PA-20S/PA-65 Schedule I: 2025 PA Schedule I - Amortization of Intangible Drilling and Development Costs (PA20S/PA-65 I) (2025)
Pennsylvania · Pennsylvania DOR · Used for tax years 2025
Pennsylvania PA-20S/PA-65 Schedule I reports an S corporation’s, partnership’s or LLC’s deduction for intangible drilling and development costs. It records costs incurred, amounts elected to be immediately expensed for Pennsylvania purposes, and amortization by well.
Who files this form
PA S corporations, partnerships and LLCs use Schedule I to report their Pennsylvania deduction for intangible drilling and development costs (IDCs).
Pennsylvania does not follow the federal election rules for expensing these costs.
What you'll need
Have these returns and records available to complete Schedule I:
- Your PA-20S/PA-65 Information Return, for the entity's name and nine-digit federal employer identification number (FEIN).
- Federal Form 1065 or 1120S, Schedule K, line 13d(2) or 12c, for the total IDCs incurred during the tax year.
- Well records showing each well's description, address, type, production start date and allocated IDCs. Identify wells outside Pennsylvania.
- Records of any geophysical survey completed for wells created before 2014.
- Amortization records, including prior-year amortization and the estimated useful life of wells placed in service before January 1, 2014.
- The amount of IDCs the entity elects to expense for Pennsylvania.
Common mistakes
- Having partners or shareholders make the Pennsylvania election. The entity incurring the costs must make the election, not its partners or shareholders.
- Exceeding the expense limit. The elected expense cannot exceed one-third of the IDCs incurred.
- Leaving line 7(d) blank after choosing the election. If Section II, line 4 is marked “Yes,” Section III, line 7(d) must be completed.
- Running out of room for wells. If lines 6 and 7 need more space, submit additional copies of Schedule I.
- Missing the Schedule M entries. Report Schedule I, line 5 on Schedule M, Part II, Section VI, line h. Report Schedule I, line 8 on Schedule M, Part II, Section VI, line c.
Questions people ask
Can the entity elect to expense IDCs each year?
Yes. This is not a one-time election. A PA S corporation, partnership or LLC may elect each tax year to expense up to one-third of the IDCs it incurs.
What kinds of costs are included?
The instructions list costs necessary to drill and prepare wells for oil and gas production, such as survey work, ground clearing, drainage, wages, fuel, repairs and supplies. The entity can elect to deduct only costs of items with no salvage value.
Which wells go on lines 6 and 7?
Use line 6 for wells placed in service before January 1, 2014. Use line 7 for wells placed in service after December 31, 2013.
How is this year's amortization calculated for line 7?
Subtract the elected expense on line 7(d) from the IDCs on line 7(c) to get the amortizable amount on line 7(e). Divide line 7(e) by 10 to calculate this year's amortization on line 7(g). Accumulated amortization on line 7(f) is zero for the year the well is placed in service.