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Details:
• PA-40 Form:The PA-40 form’s signature lines and tax preparer information area was re-organized and an oval or question area was added to permit practitioners to indicate whether the taxpayer or preparer elected to opt out of the e-filing mandate. (The e-file opt out indicator is only to be used when a taxpayer specifically requests a paid preparer to file via paper.)
Obsolete Forms - Reminder
PA-40 Schedule C-F Reconciliation and PA Schedule OC-V.
Both of these forms were made obsolete for 2009 and have not been renewed.
• PA-40 booklet forms:
• Schedule J:PA-41 was added to the “Read the Instructions” paragraph before each reference to PA Schedule RK-1 or NRK-1. PA-20S/PA-65 was added to the line of the form for reporting trust income from partnerships and S corporations and parentheses were removed so that it now reads “Income from partnerships and PA S corporations, from your PA-20S/PA-65 Schedules RK-1 or NRK-1.”
• PA-40 booklet instructions:Student loan debt forgiveness and employer student loan payments are considered taxable compensation for PA personal income tax purposes and language was added to the booklet to include this.
- Language was added regarding the inclusion of PA Schedules RK-1 or NRK-1 and Federal K-1s for partnerships and S corporations for paper returns.
- Language was added to the booklet to include that Mega Millions lottery prizes from tickets purchased in Pennsylvania are not taxable for PA personal income tax purposes.
- A table was added to the instructions to provide a cross reference of where income, losses, credits and other information from PA Schedules RK-1 and NRK-1 should be reported on the PA-40 and related schedules.
- Additional instructions and guidance were included regarding the filing of amended returns and when a Petition for Refund should be filed instead of an amended return.
• Schedule W-2S Part B:Additional instructions or Filing Tips were provided for determining taxation of: traditional IRA to Roth IRA conversions and how to report nontaxable amounts; taxpayer reporting of distributions from commercial insurance company annuities; distributions from Employee Stock Ownership Plans; and distributions of excess earning and contributions.
• PA Schedule OC:Additional information will be requested for credits passed through to individuals regarding the awarded/pass through entity’s EIN. An “Awardee Tax ID Number” box was added for each credit line. The department may also add a line to the form entitled “Other Restricted Credits” in order to accommodate late legislative changes for a(n) additional credit(s) added after forms and instructions are finalized.
• REV-1630:The REV-1630, Underpayment of Estimated Taxes by Individuals, will be revised to remove the farmer instructions and worksheets. Examples of when EUP is applied and how to calculate EUP are being considered for addition to the instructions.
• Legislative Changes:
• Known changes:Federal legislation at the end of 2009 impacted PA personal income taxes. The Military Spouses Residency Relief Act provided that spouses of military personnel were no longer subject to tax on any compensation that they might earn within the state where their service member spouse was stationed. PA non-resident military personnel stationed in PA living with their spouses within PA would be eligible to exclude their spouse’s income from PA taxation. Conversely, spouses of PA resident military personnel stationed outside PA would be subject to PA personal income tax on any wages they earned in the other state or country. For additional information and examples of what to include with a return and how to report the exemption of the income from taxation, see Tax Bulleting 2010-01.
- Act 46 of 2009 allows the department to require e-filing of personal income tax returns for paid preparers. An E-File Opt Out oval/block was added to the forms for paid preparers who are not able to e-file a return based upon a client/taxpayer request, e-file schedule or number of documents limitations, or software limitations. Specific instructions and additional information will be available at a later date.
• Tentative changes:An additional restricted credit for employment of individuals on sites considered to be Brownfields is being considered by the PA legislature. The department may add a line to PA Schedule OC to accommodate this new credit.
• PA-1000:Page 1 of the PA-1000 was redesigned to remove the indentations of the amounts spaces for Lines 11a through 11g. In addition, the line immediately after Line 11g, Line 11, entitled “Other Income. Enter the total of lines 11a through 11g” was removed from the form. All bold font type for Lines 11a through 11g was also removed.
• PA-1000 booklet forms:
• PA-1000:Line 6 of the PA-1000 is now “Total Benefits from Pension, Annuity, IRA Distributions Veteran’s Disability and Railroad Retirement Tier 2”.
• PA-1000 instructions:Instructions were included to indicate that a claimant and spouse who live apart because one lives in a nursing home and the other lives in a home or dwelling may be eligible for separate rebates. Claimants in these situations should not include the spouses SSN on the claim form they file separately from their spouse.
- Instructions were included to add that old age benefit programs from other countries are to be reported on Line 6.
- The instructions were revised such that an individual who lives within a dwelling of another must have a bonafied landlord(lessor)-tenant(lessee) relationship evidenced by a lease agreement whenever a room is rented.
- Additional instructions were included to indicate that Direct Deposits cannot be made to Social Security Direct Express cards.
• Legislative Changes:There were no legislative changes that affected the Property Tax and Rent Rebate program and there are no legislative changes expected for the remainder of the year.
• PA-20S/PA-65 Schedule RK-1:The name of the schedule was formatted to be consistent among all the schedules. “of PA S” was deleted from the name of the schedule. Changed the name to “Resident Schedule of Shareholder/Partner/Beneficiary Pass Through Income, Loss and Credits.” Part I – “Receiving RK-1” was added to “Name of Owner.” Changed line to “Name of Owner Receiving RK-1 (if other than an individual).”
- Part 1 – “Issuing RK-1” was added to “Name of Entity.” Changed line to “Name of Entity Issuing RK-1.”
- Line 16 – “(loss)” was added after income.
• PA-20S/PA-65 Schedule NRK-1The name of the schedule was formatted to be consistent among all the schedules.“of PA S” was deleted from the name of the schedule. Changed the name to “Resident Schedule of Shareholder/Partner/Beneficiary Pass Through Income, Loss and Credits.” Part I – “Receiving NRK-1” was added to “Name of Owner.” Changed line to “Name of Owner Receiving RK-1 (if other than an individual).”
- Part 1 – “Issuing NRK-1” was added to “Name of Entity.” Changed line to “Name of Entity Issuing RK-1.”
- Line 14 - “(loss)” was added after income.
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