Form Pa-40 G-S - Pa Schedule G-S - Calculation Of Credit For Taxes Paid To Other States Or Countries Page 4
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PA SCHEDULE G-S
PA-40 G-S (10-12) (FI)
PA DEPARTMENT OF REVENUE
Individual taxpayers: the amount on Line 4b of each PA
Line 4. Subtract Line 3 from 1.000000. Calculate the
Schedule G-S or G-L should be carried to PA Schedule G-R,
amount to six decimal places.
in Column D on one of Lines 1 through 20.
Line 5. Multiply the amount on Part II, Line 4 by the
amount on Part I, Line 4c. Enter the result here and
Line 4c. Enter the lesser of Line 4a or 4b.
on Part I, Line 4d.
Line 4d. If a taxpayer has more compensation income subject
to tax in the other state or country than in PA (Line 2c, Column
SPECIAL INSTRUCTIONS FOR TAXPAYERS
B is greater than Line 2c, Column A), an adjustment to the
REPORTING AMOUNTS ON PA-40 LINE 10,
amount of tax paid to the other state is required. Subtract
OTHER DEDUCTIONS
Line 2c, Column A from Line 2c Column B, and divide the
For taxpayers with amounts reported on Line 10, Other
result by Line 2c, Column B. Multiply that ratio by the
Deductions, amounts listed in Column A for each line (Lines
amount on Line 4c, and enter the product here.
2c through 2e for Column A) must be reduced by a pro-rata
amount of the deduction attributable to the taxpayer (or
Line 4e. Subtract Line 4d from Line 4c, and enter the result
spouse) claiming the credit.
here.
Example: Andy and Timi Taxpayer have compensation of
Line 5. Multiply Line 3 by 3.07 percent (0.0307) and enter
$90,000 and $94,000 respectively reported on their joint
the result here.
PA-40 return. They do not claim any business expenses on
Line 6. Individual taxpayers must enter the lesser of Line 4e
PA Schedule UE. The Taxpayers also report $6,000 of joint
or Line 5 here and in Column E on one of Lines 1 through 20
interest income and $10,000 of joint dividend income. In addi-
of PA Schedule G-R. Estates and trusts must total the allow-
tion, Andy and Timi’s work requires them to spend 95 percent
able credit from Line 6 of all PA Schedules G-S and/or G-L
of their time in the Delaware offices of their respective
and enter the total on Line 13 of Form PA-41, the fiduciary
employers. The Taxpayers have one child and they contribute
income tax return.
$12,000 each to the IRC Section 529 plan for that child.
Example: Mary has compensation of $400,000 in PA. Mary’s
On their joint tax return, the Taxpayers report a total
employer requires her to work out of the office in
of $200,000 of total PA taxable income on Line 9 of their
Philadelphia as well as at the company’s offices in Dover,
PA-40 return and $24,000 on Line 10. Andy and Timi’s
Delaware. Mary incurs travel expenses and meals and enter-
shares of the income on Line 9 are $98,000 and $102,000,
tainment expenses of $50,000, for which her employer does
respectively. The income by class of income also differs for
not provide reimbursement. Mary pays taxes of $10,500 on
Andy and Timi. Andy’s share of income for each class is as
wages of $360,000 for the time she spends in her company’s
follows: Compensation - $90,000; Interest - $3,000; and
Delaware office. Mary must make an adjustment to her taxes
Dividends - $5,000. Timi’s share of income for each class is
paid to Delaware of $292 ([360,000-350,000]/360,000 x
as follows: Compensation - $94,000; Interest - $3,000; and
10,500 = 292), as the amount she would report on Line 2c,
Dividends - $5,000.
Column B is more than the amount she would report on Line
Andy and Timi would report the following amounts in Column
2c, Column A. Mary would be entitled to a credit of $10,208
A of their separately completed PA Schedules G-S:
for the taxes paid to Delaware. Mary also has investments in
stocks and bonds in several international companies and
Andy
Timi
receives interest and dividend income from those companies.
Line 2c - $78,980
$82,941
Before she receives the interest and dividend income from
Line 2d - $2,633
$2,647
those companies, they are required to withhold the taxes
Line 2e - $4,387
$4,412
that would be due to the country where the companies are
The amounts reported on each line of Column A for Andy and
headquartered. All but one of the foreign countries in which
Timi are reduced by subtracting from the amounts reported in
she has investments in companies levies a tax. Mary can
each class of income on Form PA-40 Andy or Timi’s share of
claim the credit for taxes paid on the interest and dividend
the income from each class of income divided by their respec-
income to the foreign countries on a separately prepared PA
tive shares of the total income for all classes and multiplied by
Schedule G-S. However, Mary must provide with that PA
their respective shares of the amount on Form PA-40 Line 10.
Schedule G-S a statement providing a list of the countries,
For example, Line 2c for Andy was determined by subtracting
amounts of interest and dividend income subject to tax in
from the $90,000 he reported as compensation $11,020,
each country, the tax paid in each country and the amount
which is $90,000 divided by $98,000 times $12,000.
of the resident credit (lesser of 3.07 percent or tax paid) for
The amounts reported in Column B for each of their
each country on a country-by-country basis. Mary may not
Schedules G-S would be as follows:
claim a credit for taxes paid to the country in which her
interest or dividend income was not taxed.
Andy
Timi
Line 2c - $85,500
$89,300
Part II
Line 2d - $0
$0
Instructions for the Worksheet for Adjusted Tax Paid
Line 2e - $0
$0
in Other States or Countries
Because of the respective pro-rata reductions required for
Line 1. Enter the amount from Part I, Column C, Line 3 here.
Column A, the respective amounts for Column C (the lesser
of Column A or Column B) for Andy and Timi are as follows:
Line 2. Add the amounts from Part I, Column B, Lines 2c
through 2e. Enter the result here.
Andy
Timi
Line 2c - $78,980
$82,941
Line 3. Divide the amount on Line 1 by the amount on Line
Line 2d - $0
$0
2. Calculate the amount to six decimal places. If the
Line 2e - $0
$0
result of dividing Line 1 by Line 2 equals 1.000000,
you are not required to make an adjustment to
The total incomes for which credits may be claimed on
taxes. You do not have to complete Lines 4 and 5 of
separate Schedules G-S (Line 3 on the Schedules G-L) are
this section. Stop here and enter a 0 on Part I, Line 4d.
$78,980 for Andy and $82,941 for Timi.
PAGE 4
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