PA-20S/PA-65 Schedule H: 2024 PA Schedule H - Apportioned Business Income (Loss)/Calculation of PA Net Business Income (Loss) (PA-20S/PA-65 H) (2024)
Pennsylvania · Pennsylvania DOR · Used for tax years 2024
Pennsylvania Schedule H calculates the Pennsylvania share of net business income or loss reported on the PA-20S/PA-65 Information Return. It uses property, payroll and sales factors, or special apportionment for certain transportation and utility entities.
Who files this form
Use 2024 Schedule H if a PA S corporation, partnership, or LLC classified as a partnership or PA S corporation for federal income tax purposes:
- Derives business income from sources both within and outside Pennsylvania; or
- Is located in a Keystone Opportunity Zone (KOZ).
For businesses operating partly within Pennsylvania, the included instructions allow separate accounting when Pennsylvania and out-of-state operations are independent profit centers and the books properly identify Pennsylvania revenues, costs, and expenses. Otherwise, complete Schedule H.
Railroad, truck, bus, airline, pipeline, natural gas, and water transportation entities use special apportionment instead of the three-factor method.
What you'll need
Have these records and supporting items ready:
- Your PA-20S/PA-65 Information Return, including the entity name and nine-digit FEIN shown on it.
- PA-20S/PA-65 Schedule M, Part II, Section VII, Line 2, for total net business income or loss.
- Property, payroll, and sales records showing amounts everywhere and within Pennsylvania, if those factors apply.
- A statement listing every location where the entity conducts business or farming, both within and outside Pennsylvania. Include each street address, city, state, and type of business, profession, or farm.
- A rental-property schedule if reporting rented property. The form requires this attachment.
The included instructions also require a partnership with one or more entity partners to complete Schedule H-Corp and provide a copy to each entity partner.
How to file
Complete Schedule H and submit it with the PA-20S/PA-65 Information Return. Attach the statement listing all business locations within and outside Pennsylvania.
Transfer Schedule H, Line 7, to Section II, Line 2e, of the PA-20S/PA-65 Information Return.
The supplied text does not give a mailing address or e-filing instructions.
Common mistakes
- Using Schedule H for income from another entity. Do not use this schedule to apportion PA-source income from other entities.
- Including other entities’ income on Line 6. The instructions say not to include income from other partnerships, estates, or trusts.
- Using three-factor apportionment for a special-apportionment business. Railroad, truck, bus, airline, pipeline, natural gas, and water transportation entities must use the special rules.
- Including interest and dividends automatically. Include them when reportable as net profits from business operations. The instructions note that interest and dividends not reclassified on Schedule M are not reportable on Schedule H or included in its sales factor.
- Leaving out the location statement. Submit a statement listing all places where the entity operates, both within and outside Pennsylvania.
Questions people ask
How are the three standard factors calculated?
For property, payroll, and sales, divide the Pennsylvania amount in Column B by the everywhere amount in Column A. Calculate each factor to six decimal places.
Do I always divide the total factors by three?
No. On Line 5, divide Line 4 by three if all three factors apply, by two if only two apply, or by one if only one applies. Calculate the result to six decimal places.
How do I calculate Pennsylvania net business income or loss?
Enter the amount from Schedule M, Part II, Section VII, Line 2, on Schedule H, Line 6. Multiply Line 6 by the apportionment figure on Line 5 and enter the result on Line 7.
What if I received a federal Schedule K-1 instead of a PA Schedule K-1?
Do not use Schedule H to apportion PA-source income from that other pass-through entity. The instructions direct you to report the information on the PA-20S/PA-65 Information Return, Section I, Line 1b, and Section II, Lines 2b and 2f.