead to verify a district of-fice’s address and services or visitwww.revenue.pa.gov for more informa-tion. Taxpayer assistance hours are8:30 a.m. to 5:00 p.m.

Copies of Previously Filed ReturnsTo receive copies of previously filed taxreturns, complete and sign Form REV-467, Authorization for Release of TaxRecords, and send it to: PA DEPARTMENT OF REVENUE BUREAU OF ADMINISTRATIVE SERVICES 12TH FLOOR STRAWBERRY SQUARE HARRISBURG PA 17128-1200

You may also fax the request to 717-783-4355. If someone other thanthe taxpayer is making the request,Form REV-677, Power of Attorney andDeclaration of Representative, must besubmitted with the request for the release of the tax records. If a taxpayeris deceased, sufficient evidence to es-tablish authority to act for the tax-payer's estate must be provided to thedepartment.

Please allow four to six weeks for a request to be processed.

By law (42 U.S.C. §405(c)(2)(C)(i); 61Pa. Code §117.16), the departmenthas the authority to use the Social Se-curity number (SSN) to administer thePennsylvania personal income tax andother Commonwealth of Pennsylvaniatax laws.

The department uses the SSN to iden-tify individual taxpayers and verify their

HOW TO GET FORMS AND PUBLICATIONS

WHAT’S NEW

PRIVACY NOTIFICATION

6 www.revenue.pa.gov

incomes. The department also usesthe SSN to administer a number of tax-offset and child-support programs thatfederal and Pennsylvania laws require.

The commonwealth may also use theSSN in exchange-of-tax informationagreements with governmental author-ities. Except for official purposes,Pennsylvania law prohibits the com-monwealth from disclosing informationthat individuals provide on income taxreturns, including the SSN(s).

PURPOSE OF FORMThe PA-20S/PA-65 form is an informa-tion return and personal income tax fil-ing requirement used to report theincome (losses), deductions, credits,etc., from the operation of foreign ordomestic PA S corporations, partner-ships or limited liability companiesclassified as partnerships or S corpo-rations for federal income tax purposes(further referred to as “entity” or “enti-ties”).

These entities do not pay tax on their income but “pass through” any profits or losses to their owners (share-holders, partners or members). Whenpreparing the PA-20S/PA-65 PA S Corporation/Partnership InformationReturn, it is best to start with the com-pleted federal Form 1120S or federalForm 1065 and then proceed to thePennsylvania schedules.

The information on the PA-20S/PA-65 Information Return has no

relevance to C corporations except if acredit from PA-20S/PA-65 ScheduleOC has been allocated on the PASchedule RK-1, Line 9 or NRK-1, Line7. Otherwise, the only information rel-evant to a corporate taxpayer is thePA-20S/PA-65 Schedule H-Corp forcalculating CNI tax.

Act 52 of 2013 authorizes the assess-ment of partnerships and PA S corpo-rations at the entity level forunderstating income by more than $1million. While the provision does notapply to publicly traded partnerships, itdoes apply to partnerships with 11 ormore partners; partnerships with atleast one partner that is a corporation,

limited liability company, partnership, Scorporation or trust; PA S corporationswith 11 or more shareholders; or anypartnership or PA S corporation thatelects to be subject to the provision.

IMPORTANT: Pass-through en-tities that fail to maintain accu-

rate lists of owner/beneficiary names,addresses, and tax identification num-bers now subject the general partner,tax matters partner, corporate officerand/or trustee of the partnership, S cor-poration, trust or estate to responsibleparty assessments holding them indi-vidually liable for tax, penalty, and in-terest owed by the entity.

Every domestic or foreign PA S corpo-ration (72 P.S. §7330.1), partnership(72 P.S. §7335(c)) or entity formed asa limited liability company that is clas-sified as a partnership or S corporationfor federal income tax purposes mustfile the PA-20S/PA-65 Information Re-turn if any of the following apply: 1. During the taxable year, the part-

nership, PA S corporation or itsqualified subchapter S subsidiaryearned, received or acquired anygross taxable income (loss) alloca-ble or apportionable to Pennsylva-nia, regardless of the amount of itsincome (loss) and whether or notthe income was distributed; or

2. During the taxable year, the PA Scorporation had at least one share-holder that was a Pennsylvaniaresident individual or part-year res-ident estate, trust or disregardedentity owned by a resident individ-ual or part-year resident; or

3. The partnership, at year-end, hadat least one partner that was aPennsylvania resident individual,estate, trust or disregarded entityowned by a resident individual.

A $250 penalty is imposed for failure to file the PA-20S/PA-65. In addition, a$250 penalty is imposed for each missing RK-1, NRK-1 and Schedule H-Corp.

IMPORTANT: All income for anS corporation must be propor-

tionally distributed and cannot bespecifically allocated.

Inactive S Corporations andPartnershipsIf the PA S corporation or partnershipwas inactive during the entire tax re-porting period, the entity must still submit the PA-20S/PA-65 InformationReturn and fill in the Inactive oval.Schedules and supporting documenta-tion do not need to be included with thePA-20S/PA-65 Information Return.

In many instances, Pennsylvania per-sonal income tax law and regulationsdiffer from federal tax laws. This is especially true with regard to federalelections concerning the timing of in-come and expense items.Taxpayers should not use federal elec-tions to determine Pennsylvania per-sonal income tax income (loss).PA S corporations, partnerships andlimited liability companies classified aspartnerships or S corporations for federal income tax purposes report income (loss) using the Pennsylvaniapersonal income tax rules. Pennsylva-nia does not adopt federal rules forpurposes of personal income taxation.Accordingly, the determination of re-portable amounts in each personal income tax classification may vary sig-nificantly from the classifications andamounts as determined for federal in-come tax purposes.For Pennsylvania personal income taxpurposes, read the rules for classifyingincome found in the Pennsylvania Per-sonal Income Tax Guide. The incomemust be reported on the owner’s taxreturn in the same classification of in-come as it is reported to them on theirPA Schedules RK-1 and/or NRK-1from the entity.The entity must maintain sufficientbooks and records to properly reportincome (losses), expenses, credits, deductions, and other amounts forPennsylvania personal income taxpurposes. A PA S corporation or part-nership that only operates a busi-ness, profession or farm must includeall activities and transactions to deter-mine Part I or Part II of the PA-20S/PA-65 Information Return,whichever is applicable, regardless of

WHO MUST FILE

GENERAL INFORMATION

CLASSIFYING INCOME

7www.revenue.pa.gov

the name of the transaction and re-gardless of how it reports for federalincome tax purposes. Use PA-20S/PA-65 Schedule M to classifyfederal income (loss) for Pennsylva-nia personal income tax purposes. Please review the PA-20S/PA-65 Schedule M instructions on thedepartment’s website at www.revenue.pa.gov.

NOTE: Pennsylvania personalincome tax law taxes resident

partners, shareholders and members(owners) on income from sourceswithin and outside Pennsylvania andtaxes nonresident owners on Pennsyl-vania-source income only.

Starting with tax years beginning on orafter Jan. 1, 2006, all corporations, in-cluding those incorporated in a stateother than Pennsylvania, with a validfederal subchapter S election are con-sidered Pennsylvania S corporationsand are no longer required to file thePennsylvania S Corporation Electionand Shareholders’ Consent form (REV-1640) in order to be a Pennsylvania Scorporation. Under Act 67 of 2006, allfederal subchapter S corporations arePennsylvania S corporations. Act 67also includes a provision for federalsubchapter S corporations to make anelection to not be taxed as a Pennsyl-vania S corporation. To make this elec-tion, the taxpayer is required to file acompleted REV-976, Election Not to beTaxed as a Pennsylvania S Corpora-tion on or before the due date, or ex-tended due date, of the report for thefirst period in which the election is to bein effect.

NOTE: 72 P.S.§7301(n.1) stipu-lates all federal S corporations

filling in Pennsylvania are automati-cally PA S corporations.

An election to not be taxed as a PA Scorporation may not be revoked for fiveyears from the date it went into effect.

A revocation received within this fiveyear period will be effective for the firsttax period for which the taxpayer is el-igible to revoke the election.

Elections which first went in effect in2011 may be revoked for 2016. To revoke the election the corporation mustsend a letter signed by shareholdersholding more than one-half of theshares of stock of the corporation on theday on which the revocation is made.This letter must contain the name of thecorporation, the federal employer iden-tification number (FEIN), the PA S cor-poration’s 10-digit Revenue ID orseven-digit PA Account ID and the effec-tive date of the revocation. If no effectivedate is provided the revocation will beeffective for the first tax period for whichthe revocation was timely submitted. Inthe case of a corporation with qualifiedsubchapter S subsidiaries, the lettermust include the name and 10-digitRevenue IDs, if applicable, of all quali-fied subchapter S subsidiaries doingbusiness in Pennsylvania.

Mail the letter to: PA DEPARTMENT OF REVENUE BUREAU OF CORPORATION TAXES PROCESSING DIVISION PO BOX 280705 HARRISBURG PA 17128-0705

The due date for filing the Election Notto be Taxed as a Pennsylvania S Cor-poration, REV-976, is the due date orthe extended due date of the PA corpo-rate net income tax report for the firstyear for which the election is to be ineffect. A revocation submitted after thedue date will be in effect for the nexttax period.

Fed/State Electronic Filing forS Corporations and PartnershipsThe department will accept original andamended PA S Corporation/Partner-ship Information Returns (PA-20S/PA-65) including corresponding forms andschedules filed through the Modern-ized e-File (MeF) platform provided bythe IRS (also known as the Fed/Statee-File).

IMPORTANT: An amended PA-20S/ PA-65 Information Return

filed through Fed/State e-File will onlybe accepted for 2014 tax year returnsand forward. You may not file anamended PA-20S/PA-65 InformationReturn through Fed/State e-File priorto 2014 tax year return. See How ToAmend a PA-20S/PA-65 InformationReturn prior to 2014 tax year return.

Fed/State e-File allows you to file fed-eral and state returns together or sep-arately. It is available through taxpreparers or computer software. Whenyou file using Fed/State e-file, the de-partment sends an acknowledgementdirectly to you, your tax professional orElectronic Return Originator (ERO).Whoever submits the tax return will re-ceive the acknowledgement.

The PA-20S/PA-65 Information Returncan be filed through Fed/State e-Filethrough an approved vendor that hastested with and been approved by thedepartment to offer electronic filing in Pennsylvania. Even if a vendor isfederally approved they must also be approved by Pennsylvania. As a result, every year vendors must gothrough a testing process for the department's approval of their soft-ware. When the vendors complete thetesting process, they will be listed on Revenue’s e-Services Center atwww.doreservices.state.pa.us.

NOTE: Mandatory e-filing is re-quired for third-party preparers

who prepare 11 or more PA-20S/PA-65returns. The department published a“Method of Filing” notice [43 Pa.B.5772] for electronic filing requirementsin a Pennsylvania Bulletin on the PADepartment of Revenue website. Oncesubject to this mandate, the preparermust continue to e-file regardless ofhow many returns are prepared duringa calendar year.

Tax filers may direct third party prepar-ers to file returns in a different methodthan mandated.

Electronically Filed Returnswith AttachmentsWhen the PA-20S/PA-65 S Corpora-tion/ Partnership Information Return isfiled through the Fed/State e-File, all

PENNSYLVANIA S CORPORATION S STATUS

REVOCATIONS

ELECTRONIC FILING

PENNSYLVANIA S CORPORATION S STATUS

(S ELECTIONS)


attachments other than the PA-20S/PA-65 schedules must be sent inPDF format.

Examples of other attachments to anelectronically filed PA-20S/PA-65 Infor-mation Return may include statementsrequired with the PA-20S/PA-65 Infor-mation Return; PA Schedules RK-1and NRK-1 that a pass through entityreceives from another pass throughentity; federal Form 8824, Like-KindExchanges; federal Form 3115, Appli-cation for Change in AccountingMethod; and federal Form 7004, Appli-cation for Automatic Extension of TimeTo File.

The department will consider the taxreturn incomplete if all required docu-ments are not submitted with an elec-tronically filed return.

