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the annual deduction that must be

percent allowable for Pennsylvania

LINE 7

taken to recover the cost of business

purposes. However, meals while not

property having a useful life beyond

in overnight traveling status (e.g.

Enter the actual vehicle expenses from

the taxable year. If any of these tools

meals while working late) and federal

federal Form 2106.

or supplies has a useful life of more

per-diem rates for meals and incidental

than one year, depreciate or amortize

expenses are not allowable.

LINE 8

the cost in Part G.

LINE 14

Enter the federal "Inclusion Amount"

LINE 4

since this rule does not apply for PA

Add Lines 6 or 10, and Lines 11, 12,

purposes.

Enter the amount of trade, professional

and 13 and enter the result.

or occupational license fees required

LINE 9

as a condition of employment as well

PART C, MISCELLANEOUS

as any malpractice insurance and

Enter the amount of depreciation

EXPENSES

fidelity bond premiums where required

expense determined for the vehicle.

by law or by the employer.

Any generally accepted depreciation

Enter the description and amount of

method may be used except any of the

all Pennsylvania-allowable expenses

LINE 5

bonus depreciation elections enacted

incurred not required to be listed

for federal purposes. If using a different

elsewhere on PA-40 Schedule UE in

method for Pennsylvania purposes,

Add Lines 1 through 4 and enter the

the space provided. If there are more

enter the method used and the adjusted

result.

than two miscellaneous expenses, a

expense here. If the adjusted basis for

separate statement that itemizes and

determining Pennsylvania depreciation

PART B, BUSINESS

is different than the federal basis, the

describes in detail these expenses

TRAVEL EXPENSES

straight-line depreciation method must

must be provided. Additional examples

be used for determining Pennsylvania

of expenses that may be claimed

LINE 6

depreciation.

include:

● Breakage fees or cash shortages

Enter the amount from federal Form

LINE 10

r e q u i r e d t o b e p a i d t o t h e

2106 or federal Form 2106-EZ. Other-

employer;

wise, enter the total business miles

Add Lines 7, 8, and 9 and enter the

● Fees or income included in Penn-

and multiply by the federal mileage

result.

sylvania-taxable compensation on

allowance to calculate the allowable

Other Business Travel Expenses

Form W-2 that is required to be

business mileage expense.

paid to the employer as a condition

Enter the actual amount of these

CAUTION: Depreciation may not

of employment;

expenses that were incurred.

be claimed on any vehicle on

● Costs incurred by blind employees

CAUTION: Deductible expenses

which the standard mileage rate

to pay readers who assist them in

may not be based upon federal

method is used.

performing their job duties;

per-diem allowances. Only those

Commuting Expenses

expenses actually paid while perform-

● Business gifts that are ordinary,

The costs of public transportation

ing the duties of the employment may

necessary, reasonable, and actually

or driving a car between a home and

be deducted.

incurred for business purposes.

the main place of work may not be

Pennsylvania does not follow

claimed. These are personal commut-

LINE 11

federal percentage limits on such

ing expenses. Commuting expenses

expenses.

may not be deducted no matter how

Enter the amount of parking fees, tolls

CAUTION: Pennsylvania law

far a home is from the regular place

and transportation expenses incurred

does not contain statutory

of work. Commuting costs between

while in an overnight or business travel

employee provisions. If a statutory

different jobs for different employers

status.

employee for federal purposes, the

are also not allowable. For tradesmen,

W-2 income must be claimed as

commuting costs also include mileage

LINE 12

for any job 35 miles or fewer from

compensation on PA-40 Schedule

the closer of the union hall or personal

W-2S and the business expenses on

Enter the amount of hotel or motel

residence to the jobsite.

PA-40 Schedule UE. All other income

accommodation expenses incurred

and expenses should be reported on

while in an overnight travel status.

Vehicle Expenses – Actual

PA-40 Schedule C and Line 4 of the

Pennsylvania does not follow the

LINE 13

PA-40, Personal Income Tax Return. If

federal floor limitations on allowable

applicable, enclose the necessary PA

expenses. Allowable actual vehicle

Schedule C.

Enter only the actual expenses incurred

expenses may always be claimed for

for meals and entertainment expenses.

For more information on statutory

Pennsylvania purposes. Start with

the federal form and adjust for PA

IMPORTANT: Meals and enter-

employees, see Chapter 7 of the PA

purposes.

tainment expenses are 100

PIT Guide.

Form Rev-489 - Instructions For Pa-40 Schedule Ue - Individual Income Tax Return - 2016 Page 4

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