Form PA-40 Schedule G-L "Resident Credit for Taxes Paid" - Pennsylvania

What Is Form PA-40 Schedule G-L?

This is a legal form that was released by the Pennsylvania Department of Revenue - a government authority operating within Pennsylvania.The document is a supplement to Form PA-40, Pa Schedule F - Farm Income and Expenses. As of today, no separate filing guidelines for the form are provided by the issuing department.

Form Details:

  • Released on August 1, 2015;
  • The latest edition provided by the Pennsylvania Department of Revenue;
  • Easy to use and ready to print;
  • Quick to customize;
  • Compatible with most PDF-viewing applications;
  • Fill out the form in our online filing application.

Download a fillable version of Form PA-40 Schedule G-L by clicking the link below or browse more documents and templates provided by the Pennsylvania Department of Revenue.

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Download Form PA-40 Schedule G-L "Resident Credit for Taxes Paid" - Pennsylvania

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1502610056
TO RETURN TO INSTRUCTIONS CLICK HERE
PA SCHEDULE G-L
PA-40 G-L (08-15) (FI)
20
PA DEPARTMENT OF REVENUE
OFFICIAL USE ONLY
Part I - Calculation of Credit for Taxes Paid to Other States
START
Name of taxpayer claiming the credit
Social Security Number
1. Name of other state
Fill in the oval if the credit you are claiming on this schedule is listed on a
PA Schedule RK-1 or consolidated return. Otherwise, include a copy of the
other state’s return.
A
B
C
Amount of income
Amount of income
Lesser of
2. Class of income subject to tax
subject to tax in
subject to tax in the
Column A or B
in the other state
PA per PA-40 return
other state
a. Compensation
b. Unreimbursed business expenses
c. Net compensation
d. Interest
e. Dividends
f. Net income or loss from business, profession or farm
g. Gain or loss from sale, exchange or disposition of property
h. Income or Loss from rents, royalties, patents and copyrights
i. Estate or trust income
j. Gambling and lottery winnings
3. Income subject to tax in the other state - Add Lines 2c thru 2j for Column C. Enter the result here.
4. a. Tax due or assessed in the other state
b. Tax paid in the other state
c. Enter the lesser of Line 4a or Line 4b
d. Less: adjustments - Enter the amount from Part III, Line 5.
e. Adjusted tax paid in the other state - Subtract Line 4d from Line 4c. Enter the result here.
5. Line 3 x 3.07 percent (0.0307)
6. PA Resident Credit. Enter the lesser of Line 4e or Line 5 here and on the appropriate form (see instructions).
Part II - Worksheet for Sources and Amounts of Income Subject to Tax in the Other State
A
B
C
D
E
1. Source entity name
TOTALS
2. Income by class
Compensation
Interest
Dividends
Net income or loss from
business, profession or farm
Gain or loss from sale, exchange
or disposition of property
Income or loss from rents,
royalties, patents and copyrights
Estate or trust income
Gambling and lottery winnings
Part III - Worksheet for Adjusted Tax Paid in the Other State
1. Enter the amount from Part I, Column C, Line 3 here.
2. Add the amounts from Part I, Column B, Lines 2c through 2j. Enter the result here.
3. Divide the amount from Part III, Line 1 by Part III, Line 2. Enter the result here (calculate to six decimal places).
.
If the amount on Part III, Line 3 equals 1.000000, you may stop here and enter “0” on Part I, Line 4d.
4. If the amount on Part III, Line 3 is less than 1.000000, subtract the decimal from 1.000000.
Enter the result here (calculate to six decimal places).
.
5. Multiply the decimal on Part III, Line 4 by the amount on Part I, Line 4c.
Enter the result here and on Part I, Line 4d.
RETURN TO TOP
Reset Entire Form
PRINT FORM
1502610056
1502610056
1502610056
TO RETURN TO INSTRUCTIONS CLICK HERE
PA SCHEDULE G-L
PA-40 G-L (08-15) (FI)
20
PA DEPARTMENT OF REVENUE
OFFICIAL USE ONLY
Part I - Calculation of Credit for Taxes Paid to Other States
START
Name of taxpayer claiming the credit
Social Security Number
1. Name of other state
Fill in the oval if the credit you are claiming on this schedule is listed on a
PA Schedule RK-1 or consolidated return. Otherwise, include a copy of the
other state’s return.
A
B
C
Amount of income
Amount of income
Lesser of
2. Class of income subject to tax
subject to tax in
subject to tax in the
Column A or B
in the other state
PA per PA-40 return
other state
a. Compensation
b. Unreimbursed business expenses
c. Net compensation
d. Interest
e. Dividends
f. Net income or loss from business, profession or farm