IMPORTANT: Do not include thePA-20S/PA-65 Schedules RK-1

and NRK-1 that the entity issues to itsowners as a PDF attachment. Theseschedules are part of the e-File pack-age for the PA-20S/PA-65 InformationReturn.

Fed/State Electronic Filing Optionfor Estimated Nonresident Individual Quarterly Withholding PaymentsThe department accepts through theMeF Fed/State program the electronicpayment of the quarterly estimatedwithholding tax for nonresident ownersfiled with the PA-65ESR. The followingtypes of payments can be electroni-cally transferred if filed throughFed/State e-File program: ● Final nonresident individual tax

withholding tax “catch-up” pay-ment submitted with the 2016 taxyear PA-20S/PA-65 InformationReturn; and

● 2017 (future) estimated paymentsfor nonresident individual quarterlywithholding tax submitted with the2016 tax year PA-20S/PA-65 Infor-mation Return; and

● PA-65ESR Quarterly EstimatedPayments for nonresident individ-uals.

Future estimated nonresident individ-ual tax withholding payments for taxyear 2017 will be stored in the systemas separate electronic transaction pay-ments until the specified due date.

IMPORTANT: The nonresidentindividual quarterly withholding

payment may not be submitted throughElectronic Funds Transfer (EFT),credit/debit cards or e-TIDES.

Payment Not Submitted withElectronic ReturnIf the PA-20S/PA-65 Information Return has been electronically submit-ted and the nonresident withholdingwas not sent at the time of electronicsubmission of the return, then you may send a paper check for the non-resident withholding.

You may send in the PA-40 ESR(F/C) with a check if the entity

electronically files the PA-20S/PA-65Information Return. Submit a check ormoney order made payable to the PADept. of Revenue along with the PA-40ESR (F/C). Print the entity's federalemployer identification number (FEIN)and “2016 Final Nonresident Withhold-ing” on the check or money order.

CAUTION: Failure to include thePA-40 ESR (F/C) with your check

will result in a delay of processing.

Mail the payment to:

PA DEPARTMENT OF REVENUE BUREAU OF INDIVIDUAL TAXES PO BOX 280502 HARRISBURG PA 17128-0502

For payment by check with paper taxreturn, See How To Pay.

Prior to 2014 Tax Year ReturnIf after filing the PA-20S/PA-65 Infor-mation Return, the entity discovers thatan incorrect PA-20S/PA-65 tax returnhas been submitted to the departmentand/or has amended federal Form1065 or 1120S or if the IRS changed orcorrected any items of income, gain orloss previously reported, the entitymust submit an amended PA-20S/PA-

65 Information Return to the Pennsyl-vania Department of Revenue.

Prior to the 2014 tax year return, anamended PA S Corporation/Partner-ship Information Return (PA-20S/PA-65) cannot be filed through Fed/Statee-File Program.

When amending a PA-20S/PA-65 Information Return that was originallyfiled through Fed/State e-File, the entity must: ● Obtain the paper form PA-20S/PA-

65 Information Return for the yearthe entity wants to amend. Do notsubmit a photocopy of youroriginal PA-20S/PA-65 Informa-tion Return;

● Complete the amended return in-cluding all schedules by enteringthe corrected information and sub-mit it with the amended PA-20S/PA-65 Schedules RK-1 and/orNRK-1;

● Clearly mark the “Amended Infor-mation Return” oval on PA-20S/PA-65 Information Return and the“Amended Schedule” oval on theSchedules RK-1 and/or NRK-1;

● Enter the amended amounts andenclose a statement explaining thereasons an amended return isbeing filed. Submit only the formsor schedules supporting theamended amounts;

● Provide a copy of the amendedPA-20S/PA-65 Schedules RK-1and/or NRK-1 to the partners,shareholders or members; and

● Enclose a copy of the amendedfederal Form 1120S or federalForm 1065.

Tax Year Return 2014 and ForwardFor tax years 2014 and forward, the de-partment will accept amended PA-20S/PA-65 Information Returnsincluding corresponding forms andschedules filed through Fed/State e-File.To file a 2014 or later amended return through Fed/State E-File, visitRevenue’s e-Services Center atwww.doreservices.state.pa.us.Follow all the steps listed above under“Prior to 2014 Tax Year Return” withexception to the first bullet referencinga paper return.

HOW TO PAY ELECTRONICALLY

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9www.revenue.pa.gov

Over-Reported IncomeIf the entity over reported income,failed to claim allowable credits, failedto report allowable deductions, orevents transpired that decreased its re-portable Pennsylvania-taxable income,including an IRS Report of Change, theentity must file an amended PA-20S/PA-65 Information Return.

The amended return must be filedwithin three years of the original duedate or extended due date of the PA-20S/PA-65 Information Return. Theamended PA-20S/PA-65 SchedulesRK-1 and/or NRK-1 must show the cor-rected Pennsylvania-taxable income,so the shareholders or partners can re-quest refunds of Pennsylvania incometax they overpaid.

In order to obtain any refunds, ownersmust also file an amended Pennsylva-nia tax return within three years of theoriginal due date of their return. SeeHow To Amend a PA-20S/PA-65 Infor-mation Return.

Under-Reported IncomeIf the entity under reported inc-ome, erroneously claimed credits ordeductions to which it was not entitled,or events transpired that increased re-portable Pennsylvania-taxable income,including an IRS Report of Change, theentity must file an amended PA-20S/PA-65 Information Return within30 days from the determination of suchincrease. The amended PA-20S/PA-65Schedules RK-1 and/or NRK-1 mustshow the corrected Pennsylvania-tax-able income so the shareholders orpartners can pay the tax due.

The entity and owners must also file anamended Pennsylvania tax returnwithin 30 days of the discovery of theerror to report any increase in incomefor taxes due. See How To Amend aPA-20S/PA-65 Information Return.

IMPORTANT: There is no statueof limitations to file an amended

return when reporting additional in-come. Amended returns cannot befiled in response to a Department of

Revenue Assessment. In those cases,an appeal must be filed with the Boardof Appeals.

PA S Corporations and PartnershipsEach entity submits with the PA-20S/PA-65 Information Return a completecopy of its federal income tax returnincluding all schedules, statements,federal Schedules K-1, and PA-20S/PA-65 Schedules RK-1 and NRK-1 received from other pass throughentities.

With the PA-20S/PA-65 InformationReturn, the entity must also submitcopies of the PA-20S/PA-65 SchedulesRK-1 that it provides to resident partners/shareholders (owners) andcopies of the PA-20S/PA-65 SchedulesNRK-1 that it provides to nonresidentowners.

PA S Corporations and Partnerships as Owners of AnotherPass Through EntityIf the shareholder, partner, member(owner) of a PA S corporation, partner-ship, limited liability company or a ben-eficiary of a trust or estate is classifiedas a pass through entity, the issuingentity must provide the entity ownerwith both PA-20S/PA-65 SchedulesRK-1 and NRK-1 showing the entityowner’s share of the income (loss)passed through from the issuing entityin the same class in which the issuingentity distributed the income to its en-tity owner.

When the entity owner receives a PA-20S/PA-65 Schedule RK-1 and NRK-1, it has the classified income (loss)amount to complete the PA-20S/PA-65Information Return, Parts I, II and III.The entity owner is required to file boththe PA-20S/PA-65 RK-1 and NRK-1with their PA-20S/PA-65 InformationReturn.

Example.When a PA S corporation re-ceives income from a partnership, thePA S corporation must file a copy of thePA Schedule RK-1 and NRK-1 it re-ceived from the partnership along withthe PA-20S/PA-65 Information Return.

Partnerships with C CorporationPartnersPartnerships or limited liability compa-nies classified as partnerships for fed-eral income tax purposes withoperations within Pennsylvania thathave corporate partners that have notfiled the RCT-101, PA Corporate TaxReport for the prior or current tax yearor whose partners are all C corpora-tions must file the PA-65 Corp, Direc-tory of Corporate Partners.

If the partners are all C corporations,the partnership: ● Must include a complete copy of

federal Form 1065 with the PA-65Corp, Directory of Corporate Part-ners; and

● Does not file a PA-20S/PA-65 In-formation Return.

For additional information, please re-view the instructions for the PA-65Corp, Directory of Corporate Partnerson the department’s website.

Limited Partnership Filing asDisregarded Entity for FederalIncome Tax PurposesIf an eligible entity has two membersunder local law but one of the members of the eligible entity is, forfederal income tax purposes, disre-garded as an entity separate from theother member of the eligible entity,then the eligible entity cannot be clas-sified as a partnership. The eligible en-tity is either disregarded as an entityseparate from its owner or an associa-tion taxable as a corporation.

Example. A limited partnership (LP A)is owned by a single-member limited li-ability company (SMLLC) and a limitedpartnership (LP B). The LP B owns 100percent of the SMLLC which gives LPB 100 percent control of LP A. The LPB is required to file the PA-20S/PA-65Information Return and report the in-come of both LP A and the SMLLC.

PA S Corporations and Partnerships Filing on Behalf of their Qualified Electing Nonresident Individual OwnersPA S corporations, partnerships andlimited liability companies classified aspartnerships and S corporations forfederal income tax purposes may file a

WHAT TO FILE

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composite return (PA-40 NRC, Nonres-ident Consolidated Income Tax Return)on behalf of their qualified nonresidentindividual owners who elect to be in-cluded in the composite filing.

For additional information, please re-view the instructions for the PA-40NRC, Nonresident Consolidated In-come Tax Return on the department’swebsite.

Individual Owners in a PA SCorporation, Partnership or Limited Liability Company Classified as a Partnership or SCorporation for Federal IncomeTax PurposesIndividual owners of an entity must re-port on the PA-40, Individual IncomeTax Return, their share of the income(loss), passed through from the entityin the same class in which the partner-ship or PA S corporation reported theincome to its individual owners, asshown on their PA Schedules RK-1and/or NRK-1.

Classified as a C CorporationA limited liability company that elects tofile as a C corporation for federal in-come tax purposes files as a C corpo-ration for Pennsylvania and is subjectto Pennsylvania corporate net incometax, reported on the RCT-101, PA Cor-porate Tax Report. A limited liabilitycompany that files as a C corporationwith the IRS does not file the PA-20S/PA-65 Information Return.

Classified as an S CorporationA limited liability company that elects tofile as an S corporation for federal in-come tax purposes and has notelected out of PA Subchapter S statusfor Pennsylvania by filing form REV-976, Election Not To Be Taxed as APennsylvania S Corporation, must fileas an S corporation for Pennsylvaniausing the PA-20S/PA-65 InformationReturn. The members are subject toPennsylvania personal income tax.

Classified as a PartnershipA limited liability company that elects to file as a partnership for federal in-come tax purposes files as a partner-ship for Pennsylvania using thePA-20S/PA-65 Information Return. Themembers are subject to Pennsylvaniapersonal income tax.

1. Income Reported on Federal Tax Return of an IndividualFor personal income tax purposes, asingle-member limited liability com-pany owned by an individual or a lim-ited liability company jointly owned bya taxpayer and spouse is a disre-garded entity. The income of the limitedliability company is reported on PA-40Schedule C, Profit or Loss from Busi-ness or Profession, or PA-40 ScheduleE, Rent and Royalty Income (Loss), ofthe member’s PA-40, Individual In-come Tax Return, and the single-mem-ber limited liability company does notfile a PA-20S/PA-65 Information Re-turn.

2. Income Reported on Federal Tax Return of another Business EntityThe income of a single-member limitedliability company owned by another en-tity is reported on the tax return of themember as if earned by the member.

Qualified Subchapter S Subsidiaryand its Parent S CorporationPennsylvania personal income tax lawdoes not treat a qualified subchapter Ssubsidiary (QSSS) owned by a PA Scorporation (parent) as a separate cor-poration for personal income tax.

Pennsylvania personal income tax lawtreats all assets, liabilities and items ofincome, deduction and credit of aQSSS as assets, liabilities and items ofincome, deduction and credit of theparent PA S corporation for income taxpurposes.

