PA-40 Schedule B: 2025 PA Schedule B - Dividend Income (PA-40 B) (2025)
Pennsylvania · Pennsylvania DOR · Used for tax years 2025
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 your PA-40 personal income tax return.
Who files this form
Pennsylvania residents and part-year residents must include Schedule B with their original PA-40 if they have 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 Schedule B.
If either spouse has amounts on those lines, each spouse must complete a separate schedule, even if only one spouse has those amounts. You may use one joint schedule only if all dividend income is earned jointly. Otherwise, split jointly earned income between the separate schedules.
What you'll need
Depending on the income you received, use the following to complete Schedule B:
- Your federal income tax return, including dividend income on Line 3b.
- Federal Forms 1099-DIV, including exempt-interest dividends in Box 12.
- Federal Schedule B and federal Schedules K-1 for dividend income reported through those schedules.
- PA Schedules RK-1 for dividend income from PA S corporations and partnerships. Use federal Schedules K-1 if an RK-1 is not provided.
- Federal Schedule D for capital gains distributions, or your federal return if Schedule D was not required.
- Your IRC Section 965 Transition Tax Statement and amounts of related cash payments received in prior years and the current year, if applicable.
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
Include Schedule B with your PA-40 when required. Mark the taxpayer, spouse, or joint oval to identify whose income the schedule reports.
Add Lines 6, 7, 8, 9c, 10, and 11 to calculate Line 12. Report that total on Line 3 of the PA-40. For married taxpayers filing jointly with separate schedules, report the combined Line 12 totals.
If you discover an increase or decrease 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.
The supplied text does not give a mailing address or e-filing instructions.
Common mistakes
- Assuming federal and Pennsylvania rules are the same. The form warns that dividend income rules differ.
- Using the joint oval when some dividend income is earned separately. Split joint income between separate schedules and include only each person's share on each line.
- Including tax-exempt interest on Line 7. The instructions caution that Line 7 is for exempt-interest dividends, not tax-exempt interest included on federal return Line 2a.
- Omitting dividends when no federal return is required. Enter the Box 1 amounts from all Forms 1099-DIV and other federally taxable dividend income on Line 8.
- Leaving out 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. A negative result means an addition was omitted or too much was entered as a reduction.
Questions people ask
How should I round amounts?
Use whole dollars. Drop amounts below $0.50 and round amounts of $0.50 or more up to the next dollar.
Can Line 6 be negative?
Yes. Line 6, which is Line 1 minus Line 5, may be negative. The final total on Line 12 cannot be negative.
Where do I report capital gains distributions?
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 was not required.
Can I deduct expenses incurred to receive dividend income on Line 4?
No. The instructions say not to include those expenses as a reduction on Line 4. They list expenses incurred to realize dividend income among the addition adjustments for Line 8.