Instructions For Form Pa-40 Nrc-Ae - Consolidated Personal Income Tax Return (Page 7 of 9) in pdf

CAUTION: An amended PA return may not be filed after the Department issued an assessment if the

amendment relates to the same taxable year and item of income that the Department assessed. A timely

petition for reassessment must be filed, or the assessment must be paid and a timely petition for refund

must be filed. Under PA law, if amounts are paid as a result of an assessment, a Petition Form (Form

REV-65) must be filed no later than six months after the date shown on the assessment.

Underreported Income for Amended Returns

If taxable income was not reported or was erroneously claimed, the error must be corrected within 30

days. File an amended PA return and pay the additional tax, plus penalty and interest.

Penalty and Interest

Penalties for Not Filing or for Filing a Late Return

PA law imposes a penalty if a return is not filed on or before the due date, or the approved extended due

date. The penalty is five percent of the unpaid tax due for each month or fraction of a month. PA law

imposes this penalty unless reasonable cause is shown for the late filing. The maximum penalty is 25

percent. The minimum penalty is $5.00. Because the PA-40 NRC-AE is allowed by the Department for

the convenience of nonresident individuals, the Department retains the discretion to: 1) impose a late

filing and/or underpayment penalty (plus interest) if the consolidated return is filed late and/or the tax is

not timely paid; or, 2) reject a late filed PA-40 NRC-AE, and thus cause all of the nonresident individuals

to incur late filing and possibly underpayment penalties upon filing their individual nonresident personal

income tax returns.

These penalties will not apply on an entity return if there are no nonresident individuals who elect to

participate in the PA-40 NRC-AE for the tax year, all of the nonresident individuals are ineligible to

participate in the PA-40 NRC-AE, or the entity chose not to prepare a PA-40 NRC-AE for the convenience

of its nonresident individual employees. The Department may prosecute any person who attempts to

evade or defeat their PA tax responsibility.

Penalties for Underpayment or for Late Payment

If the full amount of tax due is not paid with a return, PA law imposes a five percent underpayment

penalty.

If taxable income is not reported that is more than 25 percent of the taxable income shown on the return,

PA law imposes an additional penalty. This penalty is 25 percent of the tax due on the unreported

income.

If the underpayment of tax is due to negligence or intentional disregard of rules and regulations, but

without intent to defraud, these penalties will be imposed. The Department may assess both late filing

and underpayment penalty if a return is filed after the due date, or extended due date, and the tax liability

is not paid with the return.

CAUTION: If the return is filed late or the Pennsylvania income tax is not paid on time, the Department

retains the discretion to calculate penalty and interest and issue a notice of assessment. If any part of any

underpayment of the tax is due to fraud, PA law imposes a penalty of 50 percent of the underpayment.

Other Penalties

PA law imposes a $500 penalty for filing a frivolous return. A frivolous return is one that:

•

Does not contain sufficient information for the Department to determine the correct

liability; or

•

Contains information indicating the liability is significantly incorrect; or

•

Indicates that the return is filed in a manner to delay or impede the administration of the

PA tax law.

PA law imposes a penalty on any person/entity required to furnish an information return that does not file

a required information return or files a false or fraudulent information return. The penalty is $250 for each

information return.

Penalty for Uncollectible Funds

PA tax law imposes an additional penalty on funds submitted via check and not paid on presentment or

an electronic funds transfer payment and not credited on transmission. The penalty is 10 percent of the

face amount of the check or electronic funds transfer payment. The penalty imposed cannot exceed

$1,000 nor be less than $25.

Instructions For Form Pa-40 Nrc-Ae - Consolidated Personal Income Tax Return Page 7

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