The parent PA S corporation must re-port the assets, liabilities and items ofincome, deduction and credit of theQSSS on the parent’s PA-20S/PA-65Information Return.

NOTE: Shareholders receive theincome distribution from the par-

ent corporation, not from each QSSS.

The following provisions apply only toa qualified subchapter S subsidiary inPennsylvania: ● A QSSS cannot elect corporation

treatment independent of its parentcorporation.

If a QSSS and/or parent of aQSSS does not desire to be taxedas a PA S corporation, the parentmust file REV-976, Election Not tobe Taxed as a Pennsylvania SCorporation, for itself and allQSSS(s). The parent corporationsubmits a schedule with the elec-tion identifying the name, address,the PA S corporation’s Revenue IDand federal employer identificationnumber (FEIN) of each QSSSowned by the corporation anddoing business in Pennsylvania.

● The parent corporation is not re-quired to register with the Depart-ment of State if its only activity inPennsylvania is its investment inthe QSSS that is registered inPennsylvania.

The parent is required to file aPA-20S/PA-65 Information Re-turn and list the QSSS(s) on PartIX and include all of the QSSS’items of income, deduction andcredit on the return. There is noownership percentage for theQSSS because it is a division ofthe parent company.

Since the QSSS is a division of theparent company, the QSSS is notincluded on the Partner/Member/Shareholder Directory. Only theowners of the parent company arelisted on the directory.

The parent PA S corporationmay also file the PA-40 Non-

resident Consolidated Income TaxReturn (NRC) for its nonresidentowners if they meet the parame-ters. See the PA-40 NRC instruc-tions on the department's website.

Assemble the PA-20S/PA-65 Informa-tion Return, forms and schedules in thefollowing order: ● Signed original PA-20S/PA-65 In-

formation Return (Pages 1 through3). Do not mail a photocopy;

● PA Schedule P-S KOZ – attach be-hind the information return;

CLASSIFIED AS A SINGLE-MEMBERLIMITED LIABILITY COMPANY

ASSEMBLING THE PA-20S PA-65 S CORPORATION/

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11www.revenue.pa.gov

● PA-20S/PA-65 Partner/Member/Shareholder Directory;

● PA-20S/PA-65 Schedule D-I, D-II,D-III and D-IV;

● PA-20S/PA-65 Schedule E; ● PA-20A/PA-65 Schedules RK-1

that the entity provides to residentowners;

● PA-20S/PA-65 Schedules NRK-1that the entity provides to nonresi-dent owners;

● PA-20S/PA-65 Schedule M; ● PA-20S/PA-65 Schedule OC and

the required supporting documentsfor claiming any of the businesscredits allowed by Pennsylvanialaw;

● PA-20S/PA-65 Schedule A; ● PA-20S/PA-65 Schedule B; ● PA-20S/PA-65 Schedule H; ● PA-20S/PA-65 Schedule H-Corp; ● PA-20S/PA-65 Schedule NW; ● PA-20S/PA-65 Schedule J; ● PA-20S/PA-65 Schedule T; ● PA-20S/PA-65 Schedule I; ● All other required supporting

and supplemental documentation,including a copy of the federal extension.

NOTE: A complete copy of thefederal Form 1120S, U.S. In-

come Tax Return for an S Corporation,or Form 1065, U.S. Return of Partner-ship Income, including all schedules,statements and federal Schedules K-1now must be included with the entity’sPA-20S/PA-65 PA S Corporation/ Part-nership Information Return. Assemble documents in the

order above. ● Do not staple documents. ● On all additional statements in-

cluded with the return, please in-clude the entity’s name, FEIN, taxyear and brief line reference to PA-20S/PA-65 Information Return orPA-20S/PA-65 Schedules.

● Do not include federal returns orfederal Schedules K-1 in CD for-mat. The PA-20S/PA-65 Informa-tion Return will be consideredincomplete if the federal informa-

tion is not included with the paperreturn.

IMPORTANT: Do not create asubstitute PA-20S/PA-65 Infor-

mation Return that has not been approved by the department. Aspreadsheet is an unapproved and un-acceptable tax form. Unapproved taxforms filed with the department may berejected and returned to the taxpayeror tax return preparer. This may resultin an assessment of interest andpenalty.

If filing any tax form other than an offi-cial tax form, please review Miscella-neous Tax Bulletin 2008-02 on thedepartment’s website.

Estimated Quarterly Tax Paymentsfor Resident OwnersIndividual resident partners andshareholders (owners) are subject tothe estimated quarterly tax provisionsunder the Pennsylvania Income TaxAct.Resident owners must file declarationsand make quarterly estimated Pennsyl-vania tax payments if they reasonablyexpect income, other than compensa-tion on which Pennsylvania tax is with-held, to exceed $8,000.The individual owners use REV-414I,Individuals Worksheet, and REV-413I,Instructions for Estimating PA PersonalIncome Tax (For Individuals Only), todetermine the proper amount of esti-mated tax payments.

Estimated Quarterly Withholding Payments for Nonresident OwnersUnder Act 22 of 1991, entities mustwithhold and pay quarterly Pennsylva-nia personal income tax for nonresi-dent partners and shareholders(owners) that are individuals, estatesor trusts.This quarterly withholding tax paymentis based on each nonresident owner’sexpected share of distributable Penn-sylvania-source taxable income.When there has been a change in anaccounting period that requires filing ofa short-year return, the tax is calcu-

lated on an annualized basis. SeeShort-Year Return.The entity must indicate the amount ofPennsylvania personal income tax itwithheld for each nonresident on thePA-20S/PA-65 Schedule NRK-1 andprovide the PA-20S/PA-65 ScheduleNRK-1 to each nonresident owner.The entity uses REV-414 P/S, Partner-ships and PA S Corporations WithholdingTax Worksheet, and REV-413 P/S, Instructions for Withholding PA Personal Income Tax from Nonresident Owners by Partnerships and PA S Corporations,to determine the proper amount of withholding.Partnerships or PA S corporations filinga nonresident quarterly withholding taxreturn for the first time should use PA-40ESR (F/C), Declaration of EstimatedTax or Estimated Withholding Tax forFiduciaries and Partnerships. There-after, the department will providepreprinted forms PA-40ES (P/S).The partnership or PA S corporationmakes the initial quarterly tax withhold-ing payment and all future quarterly taxwithholding payments under the federalemployer identification number, nameand address of the entity.

CAUTION: Do not use theseven-digit PA Account ID num-

ber or the 10-digit Revenue ID numberfor submitting non-resident withholdingpayments.

IMPORTANT: An entity cannotwithhold Pennsylvania personal

income tax on another entity or aPennsylvania resident individual, andshould not withhold Pennsylvania per-sonal income tax on income from in-tangibles such as interest, dividends orsale of stock.

If the entity did not make any orsufficient estimated quarterly

withholding tax payments for its non-resident owners, a final payment orcatch-up payment can be made withthe filing of the PA-20S/PA-65 Informa-tion Return or PA-40 NRC, Nonresi-dent Consolidated Income Tax Return.Failure to remit withholding paymentsfor all nonresident owners on a quar-terly basis will result in the impositionof interest, penalty and underpayment

ESTIMATED QUARTERLY TAX PAYMENTS

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penalty. See Final Payment of Nonres-ident Withholding Tax for how andwhere to send the final nonresidentwithholding tax payment with the PA-20S/PA-65 Information Return.Please review the instructions on thedepartment’s website for the PA-40NRC, Nonresident Consolidated In-come Tax Return, for how and where to send the final nonresident withhold-ing tax payment with the PA-40 NRC,Nonresident Consolidated Income TaxReturn.Be sure to review the electronic option.See Fed/State Electronic Filing Optionfor Estimated Nonresident IndividualWithholding Payments.Overpayment/Adjustment of Withholding Tax for Nonresident OwnersThe PA-20S/PA-65 PA S Corporation/Partnership Information Return is forinformation purposes only.

It is not a return where you can indicatea refund or carry-forward credit. Pay-ments submitted to this account are fornonresident tax withholding only andare held for transfer to the partner,member or shareholder (owner) as in-dicated on their individual tax returns.The department will not make the as-sumption that the entity paid more thanwas needed.

Under Act 22 of 1991, entities mustwithhold quarterly Pennsylvania per-sonal income tax from nonresidentpartners and shareholders (owners)that are individuals, estates or trusts.This withholding tax is based on eachnonresident owner's expected share ofdistributable Pennsylvania-source tax-able income. The partnership, PA Scorporation or limited liability companyclassified as a partnership or PA S cor-poration is required to remit the with-holding tax to the department on aquarterly basis.

If the entity overpaid the nonresidentwithholding tax, the entity should passthrough the total nonresident owners’withholding tax payment (including theoverpayment) as PA Nonresident TaxWithheld on Line 6 of their PA Sched-ule NRK-1. The owners can then in-clude the Line 6 amount as a taxpayment on their respective PA-40,

Pennsylvania Income Tax Return, onPage 2, Line 17, Nonresident Tax With-held from your PA Schedule(s) NRK-1.

If the entity did not pass through theoverpayment of nonresident tax with-holding to its nonresident owners onPA Schedule NRK-1, and if the entitywants a refund or to carry forward tothe next tax year the entire amount oftax withheld or the excess over thewithholding passed through to the non-resident owners that are individuals,estates or trusts (providing the entitydid not file a PA-40 Nonresident Con-solidated Income Tax Return), the entity must submit a written request to: PA DEPARTMENT OF REVENUE BUREAU OF INDIVIDUAL TAXES NONRESIDENT WITHHOLDING TAX REFUND PO BOX 280600 HARRISBURG PA 17128-0600

The request must be on company let-terhead and include the entity’s name,federal employer identification number,tax year, Social Security number(s) ofthe owner(s), amount of nonresidentwithholding paid, amount of nonresi-dent withholding tax liability, the re-quested refund amount and/orcarry-forward to the next tax year ofnonresident withholding and reason forthe request.

File the PA-20S/PA-65 Information Re-turn for the current calendar year or thefiscal year that begins in the current taxyear and ends in the next tax year. Usethe current tax year return for a taxyear of less than 12 months that beginsand ends in the current tax year.

To remain consistent with the federaltax due date, the due date for filing2016 Pennsylvania tax returns will beon or before midnight, April 18, 2017.The U.S. Postal Service postmark dateon the envelope is proof of timely filing.If the return cannot be filed by the duedate, request an extension of time tofile.

For a calendar-year filer, file the currenttax year PA-20S/PA-65 InformationReturn and PA-20S/PA-65 SchedulesRK-1 and NRK-1 on or before April 18,

2017, including an extension date ofSept. 15, 2017.

For a fiscal-year filer, file the current taxyear PA-20S/PA-65 Information Returnand PA-20S/PA-65 Schedules RK-1 andNRK-1 on or before the 15th day of thefourth month following the close of thefiscal year including an extension dateof five months after the original due date.If the due date falls on a Saturday,Sunday or business holiday, the entitymust file the PA-20S/PA-65 InformationReturn no later than midnight on thefirst business day following the Satur-day, Sunday or business holiday. TheU.S. Postal Service postmark date onthe envelope is proof of timely filing.

If the entity cannot file by the originaldue date, request an extension of timeto file. See Extension of Time To File.

If the entity does not file its return bythe original due date or extended duedate and does not pay the tax due bythe original due date, the departmentimposes late filing and underpaymentpenalties.

Tax YearsPennsylvania follows the same taxyear as federal rules.

Calendar-Year EntityAn entity that files on a calendar yearbasis reports all taxable income recog-nized between Jan. 1 and Dec. 31.See When To File.

Fiscal-Year EntityA fiscal year is a period of 12 consecu-tive months without regard to the calendar year. The fiscal year is desig-nated by the calendar year in which itbegins. A fiscal-year entity reports alltaxable income recognized during thefiscal year. See When To File.

An entity may use a 52/53 week tax-able year if it keeps its books on thatbasis.

Changing From a Fiscal-Year Entityto a Calendar-Year EntityTo change from a fiscal-year filer to acalendar-year filer, the entity files ashort-year return. See Short-Year Re-turn. The entity then files the next cal-endar year on or before April 18, 2017,including an extension date of Sept.15, 2017.

