PA-41 Schedule N: 2024 PA-41 Schedule N - PA-Source Income and Nonresident Tax Withheld (PA-41 N) (2024)
Pennsylvania · Pennsylvania DOR · Used for tax years 2024
PA-41 Schedule N is a Pennsylvania tax schedule for estates and trusts with nonresident beneficiaries. It calculates Pennsylvania-source income, the amount distributed or distributable to nonresident beneficiaries, and the tax withheld and allocated to those beneficiaries.
Who files this form
Estates and trusts with nonresident individuals or nonresident estates that have distributed or distributable Pennsylvania-source income must complete PA-41 Schedule N and submit it with the PA-41, Fiduciary Income Tax Return.
The schedule calculates Pennsylvania-source income, the share distributed or distributable to nonresident beneficiaries, and the tax withheld. It includes entries for nonresident individual, estate, and trust beneficiaries.
Schedule N is not required if there is no distributed or distributable Pennsylvania-source income, or if the beneficiaries do not include nonresident individuals, estates, or trusts.
What you'll need
Have the following available, as applicable:
- PA-41: Use the same estate or trust name and FEIN or decedent’s SSN.
- PA-41 Schedule DD: Needed to determine distributed or distributable Pennsylvania-source income and certain beneficiary percentages.
- Income schedules: PA Schedule C for business income, PA Schedule F for farm income, PA Schedule E for rents and royalties, and PA-41 Schedule D for property sales.
- PA Schedule NRH: Required when a business or farm operates both inside and outside Pennsylvania.
- Schedules NRK-1: PA-20S/PA-65 Schedules NRK-1 from applicable entities and PA-41 Schedules NRK-1 from other estates or trusts.
- Beneficiary information: Names, SSNs or FEINs, and year-end distribution percentages. The percentages may come from the governing instrument or the distribution calculation described in the instructions.
- Supporting statements: Include details when reporting multiple businesses or farms, multiple entities, multiple property sales, or income from more than one estate or trust. Additional sheets or statements are needed for more than eight nonresident beneficiaries.
How to file
Complete PA-41 Schedule N and any accompanying statements, then submit them with the PA-41, Fiduciary Income Tax Return.
The provided text does not give a mailing address or e-file instructions.
Common mistakes
- Using the wrong identification number: An estate with an FEIN should not use the decedent’s SSN.
- Entering negative income-category totals: Enter zero for a net loss on Section I, Lines 2e, 3c, and 4c. Losses incurred by an estate or trust cannot be distributed.
- Including excluded winnings or gains: Exclude noncash Pennsylvania Lottery prizes. Do not report on Line 3a gains or losses from intangible property, such as stocks and bonds held in trust in a Pennsylvania bank or trust company.
- Leaving out property locations: Every property on PA Schedule E must have an address and location. Otherwise, it will be assumed to be Pennsylvania property.
- Using inconsistent beneficiary amounts: Section II beneficiary income amounts must match Line 1 of each beneficiary’s PA-41 Schedule NRK-1. Section IV withholding amounts must match Line 2.
- Miscalculating percentages: The total on Section II, Line 10A should not exceed 100 percent. When allocating withholding in Section IV, divide percentages as decimals, such as 0.50 for 50 percent.
Questions people ask
What withholding rate does the 2024 schedule use?
Section III, Line 4 multiplies the total nonresident share of distributed or distributable Pennsylvania-source income by 3.07 percent (0.0307).
What if the business or farm operates entirely in Pennsylvania?
Enter 100 percent on Section I, Line 2b. If it operates both inside and outside Pennsylvania, complete Schedule NRH and use the percentage from its Section II, Line 5.
What if there are more than eight nonresident beneficiaries?
Include a statement or additional Schedules N with Sections II and IV completed as applicable. Carry the additional totals to the designated Line 9 entries on the first Schedule N only.
Is there an exception for a withholding amount of $1 or less?
If the amount calculated on Section III, Line 4 is $1 or less and PA-41, Line 10 is zero, enter zero on PA-41, Line 11 and do not complete Section IV.