g. Gain or loss from sale, exchange or disposition of property
h. Income or Loss from rents, royalties, patents and copyrights
i. Estate or trust income
j. Gambling and lottery winnings
3. Income subject to tax in the other state - Add Lines 2c thru 2j for Column C. Enter the result here.
4. a. Tax due or assessed in the other state
b. Tax paid in the other state
c. Enter the lesser of Line 4a or Line 4b
d. Less: adjustments - Enter the amount from Part III, Line 5.
e. Adjusted tax paid in the other state - Subtract Line 4d from Line 4c. Enter the result here.
5. Line 3 x 3.07 percent (0.0307)
6. PA Resident Credit. Enter the lesser of Line 4e or Line 5 here and on the appropriate form (see instructions).
Part II - Worksheet for Sources and Amounts of Income Subject to Tax in the Other State
A
B
C
D
E
1. Source entity name
TOTALS
2. Income by class
Compensation
Interest
Dividends
Net income or loss from
business, profession or farm
Gain or loss from sale, exchange
or disposition of property
Income or loss from rents,
royalties, patents and copyrights
Estate or trust income
Gambling and lottery winnings
Part III - Worksheet for Adjusted Tax Paid in the Other State
1. Enter the amount from Part I, Column C, Line 3 here.
2. Add the amounts from Part I, Column B, Lines 2c through 2j. Enter the result here.
3. Divide the amount from Part III, Line 1 by Part III, Line 2. Enter the result here (calculate to six decimal places).
.
If the amount on Part III, Line 3 equals 1.000000, you may stop here and enter “0” on Part I, Line 4d.
4. If the amount on Part III, Line 3 is less than 1.000000, subtract the decimal from 1.000000.
Enter the result here (calculate to six decimal places).
.
5. Multiply the decimal on Part III, Line 4 by the amount on Part I, Line 4c.
Enter the result here and on Part I, Line 4d.
RETURN TO TOP
Reset Entire Form
PRINT FORM
1502610056
1502610056
Return To Form
PA-40 G-L (08-15) (FI)
PA Schedule G-L Resident Credit for Taxes Paid Instructions
PA DEPARTMENT OF REVENUE
A Pennsylvania resident can receive a credit for income tax, wage tax or
statement that must be used or included as the statement provided to
partners, members or shareholders who receive resident credits reported
other tax (measured by gross or net earned or unearned income) paid to
another state when the other state imposes its tax on income also subject
on Line 8 of PA Schedule RK-1. The amount of resident credit calculated
to PA personal income tax in the same taxable year. For example, a PA
on a PA Schedule G-L or PA Schedules G-L for a PA S corporation must
match the amounts reported on PA Schedule RK-1 for that owner.
resident who earns wages in Delaware and pays Delaware income tax can
claim a credit (subject to the limitations described below) for the tax
NOTE: If you use PA Schedule W-2S to report compensation and you
imposed by Delaware on his/her compensation.
claim a resident credit for taxes paid to another state on compensation,
you must include copies of any Forms W-2 for the compensation subject
PA Schedule G-L is intended for use by a taxpayer who has income in any
to tax in the other states.
class of income that is also subject to tax in any other state. However, no
item of Pennsylvania taxable income can be taxable in more than one
CAUTIONS: If claiming a resident credit from more than one state, you
other state. For example, you cannot have the same item of gain from the
must file a separate PA Schedule G-L for each state. Individual taxpayers
sale exchange or disposition of property taxable in Pennsylvania, New
must total the amount of allowable credit from Line 6 of all PA Schedules
York and Delaware and be eligible to file PA Schedule G-L for New York and
G-L and enter the total on Line 22 of Form PA-40, Personal Income Tax
Delaware. The property can only be subject to tax in the state of residency
Return. Estates and trusts must total the allowable credit from Line 6 of
(PA) and one other state, unless the property has its source in PA and in
all PA Schedules G-L and enter the total on Line 15 of Form PA-41,
which case it can only be subject to tax in PA.
Fiduciary Income Tax Return.
Individual taxpayers must total the allowable credit from Line 6 of all
You may not claim a resident credit on an individual return for taxes paid
Schedules G-L and enter the amount on Line 22 of Form PA-40, Personal
by an estate or trust. The credit for taxes paid on behalf of an estate or
Income Tax Return.
trust must be claimed on the fiduciary return for the estate or trust. If all