WHEN TO FILE


The entity is also required to submit acopy of its federal election Form 1128,Application to Adopt, Change or Retaina Tax Year, with both the short-year re-turn and the calendar-year return.Short-Year ReturnA short year is an accounting periodshorter than one year and not a 52/53week taxable year.

A short-year return is required for thefollowing reasons: ● Changes in the annual accounting

period. For example, the entitychanges from a fiscal-year filer toa calendar-year filer; or

● An entity is in existence duringonly part of the tax year. For exam-ple, if the year is the initial year orfinal year for all entities; or, if thepartnership or an entity formed asa limited liability company classi-fied as a partnership for federal income tax purposes sells or exchanges 50 percent or more of ownership interest (technicaltermination).

NOTE: When there has been achange in an accounting period

that requires filing of a short-year re-turn, the nonresident withholding tax iscalculated on an annualized basis.How To File a Short-Year ReturnIf the entity is required to file a short-year return, the entity must use themost recent PA-20S/PA-65 InformationReturn, schedules and forms on thedepartment’s website.If the tax year on the forms is not thecurrent tax year and/or the tax year forwhich the entity is filing, then the entitymust cross out and write the correct taxyear for which it is filing a short-year return.

IMPORTANT: Short-year returnsare due on the 15th day of the

fourth month following the end of theshort period.

If the entity is a calendar-yearfiler and files a short-year return,

do not fill in the fiscal-year oval. Ashort-year return is not a fiscal-year return.Technical TerminationA technical termination occurs whenthere is a sale or exchange of 50

percent or more of the total interest inthe partnership capital and profitswithin a 12-month period and the tax-able year of the partnership closes.

The terminating partnership is requiredto file a short-year PA-20S/PA-65 Infor-mation Return for the taxable year end-ing with and including the date of itstermination.

The new partnership is required to filea PA-20S/PA-65 Information Return forits taxable year beginning after thedate of termination of the terminatedpartnership. The new partnership re-tains the employer identification num-ber of the terminated partnership andits Revenue ID if it is a limited liabilitycompany.

When the new partnership files its PA-20S/PA-65 Information Return, it is re-quired to list on the Partner/Member/Shareholder Directory all partners/members/shareholders (owners) in-volved with the entity within the taxyear or in this case, short year.

If the entity cannot file the PA-20S/PA-65 Information Return on or before theoriginal return due date, the entity canuse REV-276, Application for Exten-sion of Time to File, to file for a five-month extension. The department willnow accept REV-276 Application forExtension of Time to File the PA20S/PA65. Information Return through theMeF Fed/State e-file program. SeeHow to Obtain an Extension of Time toFile.

The department will not grant an exten-sion for more than five months, exceptfor taxpayers outside the U.S.

An extension of time to file does not ex-tend the payment deadline. Pay in fullthe amount reasonably estimated asthe entity’s Pennsylvania tax due on orbefore the original return due date.

How To Obtain an Extension of Time to FileFollow one of these procedures whenapplying for an extension of time to file:1. If the entity owes catch-up nonres-

ident withholding tax with the

PA-20S/PA-65 Information Return,the entity may either pay by checkwith a timely filed REV-276, Appli-cation for Extension of Time to Fileor submit the application and pay-ment through the MeF Fed/Statee-file program on or before theoriginal return due date. The returndue date is usually April 15 for cal-endar-year filers and the 15th dayof the fourth month following theclose of the fiscal year for fiscal-year filers. The department will notsend a letter granting the exten-sion but it will write if there is aquestion concerning the request.

2. If the entity has an extension of timeto file federal Form 1065 or federalForm 1120S and does not owePennsylvania nonresident withhold-ing tax on the PA-20S/PA-65 Infor-mation Return, the department willautomatically grant the entity a five-month extension of time to file thePA-20S/PA-65 Information Return.The entity is not required to submitREV-276 or federal Form 7004 be-fore the original return due date.However, federal Form 7004 mustbe submitted with the filing of thePA-20S/PA-65 Information Return.

3. If the entity does not have an ex-tension to file federal Form 1065 orfederal Form 1120S, request anextension on REV-276, and file itin sufficient time for the depart-ment to consider and act upon itprior to the original return due date.The REV-276 can be filed elec-tronically through the MeFFed/State program.CAUTION: The REV-276 can befiled in paper form or electroni-

cally. If the entity filed the PA-20S/PA-65 Information Return and did not filethe REV-276 but requested an exten-sion for the federal return, federal Form7004 can be substituted for the REV-276. In such cases, include a copy ofthe federal Form 7004 with the PA-20S/PA-65 Information Return.

A five-month extension of time to filerequires PA Schedules RK-1 and NRK-1 to be filed one month earlier and al-lows owners time to prepare and filetheir personal income tax returns within

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the normal six-month time period for in-dividuals.

Qualifying for the ExtensionWhen an entity requests an extensionof time to file, it does not extend thefiling time for its owners. Each ownermust individually obtain an extensionof time to file the PA-40, Individual Income Tax Return, PA-41, FiduciaryIncome Tax Return, or PA-40 NRC,Nonresident Consolidated Tax Return.

An extension of time to file a PA-20S/PA-65 Information Return does not ex-tend the time for full payment of thecatch-up nonresident withholding tax,nor does it preclude an assessment ofinterest and penalty for late paymentand underpayment of tax due.

To get the extra time to file you must:1. Properly estimate the current year

nonresident withholding tax liabilityusing the information available to you.

2. Enter the tax liability on REV-276.3. File REV-276 by the original due

date of the return along with acheck or money order for the cur-rent year tax liability, or file elec-tronically through the MeFFed/State program.

Mail REV-276 To: PA DEPARTMENT OF REVENUE BUREAU OF INDIVIDUAL TAXES PO BOX 280504 HARRISBURG PA 17128-0504

How to File the PA-20S/PA-65Information Return with anExtensionWhen filing a PA-20S/PA-65 Informa-tion Return for which an extension wasrequested, the entity must: ● Fill in the “Extension Requested”

oval at the top of the PA-20S/PA-65 Information Return;

● Submit a copy of federal Form7004 with the PA-20S/PA-65 Infor-mation Return if the entity did notfile REV-276, Application for Ex-tension of Time to File;

● Submit a statement with the fed-eral confirmation number receivedif the entity electronically filed afederal extension and did not fileREV-276;

● List the extension payment amounton the statement and be sure to include the total nonresident with-holding payments on PA-20S/PA-65 Schedule NW, Line B.

NOTE: Do not submit REV-276,Application for Extension of Time

to File, with the PA-20S/PA-65 Informa-tion Return.Extension Due DatesSee When To File.

The entity must submit the PA-20S/PA-65 Information Return, the PA-20S/PA-65 supporting schedules and thePA-20S/PA-65 Schedules RK-1 and/orNRK-1, and if applicable, the final with-holding payment or “catch-up” payment.Where the entity should mail the PA-20S/PA-65 Information Return de-pends whether there is a finalwithholding payment or “catch-up” payment. Choose the appropriate mailing address:Without Payment: PA DEPARTMENT OF REVENUE BUREAU OF INDIVIDUAL TAXES PO BOX 280509 HARRISBURG PA 17128-0509With Payment: PA DEPARTMENT OF REVENUE BUREAU OF INDIVIDUAL TAXES PO BOX 280502 HARRISBURG PA 17128-0502See Final Payment of NonresidentWithholding Tax for how and where tosend the final nonresident withholdingtax payment.

Final Payment of NonresidentWithholding TaxPayment by CheckIf your tax preparation software printsa Nonresident Withholding Voucherfacsimile approved by the Departmentof Revenue, that voucher may be usedwhen no preprinted voucher (PA-40ES(P/S)) is available. Mail the voucherand check to the department. SeeWhere to File.In the event the entity does not have apreprinted voucher and your software

is unable to produce a department ap-proved facsimile, make the check ormoney order payable to PA Dept. ofRevenue. Write the entity’s federal em-ployer identification (FEIN) and 2016Final Nonresident Withholding on thecheck or money order. The departmentwill need the entity’s FEIN to accuratelyapply the payment. See Where to File.

Do not staple the check or moneyorder to the return.

Electronic Payment See Fed/State Electronic Filing OptionFor Estimated Nonresident IndividualQuarterly Withholding Payments.

IMPORTANT: The nonresidentindividual quarterly withholding

tax payment may not be submittedthrough Electronic Funds Transfer(EFT), credit/debit cards or e-TIDES.

Mailing Address for Final Withholding PaymentSee Where To File.

RECORDKEEPINGAn entity must retain all books andrecords for at least seven years. Allamounts reported on the PA-20S/PA-65 Information Return, schedules andforms are subject to verification andaudit by the department.

Information that substantiates the cal-culation of basis for an entity or individ-ual, in any investment (partnership, Scorporation, stocks, bonds, real estate,etc.), must be retained indefinitely orfor at least four years after the invest-ment is sold.

Information that substantiates the cal-culation of basis in an investment shallinclude but not be limited to brokerstatements, Pennsylvania and otherstates’ income tax returns, PA-20S/PA-65 Schedules RK-1, closing state-ments, etc.

Foreign Address StandardsIf the entity is located outside the U.S., itis important to write the foreign address

WHERE TO FILE

HOW TO PAY

COMPLETING PA-20S/PA-65

INFORMATION RETURN


on the PA-20S/PA-65 Information Re-turn, according to U.S. Postal Servicestandards.

Failure to use these standards maydelay processing or correspondencenecessary to complete the processingof the return.

To comply with foreign address stan-dards, use the following rules whencompleting the address portion of thePA-20S/PA-65 Information Return. ● Eliminate apostrophes, commas,

periods and hyphens. Write the ad-dress in all uppercase letters. Ad-dresses should have no more thanfive lines and must be written in inkor typewritten. Pencil is unaccept-able.

● Write the name of the entity in thespaces provided. Mail may not beaddressed to a person in onecountry “in care of” a person in an-other country. The address ofitems sent to general delivery mustindicate the addressee’s full legalname.

● Write the address in the space pro-vided, including street and buildingname and number, apartment orsuite numbers, city name and cityor provincial codes. All lines of thedelivery address should appear inall capital letters. The house num-ber and street address or boxnumber must appear when mail isaddressed to towns or cities.

● Write only the name of the countryin the space provided for the city orpost office.

● Do not include any entries in thestate field other than “OC” for Out-of-Country. The ZIP Code spacesshould remain blank on the PA-20S/PA-65 Information Return.Providing the address in this for-mat will better ensure that the de-partment is able to contact theentity if we need additional infor-mation.

Below are two examples of properlycompleted foreign addresses:Foreign Address ExamplesName: DIETRICH ENTERPRISESAddress 1: HARTMANNSTRASSE 7Address 2: 5300 BONN 1

City: GERMANYState: OCZIP Code: Leave Blank

ORName: DIETRICH ENTERPRISESAddress 1: 117 RUSSELL DRAddress 2: LONDON W1PGHQCity: ENGLANDState: OCZIP Code: Leave Blank

Canada (Only) Address ExampleThe following address format may beused when the postal address deliveryzone number is included in the ad-dress:

Name: NORTH BY NORTHWEST COAddress 1: 1010 CLEAR STAddress 2: OTTAWA ONT K1A OB1City: CANADAState: OCZIP Code: Leave Blank

If the entity’s address does not fit in theavailable spaces on the PA-20S/PA-65Information Return using this format,please include a separate statementwith the return showing the completeaddress.

NOTE: For a Canadian address,two spaces must exist between

the province abbreviation and thepostal code. Please review the exam-ple where “ONT” (province abbrevia-tion) and “K1A OBI (postal code) areseparated by two spaces in the ad-dress format.

Filing StatusFill in the oval for a PA S corporation(PA-20S) or partnership (PA-65).

P-S KOZFill in the oval if approved for the Key-stone Opportunity Zone and include aPA Schedule P-S KOZ – Keystone Op-portunity Zone.

Federal Employer IdentificationNumber (FEIN)Enter the entity’s nine-digit federal em-ployer identification number.

