PA-40 Schedule F: PA Schedule F – Farm Income and Expenses (PA-40 F) (Revision)
Pennsylvania · Pennsylvania DOR · Used for tax years 2024, 2025, 2026
PA Schedule F reports income and expenses from a business operated as a farm and calculates net farm profit or loss for your Pennsylvania tax return. It includes sections for cash and accrual accounting methods.
Who files this form
Use PA Schedule F to report income or loss from a business you operate as a farm. Farming includes qualifying agricultural, horticultural, floricultural, dairy, fur-ranching, and commercial game bird or aquatic animal propagation activities. Gardening and similar noncommercial activities are not farming.
- If you own or operate more than one farm or farming operation, submit a separate PA Schedule F for each operation.
- If you and your spouse own a farm entity treated as a qualified joint venture for federal income tax purposes, each spouse must report their share of income and expenses on a separate PA Schedule F.
- Report rental income from farm production or crop shares on PA Schedule E, whether or not you materially participate in producing that income.
What you'll need
Have the following information and records ready, as applicable:
- The owner's name as shown on the PA tax return and Social Security number.
- Your Federal Employer Identification Number (FEIN) and PA Sales Tax License Number, if you have them.
- Records of farm sales, other income, expenses, and reimbursements. The instructions say to maintain separate books and records for Pennsylvania personal income tax purposes.
- Form 1099-PATR for cooperative distributions.
- Form 1099-G, Box 9, for reportable Commodity Credit Corporation loan market gain.
- Depreciation records, including Pennsylvania basis and the depreciation method used.
- Beginning and ending inventory amounts and purchase costs if you use the accrual method.
If you report more than one type of income on Line 7b, include a schedule showing those items.
How to file
Include PA Schedule F with Form PA-40, PA-20S/PA-65, or PA-41. The supplied text does not give a mailing address or an e-filing procedure for Schedule F.
To complete the schedule:
- Enter the owner's identifying information, the four-digit principal agricultural activity code, and a one- or two-word description of the principal crop or output.
- If you use the cash method, complete Sections I and II. If you use the accrual method, complete Sections II and III and enter the amount from Section III, Line 51, on Section I, Line 12.
- Enter amounts in whole dollars. Drop amounts below $0.50 and round amounts of $0.50 or more up to the next dollar.
- Subtract total expenses on Line 38 from gross income on Line 12. Enter the result on Line 39 and on your PA tax return. Fill in the loss oval if the result is a net loss.
Common mistakes
- Including personal expenses. Do not include personal or living expenses in farm deductions. Reduce deductions by reimbursements before entering them.
- Copying federal figures without checking Pennsylvania rules. Pennsylvania does not generally follow federal tax accounting rules. Certain federal elections to accelerate, defer, or spread income and expenses prevent you from using the federal amounts.
- Using farm income averaging. Pennsylvania does not allow it.
- Putting oil and gas royalties on Schedule F. Report royalties and temporary easement or right-of-way payments on PA Schedule E. Report express easements lasting 15 years or longer and permanent right-of-way payments on PA Schedule D.
- Using the federal home office safe harbor. Pennsylvania requires actual expenses to calculate the home office deduction.
- Deducting your own labor. Do not deduct the costs of your own participation in the farm.
Questions people ask
Can I use either the cash or accrual accounting method?
You may use any accounting method for Pennsylvania purposes as long as you apply it consistently. Cash-method filers complete Sections I and II. Accrual-method filers complete Sections II and III and Line 12 of Section I.
What if I do not have an FEIN or a PA Sales Tax License Number?
Leave the applicable space blank if you do not have that number.
How do I report crop damage payments from an oil or gas producer?
Include them as other income on PA Schedule F. Report all crop damage payments in the year received, even if the payment covers multiple years of damage.
Can I deduct interest on money I personally borrowed to buy or improve a farm?
No. If you personally borrow money to acquire a farm or farm interest, or to improve your farm, the interest is not deductible on any PA schedule or tax return. If the farm business itself incurs the debt, it may deduct the interest expense.