the income from the estate or trust is distributed to an individual who is a
Estates and trusts must total the allowable credit from Line 6 of all PA
beneficiary of the estate or trust, the individual may not claim the resident
Schedules G-L and enter the amount on Line 15 of Form PA-41, Fiduciary
credit earned by the estate or trust.
Income Tax Return.
Individual taxpayers who complete multiple Schedules G-L must add the
GENERAL INSTRUCTIONS
income amounts subject to tax in each of the states for each class of
If you can claim a resident credit as described above, your credit is the
income and verify that income does not exceed the PA taxable income
lesser amount of:
amount for each class of income. In addition, if there are multiple states
• The tax due to the other state (as may be adjusted), or
to which income is subject to tax from the same entity or source, the total
income subject to tax in the other states for that entity cannot exceed the
• The tax calculated using the PA classified taxable income that you
total income from that entity less the PA-source income amount from that
earned, received or realized in the other state multiplied by the
entity.
Pennsylvania tax rate of 3.07 percent (0.0307).
Examples:
If you complete PA Schedule G-L, you are required to submit some or all
A PA resident trust taxpayer is an owner in two S corporations (A & B)
of the following as appropriate:
doing business in Pennsylvania and Maryland. S corporation A had net
1. Copies of the income tax returns that you filed with the other states.
business income of $200,000 that it passed through to the trust while S
2. A copy of each Form W-2 (if available) that shows any compensation
corporation B had a net business loss of ($100,000) that it passed through
that the other states taxed (or a statement that shows how the
to the trust resulting in net taxable business income to the trust of
compensation in the other states was determined).
$100,000. Although the trust had net income to PA of $100,000, the trust
had net income of $125,000 that it paid tax on in Maryland. The income
3. Copies of the PA Schedule RK-1, showing the amount of resident
passed through as Maryland-source income from S corporation A was
credit passed through to the shareholder along with the statement
$150,000 while S corporation B only had a net loss in Maryland of
showing the shareholder’s proportionate share of the income and
($25,000). The trust can only claim a resident credit to Maryland of
tax paid for each state. See the instructions for PA S corporations,
$3,070 on the $100,000 of total PA business income.
partnerships and limited liability companies filing returns on behalf
A PA resident individual taxpayer is an owner in a partnership which has
of shareholders, partners and members for more information.
$100,000 of total income. The partnership has operations in Delaware,
4. A copy of a statement from the partnership or limited liability
Maryland, New Jersey, New York and Pennsylvania. The income subject to
company (entity) setting forth the amounts of income (by class)
tax in each state is as follows: Delaware $20,000; Maryland $21,000;
subject to tax in the other states, along with the amount of tax paid
New Jersey $22,000; and New York $22,000. The PA-source income from
to such states. See the instructions for PA S corporations, partner-
the partnership is $20,000. Because the income subject tax in the other
ships and limited liability companies filing returns on behalf of
states exceeds $80,000, the resident credit must be adjusted for at least
shareholders, partners and members for more information.
one state so that the total income subject to tax in all the states (except
5. Copies of the other state’s commercial domicile rule, law or regulations
PA) does not exceed $80,000.
if interest and/or dividend income is claimed as income subject to
PA income tax law does not allow a resident credit for taxes paid to polit-
tax in another state.
ical subdivisions of other states. Ask your local taxing authority if you are
The worksheets from Part II of the PA Schedule G-L showing the nature
eligible for a credit for the tax paid to a political subdivision outside
(class) of the income subject to tax in the other state(s) by the source
Pennsylvania or the difference between the tax you paid to another state
(entity or transaction) of the income must also be completed in order to
and the credit you claimed on your PA Schedule G-L.
claim the credit. Returns for the other states do not need to be signed.
SPECIFIC INSTRUCTIONS
