PA-20S/PA-65 Schedule OC: 2024 PA Schedule OC - Other Credits (PA-20S/PA-65 OC) (2024)
Pennsylvania · Pennsylvania DOR · Used for tax years 2024
PA Schedule OC reports an entity’s share of other tax credits for the PA-20S/PA-65 Information Return, after applying credits to the entity’s corporate tax liability, if any. It lists individual credits and calculates total PA other credits.
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 OC to report their share of each tax credit received after applying the credit to the entity’s corporate tax liability, if any.
Do not report credits passed through from another entity on Schedule OC, except for the Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC).
What you'll need
- Credit approval documents: Submit the tax credit certificate or award notification for every credit claimed with Schedule OC.
- Entity information: Use the complete business name and nine-digit FEIN shown on the PA-20S/PA-65 Information Return.
- Pass-through request, if applicable: Use the claim form on the reverse side of the award letter or a request on entity letterhead. List the total credit to be distributed, each owner’s name and address, each owner’s credit amount, the tax year, tax type, and each owner’s tax identification number. An authorized entity representative must sign the statement.
- EITC or OSTC election: Complete a separate REV-1123 for each year a credit is awarded and not used in whole or in part.
- Out-of-state credit for an S corporation: Submit the C corporation return when claiming credit for taxes paid to another state that taxes the entity as a C corporation.
How to file
Complete Schedule OC
- Enter the business name and FEIN as shown on the PA-20S/PA-65 Information Return.
- Enter each credit on its designated line. For other restricted credits on Line 20, enter the credit type. Line 21 is for out-of-state credits for S corporations only.
- Add Lines 1 through 21 and enter the total on Line 22. Also enter that total on the PA-20S/PA-65 Information Return, Section V, Line 13a.
- Submit the approval certificate or award notification for each credit with Schedule OC.
Submit requests to pass credits through to owners
Email the claim form or signed request letter to the Department of Revenue’s Office of Economic Development at ra-rvtaxcredits@pa.gov. The subject line must include the credit name and specify the attachment type, “claim form.” The statement should be submitted before owners file their individual tax returns.
For EITC or OSTC, submit REV-1123 by email to the Bureau of Individual Taxes at REV1123@pa.gov. The subject line must include the credit name and specify the attachment type, “1123 form.” These email directions apply to the pass-through requests, not to Schedule OC itself.
Common mistakes
- Leaving out approval documents: A certificate or award notification is required for every credit claimed.
- Reporting credits received from another pass-through entity: Do not report these on Schedule OC, except for EITC and OSTC.
- Passing through more credit than an owner can use: The election is irrevocable. The entity should not pass through more than the owner can use in a single year.
- Skipping required entity-level use: Some credits must first be applied to the entity’s corporate tax liability. Review the rules for the specific credit before passing it through.
- Deducting expenses that Pennsylvania does not allow: Certain expenses used to qualify for NAP and EITC cannot be deducted. If deducted for federal purposes, report them as a reduction in expenses on Schedule M, Part II, Section V, Line f.
- Using Line 20 for a resident credit for an entity-level tax: The instructions specifically say not to use Line 20 for this purpose.
- Allocating an out-of-state resident credit to nonresidents: Only Pennsylvania resident shareholders can claim credit for taxes paid to other states by the entity.
Questions people ask
Were any new credits introduced for 2024?
No. The text states that no new credits were introduced for 2024.
Are restricted tax credits refundable?
No. Restricted tax credits are nonrefundable. Other applicable nonrefundable credits must be applied before restricted tax credits.
Can an owner save a passed-through credit for a later year?
No. An owner receiving a transferred credit must claim it in the tax year of the transfer. The owner may not carry it forward or back, obtain a refund, sell it, assign it, or pass it through again.
How are unused credits divided among owners?
An entity may elect in writing to pass through all or part of its unused approved credits in proportion to each owner’s share of the entity’s distributive income.
Where can I ask questions about using credits claimed on Schedule OC?
Contact the Pennsylvania Department of Revenue at 717-772-3896.