Instructions For Form 37 - The Regional Income Tax Agency (Rita) (Page 5 of 8) in pdf

Line 26 – All Other Taxable Income (or Loss): List all other non-

Schedule J Instructions:

W-2 income such as farm income/loss reported on Federal

Use Schedule J to report net profits or net losses from operating

Schedule F, 1099 miscellaneous income not reported on Federal

a business as a sole proprietor; owning rental property; operating

Schedule C, director fees, and ordinary gains and losses reported

a farm; or from a partnership, S-Corp. or trust.

on Federal Form 4797. Make sure to put the amount earned in each

municipality in the proper columns. Attach schedules detailing all

If you move between one RITA municipality and another, you

amounts reported on this line.

will need to allocate your non-wage income a n d r e p o r t t h a t

a m o u n t o n Schedule J, and provide a separate worksheet

Line

27:

If you had a net operating loss carryforward in your resident

listing effective dates of income allocation.

municipality from Tax Year 2015, place the allowable amount on

this line. There are municipalities that have exceptions to the

What Constitutes Net Profits: Net profits shall be determined

five (5) year loss carryforward rule, see RITA Municipalities

on the basis of the information used for federal income tax

section

for

detailed

municipality

purposes, adjusted to the requirements of the ordinance of a

information.

RITA municipality. Expenses attributable to nontaxable income

are not deductible. Gains and losses from the sale or exchange

Line 28 – Current Year Workplace Income:

of capital assets to the extent recognized as capital gains or

losses for federal income tax purposes are generally not to be

 For Column 1, total Lines 23 through 27.

considered in arriving at net profits.

 For Columns 2 through 6, total Lines 23 through 26.

How to Treat a Net Loss:

Generally, the portion of a net

operating loss sustained in any taxable year, allocable to a

 For Column 7, total Line 28, Columns 1 through 6. Enter the total

RITA municipality, may be applied against the portion of the

on Page 2, Section B, Line 1b. If the total in Column 7 is less

net profit of the succeeding year(s) allocable to the same RITA

than zero, enter -0- on Line 1b.

municipality until exhausted, but in no event for more than five (5)

years.

There are municipalities that have e x c e p t i o n s t o

Line 29 – Workplace Loss Carryforward: If you had a net

t h e five (5) year loss carryforward rule, see RITA

operating loss carryforward in your workplace municipality (the

Municipalities section at for detailed

municipality in which your non-wage income was earned) from Tax

municipality information.

Year 2015, place the allowable amount on this line. NOTE: A net

operating loss carryforward can only offset a gain within the same

No portion of a net operating loss shall be carried back against

workplace municipality. There

are municipalities that have

net profits of any prior year. The portion of a net operating loss

exceptions to the five (5) year loss carryforward rule, see

sustained shall be allocable to a RITA municipality in the same

RITA M u n i c i p a l i t i e s s e c t i o n at

m a n n e r a s p r o v i d e d h e r e i n for allocating net profits to the

for detailed municipality information.

taxing municipality. No portion of a net operating loss shall be

used to offset W-2 income.

Line 30 – Net Taxable Workplace Income: Subtract Line 29 from

Line 28 for Columns 2 through 6. NOTE: Do not complete Lines 31

Line 23: List all income from Federal Schedule C. If you operate

and 32 if the workplace location is a non-RITA municipality.

your business in more than one municipality, you must allocate

your income between each municipality in Columns 1 through

Line 31 – Workplace Tax Rate: If any of the municipalities listed in

6. Attach additional copies of Schedule J if you need more

Columns 2 through 6 are RITA municipalities, enter the tax rate

columns. Also attach a copy of your Federal Schedule C and any

for each RITA municipality on Line 31 as provided in the Tax Table

supporting schedules.

on Pages 7 and 8. If Line 30 is zero or less, do not enter a tax rate.

NOTE: Do not complete Lines 31 and 32 if the workplace location is

Schedule C net profits may not be reduced by any additional

allowable federal deductions, such as one-half self-

a non-RITA municipality.

employment tax.

Line 32 – Municipal Tax Due RITA (Workplace):

Line 24 – Rental Income/Loss: List all rental income/loss from

 If Line 30 is a loss enter -0-, otherwise, multiply Line 30, Columns

Federal Schedule E. Attach a copy of your Federal Schedule E

2 through 6 by the corresponding tax rate on Line 31.

and any supporting schedules.

If you have rental property

located in a RITA m u ni ci pa l i t y , you are considered to be

 If Line 32 is $10.00 or less, enter -0-.

engaged in a business activity and the net income is subject to

tax whether or not you are a resident of a RITA municipality.

 For Column 7: Total Line 32, Columns 2 through 6 and enter on

If you own rental property in more than one municipality,

Page 2, Section B, Line 11.

each municipality should be listed separately in Columns 1-6. If

you own rental property and are a resident of a RITA

NOTE: If you are a resident of a RITA municipality, and your

municipality, you will be subject to the tax on the net income

resident municipality provides a credit for tax paid to other

of such rental regardless of the location of that rental

municipalities, fill out Worksheet L on Form 37, Page 4 to

property.

allocate schedule income/loss and calculate potential credit for

your resident municipality.

Line 25 – Partnership/S-Corporation/Trust Income/Loss: List

all partnership/S-Corp./trust income from Federal Schedule E. If

your business is conducted in more than one municipality, you

must allocate your income/loss in Columns 1 through 6. Attach a

copy of your Federal Schedule E, and any supporting schedules.

S-Corp. distributive shares that do not represent wages are

generally not taxable and should not be reported on

Schedule J (Form 37). There are municipalities that have

e x c e p t i o n s t o t h i s r u l e , see RITA Municipalities section

for detailed municipality information.

Instructions For Form 37 - The Regional Income Tax Agency (Rita) Page 5

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