Revenue IDEnter the Revenue ID, if applicable.

The Revenue ID is a unique, 10-digitnumber assigned by the Department ofRevenue to replace the seven-digit TaxAccount ID number. The seven-digitTax Account ID number may be used ifthe 10-digit Revenue ID number is notknown.

North American Industry Classification System (NAICS) CodeProvide your six-digit federal NAICScode identified on Page 1 of your fed-eral Form 1120S or 1065.

Inactive OvalFill in the oval if the entity was inactiveduring the 12-month accounting pe-riod. The entity would still be requiredto file the PA-20S/PA-65 InformationReturn, but schedules and accompa-nying documentation do not need to besubmitted.

Business NameEnter the complete name of the entityor business.

First Line of AddressEnter the street address. If the addresshas an apartment number, suite or RRnumber, enter after the street address.Eliminate all punctuation such as apos-trophes, commas, periods and hy-phens.

NOTE: If the street addressalong with the apartment num-

ber, suite or RR number does not fit onthe first line of address, then enter thestreet address on the second line ofaddress and the apartment number,suite or RR number on the first line ofaddress.

Second Line of AddressEnter the post office box, if applicable.If there is no post office box, leave thesecond line of address blank. Eliminateall punctuation such as apostrophes,commas, periods and hyphens.

For a foreign address, enter the city ormunicipal designation. See ForeignAddress Examples.

For a Canadian address, enter the cityand postal delivery zone number. SeeCanada (Only) Address Example.

PAGE 1

TAX IDENTIFICATION NUMBERS


IMPORTANT: If the address hasonly a post office box, enter on

the first line of address.

City or Post Office, State and ZIP CodeEnter the appropriate information ineach box. Eliminate all punctuationsuch as apostrophes, commas, peri-ods and hyphens.

For Canadian and foreign addresses,the bottom line of the address shouldshow only the country name, written infull (no abbreviations) and in capital let-ters. See Foreign Address Exampleand Canada (Only) Address Example.

Method of AccountingIndicate whether the entity uses theaccrual, cash or other method of ac-counting. If other, please identify yourmethod of accounting on a supplemen-tal statement.

Income is calculated under the methodof accounting on which the entity reg-ularly calculates income in keeping itsbooks. If the department determinesthat no method has been regularlyused or the method used does notclearly reflect income, the calculationof income shall be made under amethod that clearly reflects income inthe opinion of the department.

IMPORTANT: If the entitychanges its method of account-

ing, it must submit a copy of its federalForm 3115, Application for Change inAccounting Method, with its PA-20S/PA-65 Information Return.

Extension RequestedFill in the oval if the entity requested anextension of time to file the PA-20S/PA-65 Information Return. If the entitydid not file REV-276, Application for Ex-tension of Time to File, submit a copyof federal Form 7004, Application forAutomatic Extension of Time to FileCertain Business Income Tax, Informa-tion, and Other Returns with the PA-20S/PA-65 Information Return. SeeExtension of Time To File.

Initial YearIf the entity is in the first year of opera-tions, fill in the oval.

Fiscal YearA fiscal year is a 12-month accountingperiod, other than a calendar year,ending on the last day of a particularmonth, for example July 1 to June 30of the following year.

The entity must use its federal taxableyear for Pennsylvania purposes.

If the entity does not file on a calendar-year basis, fill in the fiscal-year oval.Enter the month, day and year (MMD-DYY) when the fiscal year begins andends.

NOTE: A fiscal year includes any-thing other than a calendar year.

Do not fill in the fiscal-year ovalfor a calendar-year filer whose

initial year does not begin 01/01/20XXor for a calendar-year filer whose finalreturn does not end 12/31/20XX.

If the entity is a calendar-year filer andfiles a short-year return, do not fill inthe fiscal-year oval.

Short YearFill in the short-year oval if the entity isfiling a short-year return. Enter themonth, day and year (MMDDYY) whenthe short year begins and ends.

For more information about short-yearreturns, refer to Short-Year Return.

Final ReturnFill in the oval if the PA S corporationor partnership went out of businessduring its taxable year.

FEIN/Name/Address ChangeFill in the oval if the FEIN, name or ad-dress on the PA-20S/PA-65 Informa-tion Return differs from the last filedreturn.

Amended Information ReturnFill in the oval if amending the PA-20S/PA-65 Information Return. The entitymust also provide amended PA-20S/PA-65 Schedules RK-1 and NRK-1 toits owners.

For more information on amended re-turns, see How To Amend PA-20S/PA-65 Information Return.

Date Activity BeganIn PennsylvaniaThe entity must include the date activ-ity began in Pennsylvania.

If the entity is only filing the PA-20S/PA-65 Information Return because ithas a Pennsylvania resident share-holder or partner and has no Pennsyl-vania-source income, then the dateactivity began in Pennsylvania wouldbe the date the shareholder or partnermoved to Pennsylvania or the date apartnership or S corporation had a res-ident partner or shareholder invest inthe entity.

Total Taxable Business Income (Loss) from Operations EverywhereIn Part I, report the entity’s income(loss) from all business operationsfrom all sources within and from out-side Pennsylvania.

Taxable Business Income (Loss)from Operations EverywhereEnter the calculation from PA-20S/PA-65 Schedule M for the total amount oftaxable income (loss) from its own sep-arate operation of a business, profes-sion or farm from the books andrecords of the entity.

This is the entity’s total business in-come (loss) from all of its operationseverywhere. Do not include income(loss) received as an owner from otherentities providing PA-20S/PA-65Schedules RK-1 or federal SchedulesK-1 on Line 1a. Report only the income(loss) from an entity’s own operationsfrom all locations inside Pennsylvaniaand outside Pennsylvania. If a negativeamount, fill in the “loss” oval.

Share of Business Income (Loss)from All Other EntitiesEnter the share of net profit (loss) thatthe entity receives as a partner orshareholder (owner). Also completethe PA-20S/PA-65 Information Return,

FILL IN THE APPLICABLE OVALS

LINE INSTRUCTIONS

PAGE 1 - PART I

LINE 1a

LINE 1b


Part IX on Page 3. If a negativeamount, fill in the “loss” oval.

If the entity completing the PA-20S/PA-65 Information Return received aPA-20S/PA-65 Schedule RK-1 fromanother entity in which it is a share-holder or partner (owner), this PA-20S/PA-65 Schedule RK-1 already hasthe classified income (loss) amount forcompleting PA-20S/PA-65 InformationReturn.

On Line 1b, enter the business income(loss) received as an owner from allother entities reported on the PA-20S/PA-65 Schedules RK-1, Line 1.

Total Income (Loss)Add Line 1a and Line 1b. Includelosses when determining Line 1c. IfLine 1c is a negative, fill in the “loss”oval.

Previously Disallowed CorporateNet Income (CNI) DeductionsPA S Corporations OnlyEnter the total amount of previouslydisallowed corporate net income de-ductions on this line.

The department allows any deductionthat it disallowed when the corporationwas subject to Pennsylvania corporatenet income tax as an additional deduc-tion while the corporation is in a PA Scorporation status, except a net losscarry forward deduction.

Pennsylvania limits the additional de-duction to the same extent and in thesame manner that the additional de-duction would have been allowed hadthe corporation remained subject toPennsylvania corporate net incometax.

Any previously disallowed Pennsylva-nia corporate net income deductionshall be separately determined andmust be taken against net profits froma business, profession or farm. Resi-dent shareholders are allowed the fullamount of any previously disallowedPennsylvania corporate net income de-duction.

Nonresident shareholders are allowedonly a previously disallowed Pennsyl-vania corporate net income deductionto the extent that the deduction wouldhave been considered a deductionagainst income from sources withinPennsylvania in the year disallowed.

Submit a separate statement for eachdeduction indicating the basis for eachclaimed deduction and the year inwhich the deduction was disallowed.Use the earliest previously disallowedPennsylvania corporate net income de-duction first.

Disallowed Accelerated Depreciation on Tax Preference ItemsPennsylvania allows accelerated de-preciation of tax preference items thatwere disallowed when the corporationwas subject to Pennsylvania corporatenet income tax as an additional deduc-tion, to the extent and amount allowedhad the corporation remained subjectto Pennsylvania corporate net incometax. For further information, refer to thedepartment’s regulations in 61 Pa.Code §153.14.

Total Adjusted BusinessIncome (Loss)Subtract Line 1d from Line 1c. Includelosses when determining Line 1e. If anegative amount, fill in the “loss” oval.

Apportioned/Allocated PA-TaxableBusiness Income (Loss)In Part II, an entity that has businessoperations within and outside Pennsyl-vania must allocate or apportion its in-come (loss), costs, expenses andliabilities if it has an owner that is: ● A nonresident individual; ● A resident or nonresident estate or

trust; ● A PA S corporation; or ● A partnership

NOTE: If the entity’s opera-tions are entirely within

Pennsylvania, the amounts in PartI will be the same as the amountsin Part II, PA Source Column. Part

II, Outside PA Column, will have allzero amounts.

When an entity operates a busi-ness that is neither wholly withinnor wholly outside Pennsylvaniaand is required to allocate or ap-portion its income (loss), it allo-cates by separate accounting ifboth of the following conditions aremet:

● The business operations withinPennsylvania and the business op-erations outside Pennsylvaniaconstitute independent profit centers. This means there are notransfers of finished or partly fin-ished goods, raw materials, sup-plies, services, or operationalassets interspersed; each center isfree to buy outside; and becauseof geographical location, no centeris in direct competition with an-other; and

● The entity retains its books so thatthe amounts of revenues, costs,and expenses attributable to Penn-sylvania operations can be prop-erly disclosed.

For more information on the appor-tionment and allocation of incomefrom a business carried on partlywithin and partly outside Pennsyl-vania, refer to 61 Pa. Code §109.5.

If the entity must apportion income,submit a completed PA-20S/PA-65Schedule H, Apportioning Incomefrom a Business, Profession orFarm derived from sources bothwithin and outside Pennsylvania.Please review the PA-20S/PA-65Schedule H instructions on the de-partment’s website.

NOTE: For reporting income(loss) from another entity on

Lines 1b, 2b and 2f, the Pennsyl-vania entity needs both a PA-20S/PA-65 Schedule RK-1 andNRK-1 so it can pass throughPennsylvania-source amounts andamounts from sources outsidePennsylvania to its owners.

If the other entity is not a PA S cor-poration, partnership or entityformed as a limited liability com-pany that is classified as a partner-ship or S corporation for federal

LINE 1e

PAGE 1 - PART II

LINE 1d

LINE 1c


income tax purposes, a supplementalstatement must be provided by theother entity that shows Pennsylva-nia-source amounts in the sameclass in which the other entity re-ceived the income.

Net Business Income (Loss)Outside PA ColumnSubtract Line 2e in Part II from Line 1ain Part I. Enter the difference. If a neg-ative amount, fill in the “loss” oval.

Share of Business Income (Loss)from Other EntitiesOutside PA ColumnSubtract Line 2f in Part II from Line 1bin Part I. Enter the difference. If a neg-ative amount, fill in the “loss” oval.

If the entity completing the PA-20S/PA-65 Information Return received aPA-20S/PA-65 Schedule RK-1 and/orNRK-1 from another entity in which it isan owner, it already has the classifiedincome (loss) amount for completingthe PA-20S/PA-65 Information Return.

If the entity completing this PA-20S/PA-65 Information Return received afederal Schedule K-1 from another en-tity, in which it is an owner, it should re-quest a PA-20S/PA-65 Schedule RK-1and/or NRK-1 from the entity becausethe federal Schedule K-1 does notclassify income for Pennsylvania per-sonal income tax purposes.

Previously Disallowed PA-SourceCorporate Net Income DeductionsOutside PA ColumnPA S Corporations OnlySubtract Line 2g in Part II from Line 1din Part I. Enter the difference.

Calculate Adjusted/ApportionedNet Business Income (Loss)Outside PA ColumnAdd Line 2a and Line 2b and then sub-tract Line 2c. Enter the difference. In-clude losses when determining Line

2d. If a negative amount, fill in the“loss” oval.

