PA-40 Schedule B: 2024 PA Schedule B - Dividend Income (PA-40 B) (2024)
Pennsylvania · Pennsylvania DOR · Used for tax years 2024
PA-40 Schedule B reports dividend income and capital gains distributions and adjusts federal dividend income to determine the amount taxable by Pennsylvania. The total is entered on Line 3 of Form PA-40.
Who files this form
Pennsylvania residents and part-year residents must complete and include PA Schedule B with their 2024 PA-40 if they have any amounts on Lines 2 through 11, excluding subtotal Line 6.
If none of those lines has an amount, do not include Schedule B. You must still report your dividend income on Line 3 of the PA-40. Nonresidents are not required to complete PA Schedule B.
For a taxpayer and spouse, separate schedules are required if either has an amount on those lines. Include both schedules even if only one spouse has such amounts. One joint schedule may be used if all dividend income is earned jointly. If there is both joint and separate income, split the joint income between the separate schedules.
What you'll need
Have the following available, as applicable to your income:
- Your federal income tax return, including dividend income on Line 3b, and federal Schedule B.
- Federal Forms 1099-DIV, including exempt-interest dividend information.
- Federal Schedule D, or the capital gains distributions reported directly on your federal return.
- PA Schedules RK-1 and federal Schedules K-1 for income from S corporations and partnerships.
- Information about Pennsylvania and U.S. government obligations included in tax-exempt fund dividends, plus amounts and descriptions for other adjustments.
- For repatriated foreign income, the IRC Section 965 Transition Tax Statement for 2017 and information about related cash payments received in prior years and in 2024.
You will also need the name and Social Security number shown first on the PA-40, including when preparing a separate schedule for the spouse.
How to file
Complete PA Schedule B and include it with your PA-40 when required. The supplied text does not give a mailing address or e-filing directions.
- Enter the required name and Social Security number. Fill in the taxpayer, spouse, or joint oval to show whose income is reported.
- Report amounts in whole dollars. Drop amounts below $0.50 and round amounts of $0.50 or more up to the next dollar.
- Complete the applicable income and adjustment lines. Provide descriptions for adjustments on Lines 4 and 8.
- Add Lines 6, 7, 8, 9c, 10, and 11 to calculate Line 12. Report that total on Line 3 of the PA-40. For spouses filing jointly with separate schedules, combine their Line 12 amounts.
If you discover an increase or decrease in Schedule B income after filing, include an amended Schedule B with Schedule PA-40 X. Explain the change in Section III on Page 2 of Schedule PA-40 X.
Common mistakes
- Assuming federal and Pennsylvania dividend rules are the same. The form warns that they differ.
- Using the joint oval when either spouse has separate dividend income. Split jointly earned income between separate schedules, and include only each person's share on each line.
- Including tax-exempt interest on Line 7. That line is for exempt-interest dividends, not the tax-exempt interest included on federal return Line 2a.
- Leaving out dividends because no federal return is required. The instructions say to report Box 1 amounts from all Forms 1099-DIV and other federally taxable dividend income on Line 8 in this situation.
- Omitting repatriated foreign-income cash payments because no Form 1099-DIV arrived. These payments must still be reported as Pennsylvania dividend income.
- Reporting a negative Line 12 total. Line 6 may be negative, but Line 12 cannot. A negative total indicates a missing addition or excessive adjustments.
Questions people ask
Do I still report dividends if I do not need Schedule B?
Yes. Report the dividend income on Line 3 of your PA-40 even when Schedule B is not required.
Where do capital gains distributions go?
Enter them on Line 10. Use the amount included as capital gains on federal Schedule D, or the amount reported directly on your federal return if Schedule D is not required.
Can I subtract expenses incurred to earn dividend income?
Do not include those expenses as a reduction on Line 4. The instructions list expenses incurred to realize dividend income among the addition adjustments for Line 8.
What if I received a federal Schedule K-1 but no PA Schedule RK-1?
For Line 11, report dividend income from PA S corporations and partnerships using federal Schedules K-1 if PA Schedules RK-1 were not provided.