Instructions For Form Pa-20s/pa-65 - Schedule A - Interest Income

2011

Pennsylvania Department of Revenue

Instructions for PA-20S/PA-65 Schedule A

Interest Income

penalty against other interest

(loss) from the sale, exchange or

General Information

disposition of property;

income. If the total penalty exceeds

●

the interest on an account or

interest incidental to the production

certificate, the entity can report the

of rental or royalty income that the

Purpose of Schedule

excess as a loss on PA-20S/PA-65

entity includes in determining net

Use PA-20S/PA-65 Schedule A to

rent or royalty income;

report interest income of PA S

●

interest that is

Pennsylvania Taxable Interest Income To

corporations, partnerships, estates

statutorily free from

Pennsylvania Resident and Nonresident Owners

and trusts and limited liability

Pennsylvania tax;

companies filing as partnerships or

Type of Interest

Pennsylvania

Nonresident

●

interest derived from

PA S corporations for federal income

(Not allocated to

Resident

assets employed as

tax purposes.

net profits)

Pennsylvania

working capital in a

The entity must report any

Saving or other

Taxable as

Not Taxable

business; and

interest it received for the use of its

bank deposits

Interest

●

interest from

money that it does not include in

Taxable as

accounts and notes

Coupon bonds

Not Taxable

another income class. Do not report

Interest

receivable from sales

interest from obligations that are

Open accounts

Taxable as

Not Taxable

of products or services

statutorily free from Pennsylvania

Interest

sold in the ordinary

tax.

Promissory notes

Taxable as

Not Taxable

course of business

Interest reported on the PA-

Interest

that the entity

20S/PA-65 Information Return and

Mortgages

Taxable as

Not Taxable

includes in

PA-20S/PA-65 Schedule A is total

Interest

determining net profit

interest earned by the entity itself.

Corporate bonds

Taxable as

Not Taxable

(loss) from its

There is no need to distinguish

Interest

business, profession or

between resident and nonresident

Debentures

Taxable as

Not Taxable

farm (generally

portions since interest is not a class

Interest

current assets).

of income on the PA-20S/PA-65

Interest on legacies

Taxable as

Not Taxable

A PA S corporation

Schedule NRK-1. For Pennsylvania

or life insurance

Interest

or partnership cannot

personal income tax purposes,

proceeds

assume that an

nonresidents are not taxed on

Interest on tax

Taxable as

Not Taxable

obligation that is

ordinary interest from Pennsylvania

refunds

Interest

exempt from federal

sources. Interest is ignored by the

Interest on U. S.

Not Taxable

income tax is also

nonresident unless the entity has

obligations - Direct

exempt from

reclassified interest on PA-20S/PA-65

ownership

Pennsylvania personal

Schedule M, Part A and PA-20S/PA-

Interest on other

Taxable as

Not Taxable

income tax. The

65 Schedule A, Line 2 as working

exclusion for U.S. tax-

states’ obligations or

Interest

capital, in which case it will be

political subdivisions

exempt obligations

included with business or rental

does not automatically

Unstated or imputed

Taxable as

Not Taxable

income.

extend to those

interest, including

Interest

Pennsylvania-Taxable

obligations whose sole

government

Interest

statutory basis for

obligations (original

exclusion is the

issue discount)

Pennsylvania law (72 P.S. §

Internal Revenue

GNMA

Taxable as

Not Taxable

7303(a)(6)) provides that interest

Code.

Interest

derived from obligations that are not

The entity may

FNMA

Taxable as

Not Taxable

statutorily free from state or local

only deduct forfeited

Interest

taxation under any other act of the

interest penalties from

PA Commonwealth

General Assembly of the

a premature

and PA Municipal

Not Taxable

Commonwealth of Pennsylvania or

withdrawal of a time

Obligations

under the laws of the U.S. is taxable.

deposit against the

Income reported for

Taxable as

Not Taxable

Include all interest income

interest income from

federal purposes

Interest

except:

that account or

from life insurance,

●

interest derived from purchase

certificate. The PA S

annuities, and

money mortgages on real estate or

corporation or

endowment

land contracts that the entity

partnership cannot

contracts.

includes in determining net gain

offset such interest

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Instructions For Form Pa-20s/pa-65 - Schedule A - Interest Income - 2011

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