PA-20S/PA-65 Schedule CP: 2024 PA Schedule CP - Corporate Partner CNI Withholding (PA-20S/PA-65 CP) (2024)
Pennsylvania · Pennsylvania DOR · Used for tax years 2024
Pennsylvania Schedule CP is used by partnerships to calculate corporate net income tax withholding for nonfiling corporate partners that are C corporations. It reports the partner’s federal Schedule K-1 income, losses and deductions, income apportioned to Pennsylvania, and tax wi
Who files this form
Partnerships complete Schedule CP to calculate Pennsylvania corporate net income tax withholding for nonfiling corporate partners that are C corporations required to file Form RCT-101, PA Corporate Net Income Tax Report. Complete a separate Schedule CP for each nonfiling corporate partner.
The text defines a noncompliant corporate partner as a corporation that has not filed RCT-101 and paid corporate net income tax for the previous taxable year. Schedule CP is not required for compliant corporate partners who file RCT-101, and withholding is not calculated for those partners.
What you'll need
- The corporate partner’s federal Form 1065 Schedule K-1, showing income, losses and deductions.
- A completed PA-20S/PA-65 Schedule H-Corp, which must be prepared before Schedule CP to apportion business income or loss.
- The corporation’s and partnership’s names, addresses and nine-digit FEINs.
- The corporate partner’s percentages of profit sharing, loss sharing and capital ownership.
- The date the corporation became a partner and the date the partnership began doing business in Pennsylvania, in MMDDYYYY format.
- A statement supporting other income, losses or deductions reported on Line 12.
- A separate statement with the complete foreign address if it does not fit in the form’s spaces.
How to file
- Complete Schedule H-Corp before preparing Schedule CP.
- Enter the corporate partner’s information in Section I and the partnership’s information in Section II.
- Use the corporate partner’s federal Schedule K-1 amounts for Lines 1 through 12. Add those lines on Line 13.
- Enter the Schedule H-Corp apportionment percentage on Line 14. Multiply Line 13 by Line 14 for Line 15. If the result is a loss, enter zero.
- For tax year 2024, multiply Line 15, if greater than zero, by 0.0849 to calculate withholding on Line 16.
- File all Schedules CP with PA-65 Corp, Directory of Corporate Partners. Give each corporate partner a copy of its Schedule CP for filing its RCT-101, along with a copy of Schedule H-Corp.
The supplied text does not give a mailing address or electronic filing directions.
Common mistakes
- Including individual-partner withholding. Do not submit nonresident individual partner withholding payments with Schedule CP. This schedule is only for C corporation nonfiler withholding.
- Preparing Schedule CP for compliant partners. It is not required for compliant corporate partners who file RCT-101.
- Skipping Schedule H-Corp. Complete it before preparing Schedule CP.
- Leaving out certain foreign income. Line 12 must include income subject to the Repatriation Transition Tax that is reported on the federal K-1’s Other income line.
- Using the wrong foreign-address format. Use uppercase letters, enter only the country name in the city field, enter “OC” in the state field and leave the ZIP code blank. Failure to follow the address standards may delay processing.
Questions people ask
What does Line 16 represent?
It is the corporate net income tax withholding remitted by the issuing partnership on the corporation’s behalf.
Can the partnership adjust federal Schedule K-1 income?
Yes. The partnership is permitted to adjust federal Form 1065 Schedule K-1 income for expenses or deductions.
What if income apportioned to Pennsylvania is a loss?
Enter zero on Line 15 if the calculation produces a loss.
Does a fully corporate-owned partnership list compliant partners on PA-65 Corp?
Yes. Partnerships that are 100 percent corporate owned must list all corporate partners on the PA-65 Corp Directory, whether compliant or not, based on RCT-101 filing requirements.