PA-20S/PA-65 Schedule H: 2025 PA Schedule H - Apportioned Business Income (Loss)/Calculation of PA Net Business Income (Loss) (PA-20S/PA-65 H) (2025)
Pennsylvania · Pennsylvania DOR · Used for tax years 2025
Pennsylvania Schedule H calculates the Pennsylvania share of net business income or loss for the PA-20S/PA-65 Information Return. It reports property, payroll and sales factors used for apportionment, with a special apportionment section for certain transportation and utility ent
Who files this form
Use 2025 PA Schedule H if your business is a PA S corporation, partnership, or LLC classified as a partnership or PA S corporation for federal income tax purposes, and it:
- 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 the Pennsylvania and out-of-state operations qualify as independent profit centers and the books properly disclose Pennsylvania revenues, costs, and expenses. Otherwise, the entity must complete Schedule H.
What you'll need
Have these items ready:
- The entity’s complete name and nine-digit FEIN as shown on the PA-20S/PA-65 Information Return.
- Property, payroll, and sales information showing totals everywhere and amounts within Pennsylvania.
- PA-20S/PA-65 Schedule M, Part II, Section VII, Line 2, for total net business income or loss.
- A statement listing every business or farming location within and outside Pennsylvania. Include the street address, city, state, and type of business, profession, or farm.
- A rental-property schedule if reporting rented property. The form directs you to attach a schedule for rented-property values.
Entities using special apportionment need the information required for their industry’s calculation instead of the standard three factors.
How to file
Complete Schedule H and submit it with the PA-20S/PA-65 Information Return. Include the statement listing all business locations within and outside Pennsylvania.
Enter the Pennsylvania net income or loss from Schedule H, Line 7, on the Information Return, Section II, Line 2e.
The supplied text does not give a mailing address or e-filing directions.
Common mistakes
- Using Schedule H for income from another entity. The form warns not to use this schedule to apportion Pennsylvania-source income from other entities.
- Including other entities’ income on Line 6. Do not include income from other partnerships, estates, or trusts.
- Using the standard three-factor method for certain industries. Railroad, truck, bus, airline, pipeline, natural gas, and water transportation entities must use special apportionment rather than the three-factor approach.
- Including interest and dividends automatically. Include them when reportable as net profits from operating a business. If they were not reclassified on Schedule M, they are not reportable on Schedule H or included in its sales factor.
- Leaving out business locations. Submit a statement listing all places where the entity operates, both within and outside Pennsylvania.
Questions people ask
How do I calculate the standard apportionment factors?
For each of the property, payroll, and sales tables, divide the Pennsylvania amount in Column B by the total-everywhere amount in Column A. Calculate each factor to six decimal places.
What if only one or two factors apply?
Add Lines 1 through 3 on Line 4. For Line 5, divide that total by 3 if all three factors apply, by 2 if only two apply, or by 1 if only one applies. Calculate 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 to calculate Line 7.
Do transportation businesses use the same calculation?
No. Railroad, truck, bus, airline, pipeline, natural gas, and water transportation entities use the Special Apportionment area. The included instructions give different calculations for these industries.