PA-20S/PA-65 Schedule A: 2025 PA Schedule A - Interest Income (PA-20S/PA-65 A) (2025)
Pennsylvania · Pennsylvania DOR · Used for tax years 2025
PA-20S/PA-65 Schedule A reports interest income earned by PA S corporations, partnerships and LLCs filing as either entity type. It adjusts federal interest income to calculate Pennsylvania-taxable interest income for the PA-20S/PA-65 Information Return.
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 is not included in another income class. Interest that is statutorily exempt from Pennsylvania tax is not reported as taxable interest.
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 federal employer identification number (FEIN).
- Federal Schedule K: Interest income comes from Form 1065, Line 5, or Form 1120S, Line 4. Tax-exempt interest income comes from Form 1065, Line 18a, or Form 1120S, Line 16a.
- Federal Schedules K-1 from other entities: Include the interest income shown on them.
- PA-20S/PA-65 Schedule M, Part I: Use Line 4 to reconcile federal interest income and identify business or rental interest income treated as working capital.
- Entity books and records: Use these to identify federally taxed interest that is exempt for Pennsylvania purposes. Have the sources and amounts of federal-exempt and Pennsylvania-exempt interest ready to itemize.
Common mistakes
- Assuming federal tax-exempt interest is also exempt in Pennsylvania. The instructions warn that federal exemption does not automatically mean Pennsylvania exemption.
- Reporting interest in the wrong income class. Interest included in business, rental, royalty, or property-disposition income is excluded from the interest income class as described in the instructions. Working-capital interest is reported through Schedule M, Part I, and Schedule A, Line 2.
- Deducting an early-withdrawal interest penalty against unrelated interest. A forfeited-interest penalty may only reduce interest from the account or certificate involved. Any excess may be reported as a loss on Schedule D, Part I, or Part III, Line 13.
- Leaving out interest from other entities. Line 1 must include federal Schedule K-1 interest income from other entities and should match Schedule M, Part I, Line 4, Column (a).
Questions people ask
Do I need to separate resident and nonresident interest?
No. Schedule A and the PA-20S/PA-65 Information Return report the total interest earned by the entity itself. The instructions say there is no need to distinguish resident and nonresident portions.
Where do I report business or rental working-capital interest?
Enter it on Schedule A, Line 2, using the amount reported on Schedule M, Part I, Line 4, Column (b) and/or Column (f). Subtract Line 2 from Line 1 to calculate adjusted federal interest income on Line 3.
Do I need to list the sources of exempt interest?
Yes. The form provides spaces to list sources and amounts for federal-exempt interest and Pennsylvania-exempt interest.
Where does the final Pennsylvania-taxable interest amount go?
Subtract Line 7 from Line 6 and enter the result on Schedule A, Line 8. Also enter that amount on the PA-20S/PA-65 Information Return, Page 1, Section III, Line 3.