Net Business Income (Loss)PA-Source ColumnIf the entity has operations inside andoutside of Pennsylvania, enter the ap-portioned income (loss) from PA-20S/PA-65 Schedule H, Line 7. If the entityonly has operations inside Pennsylva-nia, enter the allocated income (loss)from its PA-20S/PA-65 Schedule M,Part B, Section G, Line 1. If a negativeamount, fill in the “loss” oval.

Share of Business Income (Loss)from Other EntitiesPA-Source ColumnEnter the sum of Line 1 of all the PA-20S/PA-65 Schedules NRK-1 received.If a negative amount, fill in the “loss”oval.

If the entity completing the PA-20S/PA-65 Information Return received aPA-20S/PA-65 Schedule NRK-1 fromanother entity in which it is an owner,this PA-20S/PA-65 Schedule NRK-1 al-ready has the classified income (loss)amount for completing PA-20S/PA-65Information Return.

If the entity completing the PA-20S/PA-65 Information Return received afederal Schedule K-1 from another en-tity in which it is an owner, it should re-quest a PA-20S/PA-65 Schedule RK-1and/or NRK-1 from the entity becausethe federal Schedule K-1 does notclassify income for Pennsylvania per-sonal income tax purposes.

Previously Disallowed PA-SourceCorporate Net Income Deductions PA-Source ColumnPA S Corporations OnlyMultiply Line 1d by the applicable ap-portionment figure(s) from the RCT-101, PA Corporate Tax Report, for theyear(s) in which the deduction was dis-allowed.

The corporation’s corporate net in-come apportionment decimal for theyear in which the deduction was disal-lowed may be used. Enter the result.

Calculate Adjusted/ApportionedNet Business Income (Loss)PA-Source ColumnAdd Line 2e and Line 2f and then sub-tract Line 2g. Include losses when de-termining Line 2h. If a negativeamount, fill in the “loss” oval.

Allocated Other PA PIT Income(Loss)In Part III, the entity must allocate allother income (loss) to Pennsylvaniasource and outside Pennsylvania. If allowners are full-year nonresident indi-viduals, zero amounts must be shownin Part III on Lines 3 and 4.

Interest Income from PA Schedule APA-SourceEnter the amount from PA-20S/PA-65Schedule A, Line 8. This is the totalamount of interest income earned bythe entity.

The entity must report on Line 3 anyamount it received for the use of itsmoney that it does not include in an-other income class. Do not report onLine 3 interest from obligations that arestatutorily free from Pennsylvania tax.

Include in Line 1a, not Line 3, in-terest from assets to generate

working capital and interest used in op-erating commercial activities (generallyfrom current assets) when determiningnet profit (loss).

Dividend Income from PA Schedule BPA-SourceEnter the amount from PA-20S/PA-65Schedule B, Line 9.

Dividend income is any distribution tothe entity of cash or property from the

LINE 2c

LINE 2d

LINE 2e

LINE 2f

LINE 2g

LINE 2h

LINE 2b

LINE 2a

PAGE 1 - PART III

LINE 3

LINE 4


accumulated earnings and profits orcurrent earnings and profits of a corpo-ration, association, or business trust.

Include in Line 1a, not Line 4,dividend income from assets to

generate working capital and dividendincome that the entity used in operat-ing its commercial activities (generallycurrent assets) when determining itsnet profit (loss).

Net Gain (Loss) from PA Schedule DPA-Source ColumnA PA-20S/PA-65 Schedule D must becompleted for any net gain (loss) in-come.

These figures represent net gains ornet income, less net losses, derivedfrom the sale, exchange or dispositionof property including real or personal,whether tangible or intangible, as determined in accepted accountingprinciples and practices per 72 P.S.§7303(a)(3).

Net Gain (Loss) from PA Schedule DOutside PA ColumnIf the entity disposed of property lo-cated outside Pennsylvania, completePA-20S/PA-65 Schedule D-III andSchedule D-IV. Enter the amount fromPA-20S/PA-65 Schedule D-III, Line 16.If a negative amount, fill in the “loss”oval.

Net Gain (Loss) from PA Schedule DPA-Source ColumnIf the entity disposed of property lo-cated inside Pennsylvania from infor-mation on its books and recordscomplete PA-20S/PA-65 Schedule D-Iand Schedule D-II. Enter the amountfrom PA-20S/PA-65 Schedule D-I, Line16. If a negative amount, fill in the“loss” oval.

IMPORTANT: Include the sales,exchanges or dispositions of in-

ventories and/or stock-in-trade in de-termining net business income (loss).

Rent/Royalty Net Income (Loss) from PA Schedule M, Part BNet RentNet rents and royalties from real and tan-gible personal property located in Penn-sylvania are allocable to Pennsylvania.

Net RoyaltiesPatent, copyright and other intangibleroyalties are allocable to Pennsylvaniato the extent that the payer of such in-come uses the patent or copyright inPennsylvania.

A business uses a patent in Pennsyl-vania to the extent that it employs thepatent in the production, fabrication,manufacturing, or other processing inPennsylvania, or to the extent that itproduces a patented product in Penn-sylvania.

A business uses a copyright in Penn-sylvania to the extent that it prints orotherwise publishes in Pennsylvania.

Rent/Royalty Net Income (Loss)from PA Schedule M, Part BOutside PA ColumnComplete and submit a PA-20S/PA-65Schedule E. The PA-20S/PA-65Schedule E should reflect what is re-ported on federal Form 8825, RentalReal Estate Income and Expenses ofa Partnership or S Corporation.

Complete PA-20S/PA-65 Schedule M,Part B to reflect your Pennsylvania ad-justments. From PA-20S/PA-65 Sched-ule M, Part B, Section G, enter thedifference of Line 2 minus Line 1. If anegative amount, fill in the “loss” oval.

Rent/Royalty Net Income (Loss)from PA Schedule M, Part BPA-Source ColumnComplete and submit a PA-20S/PA-65Schedule E. PA-20S/PA-65 ScheduleE should reflect what is reported onfederal Form 8825, Rental Real EstateIncome and Expenses of a Partnershipor S Corporation.

Complete PA-20S/PA-65 Schedule M,Part B to reflect your Pennsylvania adjustments. Enter the amount fromPA-20S/PA-65 Schedule M, Part B,Section G, Line 1. If a negativeamount, fill in the “loss” oval.

Estates or Trusts from PA Schedule JOutside PA ColumnComplete and submit the PA-20S/PA-65 Schedule J. If the entity is a benefi-ciary of an estate or trust, enter thetotal figure from the PA-20S/PA-65Schedule J, Column (d) minus the totalfigure from PA-20S/PA-65 Schedule J,Column (c).

Estates or Trusts fromPA-20S/PA-65 Schedule JPA-Source ColumnComplete and submit PA-20S/PA-65Schedule J. If the entity is a beneficiaryof an estate or trust, enter the total fig-ure from the PA-20S/PA-65 ScheduleJ, Column (c).

Gambling and Lottery Winnings (Loss) from PA Schedule TComplete and submit PA-20S/PA-65Schedule T. The entity must enter anywinnings it realizes from gambling orlotteries including cash prizes from thePennsylvania Lottery. It may notdeduct any expenses related to realiz-ing such income. However, it can offsetwinnings and losses within this incomeclass. Submit with Schedule T a de-tailed statement/explanation of anyamount reported, including informationsuch as the source of winnings, spe-cific amounts, etc.

Gambling and Lottery Winnings (Loss) from PA Schedule T Outside PA ColumnEnter the total figure from the PA-20S/PA-65 Schedule T, Column (b) Line 5

LINE 5b

LINE 6

LINE 6a

LINE 6b

LINE 5a

LINE 5

LINE 7a

LINE 7b

LINE 8

LINE 8a


minus the total figure from PA-20S/PA-65 Schedule T, Column (a) Line 5. If anegative amount, fill in the “loss” oval.

Gambling and Lottery Winnings (Loss) from PA-20S/PA-65Schedule TPA-Source ColumnEnter the total figure from the PA-20S/PA-65 Schedule T, Column (a) Line 5.If a negative amount, fill in the “loss”oval.

Total Other PA PIT Income (Loss)PA-Source ColumnIf all owners are full-year residents, acombination of Pennsylvania resi-dentsand nonresidents; or a part-yearresident, then Line 9 equals the sum ofLines 3, 4, 5a, 5b, 6a, 6b, 7a, 7b, 8aand 8b. Include losses.

If all owners are full-year nonresidentindividuals, then Line 9 equals the sumof Lines 5b, 6b, 7b and 8b. Includelosses. If a negative amount, fill in the“loss” oval.

When determining income (loss)distributable to their owners for

each class of income, the entity doesnot use Line 9 because the income(loss) is reflected in Line 9.

The figure on Line 9 is a sum of totalother income used in calculating accu-mulated adjustments account and thetotal in Part IV.

SummaryBelow are cross references for residentand nonresident partners and share-holders (owners) for Parts I, II, III fromthe PA-20S/PA-65 Information Returnand the line entries on the PA-20S/PA-65 Schedule(s) RK-1 or NRK-1.

Resident Partners and Shareholders (Owners)Business IncomePA-20S/PA-65 Schedule RK-1Part I, Line 1e RK-1, Line 1

Interest IncomePA-20S/PA-65 Schedule RK-1Part III, Line 3 RK-1, Line 2

Dividend IncomePA-20S/PA-65 Schedule RK-1Part III, Line 4 RK-1, Line 3

Net Gain (Loss) - Schedule DPA-20S/PA-65 Schedule RK-1Part III, Line 5a+5b RK-1, Line 4

Rent, Royalty, Net IncomePA-20S/PA-65 Schedule RK-1Part III, Line 6a+6b RK-1, Line 5

Estates or Trust IncomePA-20S/PA-65 Schedule RK-1Part III, Line 7a+7b RK-1, Line6Gambling and Lottery Winnings

PA-20S/PA-65 Schedule RK-1Part III, Line 8a+8b RK-1, Line 7

Nonresident Partners andShareholders (Owners)

Business IncomePA-20S/PA-65 Schedule NRK-1Part II, Line 2h NRK-1, Line 1

Net Gain (Loss) - Schedule DPA-20S/PA-65 Schedule NRK-1Part III, Line 5b NRK-1, Line 2

Rent, Royalty, Net Income (Loss)PA-20S/PA-65 Schedule NRK-1Part III, Line 6b NRK-1, Line 3

Estates or Trust IncomePA-20S/PA-65 Schedule NRK-1Part III, Line 7b NRK-1, Line 4

Gambling and Lottery WinningsPA-20S/PA-65 Schedule NRK-1Part III, Line 8b NRK-1, Line 5

Total PA S Corporation orPartnership Income (Loss)In Part IV, the entity calculates the dif-ference between its book income (loss)and the income (loss) it reports on thePA-20S/PA-65 Information Return. Theamounts reported to Pennsylvania dif-fer from the federal reportable income(loss).

Total Income (Loss) per Booksand RecordsThe entity uses book income to arriveat this figure. This figure (book income)would not take into account any federalor Pennsylvania tax adjustments. This

figure is not Pennsylvania income afteradjustments.

Enter the total entity income (loss) fromits underlying Pennsylvania books andrecords for the taxable year. If a nega-tive amount, fill in the “loss” oval.

Interest and gains that the entity de-rives from government obligations, ex-empt from Pennsylvania personalincome tax, do not pass through to itsowners as taxable.

Conversely, the entity cannot uselosses on Pennsylvania personal in-come tax-exempt obligations to offsettaxable income.

In addition, the entity must includesuch income (loss) on Line 10 as thePennsylvania-exempt income (loss) af-fects each owner’s basis. Accordingly,the entity passes through to eachowner its pro rata share of the Penn-sylvania-exempt income (loss).

Total Reportable Income (Loss)If the entity has only full-year residentindividual owners or both full-year res-ident and nonresident individual own-ers, add Line 1e and Line 9. If anegative amount, fill in the “loss” oval.

If entity has only full-year nonresidentindividual owners, add Line 2h andLine 9. If a negative amount, fill in the“loss” oval.

