PA-40 Schedule UE: 2024 PA Schedule UE - Allowable Employee Business Expenses (PA-40 UE) (2024)

Who files this form

Complete and include PA Schedule UE with your original 2024 PA-40 if you report unreimbursed employee business expenses on PA-40 Line 1b.

Allowable expenses must be ordinary and accepted in your occupation, actually paid while performing your job, reasonable, necessary, and directly related to your work.

• Complete a separate schedule for each job or position. Spouses cannot share a Schedule UE, even when filing a joint return or working for the same employer.
• Sole proprietors, partners, shareholders, and other self-employed individuals should not use this schedule to claim expenses.
• If employer reimbursements exceed allowable expenses, complete Schedule UE and report the excess as compensation on PA-40 Line 1a.
• Nonresidents must use PA Schedule NRH to apportion expenses. Part-year residents who earned income and incurred expenses both inside and outside Pennsylvania must also complete Schedule NRH.

What you'll need

Have your employer's name, local address, local telephone number, and federal employer identification number from Box b of Form W-2 available. You also need a description of your job duties and the amounts of your expenses and reimbursements.

Keep supporting documents, receipts, vouchers, and other records for at least four years.

Depending on your claim, include:

• A detailed statement if you have more than two miscellaneous expenses.
• Statements listing property maintenance, other apportionable property expenses, and office supplies by type and amount for an office or work area claim.
• A vehicle depreciation statement showing the vehicle description, acquisition date, cost or other basis, depreciation method, Section 179 expense if taken, accumulated depreciation previously taken, and depreciation for the year.
• Separate schedules or a statement showing Lines 7a through 10 for each vehicle if you use actual expenses for more than one vehicle.

You may also provide an employer letter verifying that the expenses are required and explaining reimbursement arrangements. The employer can use Form REV-757. Alternatives are the employer's expense reimbursement policy or Form REV-775, Personal Income Tax Employee Business Expense Affidavit.

How to file

Include the completed Schedule UE with your original PA-40 when claiming unreimbursed employee business expenses on Line 1b. The supplied text does not give a mailing address or an e-file method for Schedule UE.

• Enter the name of the person claiming the expenses. For a joint return, use the Social Security number of the taxpayer listed first on the PA-40, even if the expenses belong to the spouse.
• Report money amounts in whole dollars. Drop amounts below $0.50 and round amounts of $0.50 or more up to the next dollar.
• Complete the expense sections that apply, then total Lines A through G on Line H. Account for reimbursements under the Line I instructions and subtract Line I from Line H on Line J.
• If Line H exceeds Line I, report the difference on PA-40 Line 1b. If Line I exceeds Line H, report the excess on PA-40 Line 1a.

To change expense amounts after filing, include an amended Schedule UE with Schedule PA-40 X. Explain the increase or decrease in Section III on Page 2 of Schedule PA-40 X.

Common mistakes

• Combining jobs or spouses on one schedule. A separate Schedule UE is required for each job or position and each taxpayer.
• Leaving required questions blank. The department will disallow office or work area expenses or education expenses if you do not answer all three questions in the applicable section.
• Claiming vehicle depreciation with standard mileage. You cannot claim depreciation for a vehicle when using the standard mileage rate method.
• Using federal per-diem amounts. Deductible travel expenses must be based on expenses actually paid, not federal per-diem allowances.
• Using the federal home-office safe harbor. Pennsylvania requires actual office or work area expenses instead.
• Overlooking residency allocation. Nonresidents and part-year residents who earned income and incurred expenses inside and outside Pennsylvania must complete Schedule NRH.
• Changing depreciation methods without permission. Once selected, a depreciation method must be used consistently unless the PA Department of Revenue permits a change.

Questions people ask

Can I deduct my commute to work?

No. Travel between home and your main workplace is a personal commuting expense, regardless of distance. Commuting between different jobs for different employers is also not allowable.

Can I claim meals while working late?

No, unless you are traveling away from home overnight on business. Allowable meal expenses are deductible at 100 percent for Pennsylvania purposes, but you must use actual expenses, not federal per-diem rates.

When can I claim education expenses?

The education must be required by law or your employer to retain your established employment status or rate of compensation. It cannot meet the entry-level or minimum requirements for your job or qualify you for a new occupation, trade, or business. Education taken only to maintain or improve skills is not deductible.

What distance test applies to moving expenses?

Your new workplace must be at least 35 miles farther from your old home than your old workplace was. The move must be within or into Pennsylvania, and the other moving-expense requirements must also be met. Military personnel do not have to meet the distance test for a permanent change of duty station.

Do I need to complete Side 2?

You can skip Side 2 if you have no office or work area, moving, education, or depreciation expenses to report there. Complete Lines H through J on Side 1.

Official sources

• https://www.pa.gov/content/dam/copapwp-pagov/en/revenue/documents/formsandpublications/formsforindividuals/pit/documents/2024/2024_pa-40ue.pdf