PA-20S/PA-65 Schedule A: 2024 PA Schedule A - Interest Income (PA-20S/PA-65 A) (2024)
Pennsylvania · Pennsylvania DOR · Used for tax years 2024
PA-20S/PA-65 Schedule A reports interest income of PA S corporations, partnerships and limited liability companies filing as partnerships or PA S corporations for federal income tax purposes. It adjusts federal interest income to calculate Pennsylvania-taxable interest income for
Who files this form
PA S corporations, partnerships, and limited liability companies filing as partnerships or PA S corporations for federal income tax purposes use Schedule A to report interest income.
The entity must report interest received for the use of its money that it does not include in another income class. Do not report interest from obligations that are statutorily free from Pennsylvania tax.
What you'll need
Have these forms and records available to complete Schedule A:
- PA-20S/PA-65 Information Return: Use the same complete business name and nine-digit FEIN.
- Federal Schedule K: Use Line 5 of Form 1065 or Line 4 of Form 1120S for interest income. The instructions also refer to tax-exempt interest on Line 18a of Form 1065 or Line 16a of Form 1120S.
- Federal Schedules K-1 from other entities: Include the interest income reported on them.
- PA-20S/PA-65 Schedule M, Part I: Use Line 4 to identify federal interest and business or rental interest treated as working capital.
- Entity books and records: Use these to identify federally taxed interest that is exempt for Pennsylvania purposes. List the sources and amounts of the exempt interest requested on Schedule A.
For a listing of taxable and tax-exempt obligations, refer to Pennsylvania form REV-1643, Tax-Exempt Obligations for Pennsylvania Personal Income Tax Purposes.
Common mistakes
- Assuming federal tax exemption also means Pennsylvania exemption. The instructions warn that an obligation exempt from federal income tax is not necessarily exempt from Pennsylvania personal income tax.
- Deducting an early-withdrawal interest penalty from unrelated interest. A forfeited interest penalty may only reduce interest from the same account or certificate. Any penalty exceeding that interest may be reported as a loss on PA-20S/PA-65 Schedule D, Part I or Part III, Line 13.
- Splitting interest into resident and nonresident portions. Schedule A reports the total interest earned by the entity itself. The instructions say there is no need to distinguish between those portions.
Questions people ask
What goes on Line 1?
Enter interest from federal Schedule K, Line 5 of Form 1065 or Line 4 of Form 1120S. Include federal Schedule K-1 interest from other entities. The amount should also match PA-20S/PA-65 Schedule M, Part I, Line 4, Column (a).
How do I handle business or rental interest treated as working capital?
Enter the amount from PA-20S/PA-65 Schedule M, Part I, Line 4, Column (b) and/or Column (f) on Schedule A, Line 2. Subtract Line 2 from Line 1 to calculate adjusted federal interest on Line 3.
Do I need to list sources of exempt interest?
Yes. For both federal-exempt interest taxable for Pennsylvania on Line 4 and Pennsylvania-exempt interest on Line 7, list the sources and amounts in the spaces provided.
Where does the final interest amount go?
Add Lines 3 through 5 to get gross Pennsylvania interest on Line 6. Subtract Line 7 from Line 6 and enter the result on Line 8. Transfer that amount to the PA-20S/PA-65 Information Return, Page 1, Section III, Line 3.