Total Nontaxable/Non Reportable Income (Loss)This amount represents the differencebetween book income and Pennsylva-nia-reportable income (loss). SubtractLine 11 from Line 10 (include losses).If a negative amount, fill in the “loss”oval.

Pass Through CreditsIn Part V, the entity is required toidentify pass through credits that it re-ports on the PA-20S/PA-65 Informa-tion Return.

PAGE 2 - PART IV

LINE 10

LINE 9

LINE 8b

LINE 11

LINE 12

PAGE 2 - PART V


Total Other Credits. SubmitPA 20S/PA-65 Schedule OCEnter amount from Schedule OC, Line17. The entity is required to submit thePA-20S/PA-65 Schedule OC detailingall credits.

Resident CreditThis figure is based on composite re-turns filed in other states on behalf ofthe individual owners. It is an individualtax credit that is passed through toowners. Submit a copy of the out-of-state returns for all resident creditsclaimed.

Certain PA S corporations are nottaxed as S corporations in other states.Report taxes paid in those other states on PA-20S/PA-65 Schedule OC,Line 5.

The resident credit for taxes paid toother states or countries is now onlyavailable as a credit for taxes paid to astate of the U.S., the District of Colum-bia, the Commonwealth of Puerto Ricoor any territory or possession of theU.S. The credit for taxes paid to foreigncountries is no longer permitted as acredit against a Pennsylvania PersonalIncome Tax liability.

Pennsylvania 2016 Quarterly Tax Withholding Payments/Extension Payment for Nonresident OwnersEnter the amount from PA-20S/PA-65Schedule NW, Line B. The amount onLine 14a will include an extension pay-ment (if one was made) as listed andreported on PA-20S/PA-65 ScheduleNW, Line B.

Final Payment of NonresidentWithholding TaxEnter the amount from PA-20S/PA-65Schedule NW, Line D. See How ToPay.

Total Pennsylvania Income TaxWithheldAdd Line 14a and Line 14b. Enter thetotal here.

International ACH TransactionsThe Federal Office of Foreign AssetsControl has imposed additional reportingrequirements on all electronic bankingtransactions that directly involve a finan-cial institution outside of the territorial ju-risdiction of the U.S. These transactionsare called international ACH transac-tions (IAT). Presently, the PennsylvaniaDepartment of Revenue does not sup-port IAT debit transactions. Taxpayerswho instruct the department to processelectronic banking transactions on theirbehalf are certifying that the transactionsdo not directly involve a financial institu-tion outside of the territorial jurisdictionof the U.S. at any point in the process.

Distributions for PartnershipsOn Lines 15 through 18, list all distri-butions and guaranteed paymentsmade to partners during the taxableyear.

Distributions of Cash, Marketable Securities, and Property (Do not include guaranteed payments.)Distributions that the partnershipmakes that represent cash, marketablesecurities, and other property that arenot guaranteed payments may repre-sent Pennsylvania-taxable income tothe extent the distributions exceed theresident partner’s outside basis.

Non-liquidating Distributions fromPartnership to PartnerWith respect to non-liquidating distribu-tions from a partnership to a residentpartner, the partner’s adjusted basis inits partnership interest is decreased tothe extent of the partnership’s Pennsyl-vania personal income tax adjustedbasis in the property distributed to thepartner.

In non-liquidating distributions, a resi-dent partner will recognize taxable in-come to the extent that the partnership’s

adjusted basis in the property distrib-uted exceeds the resident partner’s ad-justed basis in its partnership interest.Although not taxable to a nonresidentpartner, the nonresident partner re-duces his or her economic investmentby the partnership’s adjusted basis inthe property distributed.

Liquidating Distributions fromPartnership to PartnerWith respect to liquidating distributionsfrom a partnership to a resident part-ner, the partner’s adjusted basis in itspartnership interest is decreased to theextent of the fair market value of theproperty distributed to the partner.

In liquidating distributions, a residentpartner will recognize taxable gain onPA-40 Schedule D to the extent thatthe fair market value of the propertydistributed exceeds the resident part-ner’s adjusted basis in its partnershipinterest.

Guaranteed Payments for Capital or Other ServicesEnter the total guaranteed paymentsfor capital or other services made tothe partners.

Pennsylvania personal income tax lawcharacterizes such distributions as: ● A withdrawal proportionately from

the capital of all partners; ● A gain from the disposition of the

recipient’s partnership interest anda loss from the disposition of theother partners’ partnership inter-ests, to the extent derived from thecapital of the other partners; and

● A return of capital by the residentrecipients to the extent derivedfrom their own capital. The distri-butions that the partnership makesthat represent repayments of thepartner’s own capital are not in-come for Pennsylvania personalincome tax purposes.

IMPORTANT: Pennsylvaniapersonal income tax law does

not allow a deduction for guaran-teed payments for capital or if serv-ices have not been rendered.

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All Other Guaranteed Payments forServices RenderedEnter the total guaranteed payments topartners to the extent that the partner-ship makes guaranteed payments forservices rendered directly in the pro-duction of income for a Pennsylvaniaincome class.The partnership characterizes guaran-teed payments to partners in the fol-lowing manner: ● To the extent paid for services ren-

dered directly in the production of in-come from a business, profession,or farm, the guaranteed paymentsare gross income from that incomeclass; and

● To the extent paid for services ren-dered directly in the production ofrental or royalty income, the guar-anteed payments are gross in-come from that income class.

If guaranteed paymentshave been deducted in cal-

culating business income, includethese payments on Line 17.

Guaranteed Payments to Retired PartnersGuaranteed payments to retired part-ners are not taxable if the exception asstated in IRC §1402(a) (10) is met.Only nontaxable amounts should bereported on Line 18. For further detail,refer to the Pennsylvania Personal In-come Tax Guide, Chapter 16.

IMPORTANT: Pennsylvaniadoes not allow a deduction for

guaranteed payments for the use ofcapital, or if services have not beenrendered. Each recipient partner re-ports its classified income (loss) ineach class by adding its guaranteedpayments to the amounts in their PA-20S/PA-65 Schedule(s) RK-1 and/orNRK-1, Part IV.

Distributions from PA Accumulated Adjustments AccountGenerally, distributions from the Penn-sylvania accumulated adjustments

account (AAA) are not taxable to theextent of the resident shareholder’sbasis. The resident shareholder willrecognize taxable income to the extentthat the Pennsylvania AAA distributionexceeds the shareholder’s basis in itsstock.

Distributions for PA S CorporationsOn Lines 19 and 20, list all distributionsmade to shareholders during the tax-able year.

A distribution that a PA S corporationmakes from its Pennsylvania accumu-lated earnings and profits before be-coming a PA S corporation is dividendincome to its resident shareholders.Other distributions can represent anon-taxable return of the residentshareholders’ stock basis.

Nontaxable return of basis distributionwill reduce each resident shareholder’sbasis in the stock first. If the non-tax-able return of distribution exceeds theshareholder’s basis in its stock hold-ings, the shareholder can apply the ex-cess against the basis of anyindebtedness of the PA S corporationto that shareholder. If the distributionexceeds the shareholder’s basis in thestock and the PA S corporation’s in-debtedness, the resident shareholdermust report a gain from the dispositionof property.

If the PA S corporation distributes ap-preciated property, it must treat the dis-tribution as if it sold the property to theshareholders at fair market value. Sucha distribution will produce a gain fromthe sale of property that the PA S cor-poration will have to report as net gain(loss) from the sale, exchange or dis-position of property.

Although not taxable to a nonresidentshareholder, the nonresident share-holder reduces its economic invest-ment by the fair market value of theproperty distributed.

A nonresident cannot deduct losses inexcess of its economic investment inthe PA S corporation.

IMPORTANT: When distribu-tions are determined from all in-

come sources and the shareholdersare only full-year nonresident individualowners, the Pennsylvania AAA distri-

bution should be factored by the PA-20S/PA-65 Schedule H percentage toprevent premature depletion of thePennsylvania AAA balance, which maytrigger a possible tax event.

Distributions of Cash, Marketable Securities, and PropertyDistributions by the PA S corporationfrom its C corporation earnings andprofits are Pennsylvania-taxable divi-dends. Include such Pennsylvania-tax-able dividends on each shareholder’sPA-20S/PA-65 Schedule RK-1, Line 3.

Distributions of cash, marketable secu-rities and property (other than divi-dends) in excess of the shareholder’sPennsylvania AAA are considered atax-free return of investment to the ex-tent of the resident shareholder’s basisin its stock. The resident shareholderwill recognize taxable income to theextent that the fair market value ofsuch distribution exceeds the residentshareholder’s basis in its stock.

Although not taxable to a nonresidentshareholder, the nonresident share-holder reduces its economic invest-ment by the fair market value of theproperty distributed.

Other InformationThis section asks a series of questionssimilar to federal Schedule B. Thequestions should be answered with a“Yes” or “No.” If the entity answered“Yes”, supplemental statements mustbe submitted.

The entity must answer “Yes” to Ques-tion 1 if during the tax year: ● It owned an interest in another

partnership, foreign (located out-side the U.S.) or domestic; or

● It was the tax owner of a foreignentity, located outside the U.S. thatwas disregarded as an entity sep-arate from its owner under federalTreasury Regulations §301.7701-2 and 301.7701-3. The tax ownerof a foreign entity located outside

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the U.S. that was disregarded as anentity is treated as owning the as-sets and liabilities of the foreigndisregarded entity located outsidethe U.S. for purposes of U.S. in-come tax law.

The statement must show eachentity’s name, federal employeridentification number (if any), andthe country under whose laws theentity was organized if the entity di-rectly or indirectly owned at least a10 percent interest in any other for-eign (located outside the U.S.) ordomestic partnership.

The entity must answer “Yes” if thereare any tax-exempt partners/members/shareholders and select tax-exempt asthe owner type on the PA-20S/PA-65Schedule RK-1 and/or NRK-1.

The entity must answer “Yes” and sub-mit a statement indicating entity andforeign location if the partnership, Scorporation or limited liability companyclassified as a partnership or PA S cor-poration had any owners located out-side the U.S. at any time during the taxyear.

The entity must answer “Yes” if therewas a distribution of property or atransfer (e.g., by sale or death) of apartner/member interest during the taxyear (partnership only). If the entity an-swered yes, submit a statement indi-cating the disposing partner, theacquiring partner and the amount paidfor the interest.

The entity must answer “Yes” if the fed-eral government changed taxable in-come as originally reported for anyprior tax year for which amended re-turns have not been filed in Pennsylva-nia. If the entity answered “Yes”,submit a statement indicating tax yearand include a copy of the RevenueAgent’s Report.

If required, the entity must file anamended return within 30 days of theadjustment.

The entity must answer “Yes” if either1 or 2 of the following apply to the part-nership:1. At any time during the tax year, the

entity had signature or other au-thority over a bank account, secu-rities account, or other financialaccount in a foreign country (out-side the U.S.); and

● The combined value of the ac-counts was more than $10,000at any time during the calendaryear; and

● The accounts were not with aU.S. financial institution.

2. The entity owns more than 50 percent of any partnership or 50percent of the stock in any corpo-ration that would answer the ques-tion “Yes” based on item 1 above.

If the entity answered yes: ● Submit a statement with the

name of the foreign country/countries; and

● Submit a copy of federal Fin-CEN Form 114 that was filedwith the Department of theTreasury.

The entity must answer “Yes” if it is in-volved in a reportable transaction,listed transaction, or registered taxshelter within this return.

Federal Form 8886, Reportable Trans-action Disclosure Statement, must besubmitted with any return on which adeduction, loss, credit or any other taxbenefit is claimed or is reported; or anyincome the partnership reported froman interest in a registration-required taxshelter. If the partnership is required tofile this form with the federal return,submit a copy with the partnership’sPA-20S/PA-65 Information Return.

