Form PA-40

Nonresident Returns

When residency status equals “P” for part year resident or “N” for nonresident, only information coded to “PA” as the nonresident state code on the federal forms will carry to Form PA-40.

Military Wages

Enter  code “M” in the State Use field of federal Form W-2 to indicate wages should be excluded from PA income.

Miscellaneous Compensation

Form 1099-R, State Distribution will only carry to PA Schedule MC when a "T" is entered in the State Use field (US04 8240). This will indicate it is taxable to Pennsylvania. The state code must also equal "PA" (US04 0246).

Form 1099-MISC, State Income information will carry to PA Schedule MC. Use the State Use field (USG6 8210) to indicate the PA payment type for Schedule MC, column B.

Income entered on Federal Form 1099-MISC and 1099-C that flows to federal Schedule C will also flow to PA Schedule C. Do NOT enter "PA" as the State Code on Form 1099-MISC and 1099-C. If "PA" is entered, income will carry to PA Schedule MC resulting in a duplication of income.

Employee Business Expenses

An entry in the field next to Form PA-40, line 1b will carry the employee business expense from federal Form 2106 to Form PA-40, line 1b. Federal Form 2106 will also print with the PA tax return.  PA Schedule UE will not be prepared in this situation.

Schedule T

Gambling winnings will not carry to Schedule T when "1" is entered in State Use field on Form W-2G (US03 8200). This is true regardless of the state code present on W-2G (US03 0200).

Schedule NRH

When using Schedule NRH, the assumption is made that all W-2s will be reported on Schedule NRH. Only the totals from Schedule NRH will carry to Form PA-40, line 1a.

Underpayment of Estimated Tax

Exception 1 Worksheet

Exception 1 Worksheet information will calculate when an entry is made to Line 12 – Tax on 2013 income using 2014 tax rate OR an entry is made to Line 12A – Actual taxable income for the period.

Exception 3 Worksheet

Exception 3 Worksheet information will calculate when an entry is made to Part B, Question B – Date PA-40 was filed.

Form PGH-40

Wages will carry to Form PGH-40, line 1 from federal Form W-2, when Form W-2, box 20 equals "PGH" or "Pittsburg".

Withholding will carry to Form PGH-40, line 7 from federal Form W-2, box 19 when Form W-2, box 20 equals "PGH" or "Pittsburg".

Employee business expenses from PA Schedule UE will carry to Form PGH-40, line 2 when PA Schedule UE “City Code” (PA22 9051) equals “Pittsburgh”.

Generic Cities Form

Use the “City Code” field (PA70 9051) on the generic city form to automatically carry information from the federal and Pennsylvania tax return. Information from activities with the same code will carry to the current occurrence of the city form. For example, “Generic City 1” is entered on PA70 9051.  If “Generic City 1” is also entered in the “State Use” field on federal Form W-2, the local wage amount will carry to line 1 of the city form. You will find “City Code” fields at the federal level on Schedule C, F, E and Forms K-1. There is also a “City Code” field on PA Schedule UE.