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Details:
• Repeal of Deduction for State and Local TaxesLegislation amends the definition of “net income” to repeal the itemized deduction for state and local income and sales taxes that are deductible under federal law for income tax purposes. The law also modifies the definition of “net income” for taxable years beginning on or after January 1, 2011 to exclude the amount included in adjusted gross income (AGI) that represents a refund of state and local income and sales taxes that were deducted for federal tax purposes in taxable years beginning on or after January 1, 2010. See Schedule PIT-ADJ, line 20.
• For tax years beginning on or after January 1, 2012,the penalty for underpayment of estimated tax is not applied if the difference between the taxes for the current year less amounts withheld is under $1,000.
• 2011 PIT forms and instruction packets will not be automatically mailedIn prior years, the Department has been mailing form and instruction packets to taxpayers who filed paper returns in the prior year. This year the Department plans to mail notices to those taxpayers who filed paper 2010 returns, letting them know how to obtain the form packets.
• Form PIT-1the checkboxes for “Blind” and “Over 65” have been moved (from Schedule PIT-ADJ, lines 12a and 12b) to the top of page 1 next to the Residency checkboxes.
• You are no longer required to attach federal Form(s) 8886, Reportable Transaction Disclosure Statement, to your state return, or indicate the federal requirement to file Form 8886 on the state return.
• Form PIT-1, line 7a worksheet for computing the amount of state and local income or general sales tax (if federal deductions were itemized) is in the PIT instructions.
• Form PIT-1, line 9bhas been removed. Because of federal law changes, the standard deduction that included a federal net disaster loss or a new motor vehicle state or local sales or excise tax paid deduction claimed on federal return was removed.
• Form PIT-1, line 25You are required to report tax withheld from a pass-through entity separately from other types of tax withheld.
• Schedule PIT-ADJ, line 12a and 12b“Blind” and “Over 65” checkboxes have been moved to the top of PIT-1, page 1.
• Schedule PIT-ADJ, line 20A deduction may be taken for a refund of state and local income and sales taxes required to be included in federal adjusted gross income on the 2011 federal Form 1040.
• Schedule PIT-CRTax credit descriptions have been removed. Refer to PIT-CR instructions and FYI 106 for a complete description of the credits.
• Schedule PIT-CRThe welfare-to-work program tax credit has been removed.
• Schedule PIT-CR, line 17A new credit has been added to the schedule. Agricultural Biomass Tax Credit is included as a non-refundable credit.
• Schedule PIT-CR, line 18A new credit has been added to the schedule. Film Production Tax Credit (applied to tax due) is included on the tax credit schedule.
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