A reportable transaction is any trans-action as defined in Treasury Regula-tion 1.6011-4 and includes, but is notlimited to:

● A confidential transaction, which isoffered to an entity under condi-tions of confidentiality and forwhich the entity has paid a mini-mum fee;

● A transaction with contractual pro-tections, which provides the entitywith the right to a full or partial re-fund of fees if all or part of the in-tended tax consequences from thetransaction are not sustained;

● A loss transaction under IRC §165,which is at least $10 million in anyone year or $20 million in any com-bination of tax years;

● A transaction with a significantbook-tax difference; and

● A transaction where the entity isclaiming a tax credit of greater than$250,000 and held the asset forless than 45 days.

A listed transaction is a specific re-portable transaction, or one that issubstantially similar, which hasbeen identified by the IRS to be atax avoidance transaction.

A registered tax shelter is any in-vestment that must be registeredwith the Internal Revenue Serviceunder IRC §6111.

The entity must answer “Yes” if the en-tity filing as a partnership has otherpartnerships as partners.

The entity must answer “Yes” if taxcredits were sold.

If the entity answered “Yes”, submit astatement identifying the buyer, the So-cial Security number or federal em-ployer identification number, the typeand amount of credit sold and the salesprice.

The entity must answer “Yes” if itchanged its method of accounting forfederal income tax purposes duringthis tax year.

Pennsylvania does not allow the four-year spread of the effect in accounting

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method change under IRC §481. Theeffect of the change must be recog-nized entirely in the year of the change.

The entity must answer “Yes” if it en-tered into any like-kind exchangesunder IRC §1031 for the current taxyear.

If the entity answered “Yes”, submitfederal Form 8824.

If Section 179 properties are involvedsubmit the information provided to theowners on their federal Schedules K-1.

Enter the Pennsylvania-apportionmentdecimal from PA-20S/PA-65 ScheduleH-Corp used for calculating CNI tax. Ifusing special apportionment, enter thatdecimal here.

Accumulated Adjustments Account and Accumulated Earnings and ProfitsPA S Corporations OnlyThe Pennsylvania accumulated adjust-ments account (AAA) should not equalthe federal AAA, because Pennsylva-nia AAA is based on Pennsylvania taxprinciples; however, Pennsylvania par-allels certain federal calculation rulesin arriving at Pennsylvania AAA, suchas the following: ● The Pennsylvania AAA is based

upon the Pennsylvania personalincome tax income (loss) and dis-tributions.

● The PA S corporation’s AAA re-flects only the income (loss) anddistribution from the inception ofthe election of PA S corporationstatus.

● The PA S corporation does notmake an adjustment for any in-come (loss) that is not enumeratedin Pennsylvania personal incometax law or any non-deductiblePennsylvania personal income taxexpense.

Example. For Pennsylvania personalincome tax purposes, tax-exempt in-

come is not added to income subject toPennsylvania personal income tax.

IMPORTANT: The AE&P columnis for former C corporations only.

If an entity has been an S corporationfrom inception, this column will alwaysbe zero.

Balance at the Beginning of the Taxable YearFor the corporation’s first tax year as aPA S corporation, enter zero. In subse-quent years, enter the ending balancefrom the prior year’s account. If a neg-ative amount, fill in the “loss” oval.

NOTE: If an S corporation hadno prior earnings in Pennsylva-

nia, the beginning AAA would be zero.

Total Reportable Income fromPart IV, Line 11Enter the total Pennsylvania-reportableincome from the PA-20S/PA-65 Infor-mation Return, Part IV, Line 11.

Do not enter a loss from Part IV, Line11 on this line.

Other Additions - Submit anItemized StatementEnter other additions to the Pennsylva-nia AAA. Do not enter non-taxable in-come. Submit an itemized statement ofthe additions reported on this line.

Example. If an S corporation acquiredanother S corporation, the AAA in theacquired S corporation would be in-cluded in this line. The itemized state-ment must include the name(s) of theS corporation purchased and federalemployer identification number(s).

Loss from Part IV, Line 11Enter the loss from Part IV, Line 11 ofthe PA-20S/PA-65 Information Return.

Other Reductions - Submit an Itemized StatementEnter other reductions to the Pennsyl-vania AAA. Do not enter Pennsylvanianon-deductible expenses associatedwith non-taxable income. Submit anitemized statement of the reductionsreported on this line.

Example. If an S corporation acquiredanother S corporation, the negativeAAA in the acquired S corporationwould be included in this line. Theitemized statement must include thename(s) of the S corporation pur-chased and federal employer identifi-cation number(s).

Sum of Lines 1 through 5Enter the sum of Line 1 through Line 5.If a negative amount, fill in the “loss”oval.

DistributionsEnter all distributions other than divi-dend distributions. Dividend distribu-tions are not part of the PennsylvaniaAAA.

IMPORTANT: When distribu-tions are determined from all in-

come sources and the shareholdersare only full-year nonresident individualowners, the Pennsylvania AAA distri-bution should be factored by the PA-20S/PA-65 Schedule H percentage toprevent premature depletion of thePennsylvania AAA balance, which maytrigger a possible tax event.

Balance at Taxable Year-EndSubtract Line 7 from Line 6. Enter thetotal. If a negative amount, fill in the“loss” oval.

If a PA S corporation reverts to being acorporation subject to corporate net in-come tax, it may distribute the balanceof its Pennsylvania AAA to sharehold-ers as a non-taxable return of capital tothe extent of basis. Such distributions,

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PAGE 3 - PART VIII

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however, will reduce the shareholder’sbasis in the C corporation.

If the distributions exceed the residentshareholder’s basis in the stock of theformer PA S corporation, the share-holders must report the distributions astaxable gains on the sale, exchange ordisposition of property to the extent ofPennsylvania AAA.

Ownership in Pass Through EntitiesIf the entity received income (loss)from an S corporation, partnership, es-tate or trust, limited liability companyor any other pass through entity includ-ing a qualified subchapter S subsidiary(QSSS), list the federal employer iden-tification number and name and address of each entity.

If the income (loss) is from a qualifiedsubchapter S subsidiary, enter “yes” inthe qualified subchapter S subsidiarybox.

The entity filing the PA-20S/PA-65 In-formation Return would list in Part IXall entities in which it is a shareholder,member, partner or beneficiary.

An S corporation can be a member,partner or beneficiary in a limited liabil-ity company, partnership, estate ortrust, respectively. An S corporationcannot own another S corporation un-less the other corporation is a qualifiedsubchapter S subsidiary.

A partnership can be a member, part-ner or beneficiary in a limited liabilitycompany, partnership, estate or trust,respectively. A partnership cannot be ashareholder in an S corporation.

The entities listed in Part IX provide aSchedule RK-1 and NRK-1 to the entityfiling the PA-20S/PA-65 InformationReturn. However, a qualified subchap-ter S subsidiary does not issue a PASchedule K-1.

The entity must report the income fromPA Schedules RK-1 and NRK-1 in thesame class of income on the PA-20S/PA-65 Information Return.

The entity reports pass through busi-ness income from PA Schedules RK-1

and NRK-1 on the PA-20S/PA-65 Infor-mation Return, Parts I and II.

Income from PA-20S/PA-65 ScheduleRK-1 less the amount reported on PA-20S/PA-65 Schedule NRK-1 is re-ported in the Outside PA column andincome from PA-20S/PA-65 ScheduleNRK-1 is reported in the PA Sourcecolumn on the PA-20S/PA-65 Informa-tion Return.

NOTE: If additional space isneeded, submit on a separate

statement. Do not submit additionalcopies of Page 3 from the PA-20S/PA-65 Information Return.

Paper-Filed ReturnsGeneral Partner, Principal Officeror Authorized Individual Signatureand NameThe PA-20S/PA-65 Information Returnmust be signed and dated.

The entity has not filed a valid PA-20S/PA-65 Information Return unless it isproperly signed. The individual signingthe return must be a general partner,principal officer or individual expresslyauthorized to sign.

The PA S corporation or partnership of-ficial signing the return verifies by writ-ten declaration, under penalties ofperjury, that he or she personally hasexamined the PA-20S/PA-65 Informa-tion Return and its accompanyingschedules and to the best of his or herknowledge, PA-20S/PA-65 InformationReturn is true, correct and complete.

The PA S corporation or partnership of-ficial that is responsible for signing thePA-20S/PA-65 Information Returnmust sign it by hand; signature stampsor labels are not acceptable, and in-clude his or her title, date and daytimephone number.

The responsible official must submit allrequired schedules with the PA-20S/PA-65 Information Return, includingthe PA-20S/PA-65 Schedules RK-1and NRK-1 for each owner, andSchedule H-Corp for each corporateowner.

Preparer’s Signature and NameA paid preparer may sign original oramended returns by rubber stamp, me-chanical device, or computer softwareprogram. Pennsylvania follows federalguidelines for signature requirementsfor the preparer.

If a partner, shareholder or employeeof the entity completes the PA-20S/PA-65 Information Return, the paid pre-parer’s space should remain blank. Inaddition anyone who prepares the PA-20S/PA-65 Information Return butdoes not charge the entity should notcomplete the paid preparer section.

Anyone who prepares a PA-20S/PA-65Information Return for a fee or incidentto the performance of services forwhich the preparer charges a fee, e.g.,an attorney provides legal services fora fee and includes for free, the prepa-ration of the PA-20S/PA-65 InformationReturn, must complete the requiredpaid preparer information listed below: ● Print or type the paid preparer’s

name in the space provided. ● Sign the return in the space pro-

vided for the paid preparer’s signa-ture.

● Fill in the other areas in the “PaidPreparer Use Only” section.

● Print or type the paid preparer’scompany or corporation name andfederal employer identificationnumber, if applicable.

● Print or type the paid preparer’sPreparer Tax Identification Number(PTIN). If you are a paid preparer,you must use a PTIN issued by theInternal Revenue Service (IRS) toidentify yourself in the paid pre-parer section of the tax return.

● Give a copy of the return to the tax-payer.

If someone prepares the return atno charge, the paid preparer’sarea need not be completed.

Electronically Filed ReturnsAn electronic return must be signed bya general partner, principal officer orauthorized individual.

An electronic return must also be signedby the paid preparer, if applicable.

PAGE 3 - PART X

WHO MUST SIGN

PAGE 3 - PART IX


Two signature options are available:1. PA-8879-P, Pennsylvania e-File Signature Authorization for PA S Corporation/Partnership Informa- tion Return (PA-20S/PA-65) – Di- rectory of Corporate Partners (PA- 65 Corp); or2. PA-8453-P, PA S Corporation/

Partnership Information Return(PA-20S/ PA-65) – Directory ofCorporate Partners (PA-65 Corp)Tax Declaration for a State e-FileReturn.

PA-8879-P FormThe federal self-select PIN option con-sists of two PINs, one for the taxpayerand one for the practitioner.

In order for the department to acceptthe federal self-select PIN as a signa-ture, software developers must displaya jurat/disclosure statement (similar tothe language on the PA-8453-P andmeeting the requirements of 72 P.S.§7333 and 61 Pa. Code §121.23) at-tached as Page 3 to PA-8879-P.

Taxpayers and Electronic Return Orig-inators (ERO) must complete PA-8879-

P when using this method and con-senting to electronic funds with-drawals.

The department requires the ERO toretain completed PA-8879-P forms forthree years after the due dates of thereturns or the dates the returns werefiled electronically, whichever is later.Do not mail these forms to the depart-ment.

PA-8453-P FormIf a taxpayer elects not to use the fed-eral self-select PIN option or if the statesubmission is filed as a state stand-alone (no link to an original federalsubmission), the department requiresthe ERO to retain completed PA-8453-P forms for three years after date thereturns were filed electronically:

Do not mail these forms to the depart-ment. PA-8453-P must be completedand signed by all appropriate partiesbefore the return is transmitted elec-tronically.

In the event the department selects anelectronic return for examination, theERO may be required to provide the

PA-8879-P form and, if appropriate, thePA-8453-P form within five businessdays of the request. A percentage ofthese forms will be randomly re-quested yearly for monitoring compli-ance.

E-File Opt-Out OvalMandatory e-filing is now required forthird party practitioners who prepare 11or more PA-20S/PA-65 returns. Entitiesthat prefer their preparers to completea paper return should fill in the opt-oute-filing oval.


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