PA-20S/PA-65 Schedule B: 2024 PA Schedule B - Dividend Income and Capital Gain Distributions (PA-20S/PA-65 B) (2024)
Pennsylvania · Pennsylvania DOR · Used for tax years 2024
PA-20S/PA-65 Schedule B reports dividend income and capital gain distributions earned by PA S corporations, partnerships, and limited liability companies filing as either. It calculates the Pennsylvania-taxable amount to enter on 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 B to report dividend income and capital gain distributions.
Report the total dividends earned by the entity itself. The instructions say there is no need to separate resident and nonresident portions.
What you'll need
Have these forms and records available to complete Schedule B:
- PA-20S/PA-65 Information Return: Use the same business name and nine-digit FEIN.
- Federal Schedule K from Form 1065 or Form 1120S: Use the ordinary dividend income and other tax-exempt income amounts specified in the line instructions.
- Federal Schedules K-1 from other entities: Include dividend income reported on these schedules.
- PA-20S/PA-65 Schedule M, Part I: This supplies amounts used for ordinary dividends, working-capital dividends, and capital gain distributions.
- Entity books and records: Use these to identify federally taxed dividend income that is exempt for Pennsylvania purposes. List sources and amounts for the exempt income reported on Lines 4 and 8.
If Line 5 includes actual payments of foreign corporation earnings and profits covered by the Repatriation Transition Tax discussion, provide a statement explaining the nature and source of those payments.
Common mistakes
- Treating mutual fund capital gain distributions as capital gains for Pennsylvania purposes: The instructions specifically note that Pennsylvania taxes these distributions as dividends.
- Using an inconsistent ordinary dividend amount: The instructions remind filers that Line 1 should also match PA-20S/PA-65 Schedule M, Part I, Line 5, Column (a).
Questions people ask
Where does the final Schedule B amount go?
Subtract Line 8 from Line 7 and enter the result on Line 9. Transfer that amount to the PA-20S/PA-65 Information Return, Page 1, Section III, Line 4.
How do I report dividends treated as working capital?
On Line 2, enter the business or rental dividend income reported on Schedule M, Part I, Line 5, Column (b) and/or Column (f). Subtract Line 2 from Line 1 to calculate adjusted federal dividend income on Line 3.
Are all federally exempt interest dividends exempt in Pennsylvania?
No. For regulated investment companies investing in state and local bonds, only federally exempt interest dividends derived from Pennsylvania state and local bonds are exempt for Pennsylvania personal income tax purposes. Those derived from other state and local bonds are fully taxable.
Do I need to identify the sources of exempt dividend income?
Yes. List sources and amounts in the spaces provided for federal-exempt dividend income taxable in Pennsylvania on Line 4 and Pennsylvania-exempt dividend income included on Line 7 that you report on Line 8.