You may be required at a later date to provide additional documentation
Part I
to the department such as (but not limited to) checks, money orders and
Instructions for Calculation of Credit for Taxes Paid to Other States
other related documents in order to substantiate income taxes paid or the
Enter the name of the taxpayer or spouse who is claiming the credit.
amount of tax reported to other states as due and payable.
Taxpayers using the “Married Filing Jointly” status may not claim the credit
PA S corporations, partnerships and limited liability companies
on a joint basis for any classes of income. Separate PA Schedules G-L must
filing returns on behalf of shareholders, partners and members.
be prepared to report the income for a taxpayer and spouse for all classes
If you are a PA S corporation, partnership or limited liability company
of income represented on PA Schedule G-L. Enter the Social Security
(entity) that filed an entity return with another state for income tax to be
number of the taxpayer or spouse as appropriate.
paid on behalf of the shareholder, partner or member (owner), you must
IMPORTANT: When using fractions or ratios to determine amounts for
provide additional information to the owner. The additional information
this schedule, calculate out to six decimal places. Also see “Special
should be provided on a statement separate from the PA Schedule RK-1
Instructions for Taxpayers Reporting Amounts on PA-40 Line 10, Other
for the entity. The statement will include the owner’s name, Social Security
Deductions” on Page 4 of these instructions.
number, name of the entity, tax or fiscal year for which the information is
Line 1.
provided, along with a summary, in proportion to the owner’s share of
Enter the name of the other state to which you owed or paid income tax.
ownership (or other method for determining the owner’s share of profits,
A separate PA Schedule G-L should be filed for each state in which you
losses, gains or credits) in the entity, the amount of taxes paid to other
claim a resident credit. Do not enter Pennsylvania.
states and the class or classes of income that are subject to tax in those
other states. See the Statement of Resident Credits for Owners of Pass
If the credit claimed for a state is listed as part of the credit shown on
Through Entities included after these instructions for a sample of the
Line 8 of an S corporation PA Schedule RK-1, fill in the oval. Also fill in the
PAGE 1
Return To Form
PA-40 G-L (08-15) (FI)
PA Schedule G-L Resident Credit for Taxes Paid Instructions
PA DEPARTMENT OF REVENUE
oval if the credit being claimed for a state is listed as part of the credit
NET INCOME FROM THE OPERATION OF A BUSINESS, PROFESSION
on a separate schedule or listing as a partnership or limited liability
OR FARM
company. You must enter all other data as required by the instructions
Line 2f.
and the name of the entity in Part II of the PA Schedule G-L.
Column A. If you are claiming a credit as a result of net income from the
operation of a business, profession or farm subject to tax in another state,
COMPENSATION
enter the amount from PA-40 Line 4. Although a taxpayer and spouse may
Line 2a.
file a joint return, they must complete separate PA Schedules G-L and
Column A. If a taxpayer or spouse has compensation subject to tax in
report only the income attributable to the name at the top of the PA
another state, enter the amount of gross compensation subject to tax for
Schedule G-L.
the taxpayer or spouse in PA from Line 1a of the PA-40. Otherwise, leave
Column B. If you have net income from the operation of a business,
this line blank.
profession or farm subject to tax in another state, enter the amount of
Column B. If a taxpayer has income subject to tax in another state, enter
income from the other state’s return. Do not reverse the other state’s
the amount of gross compensation subject to tax in the other state from
adjustments to income as a result of its allowance of additional deductions
the other state’s return. Include a copy of Form W-2 and/or other
or expenses. In order to determine if the credit is allowable, taxpayers
documentation supporting the position that compensation is subject to tax
and their spouses must complete the worksheet in Part II to show the
in the other state. If Form W-2 shows an amount different than the
sources and amounts of income subject to tax for each state and source,
amount of compensation reported on the return as taxable to the other
even if from only one source. If any entity (PA Schedule C, partnership,
state, include a copy of the other state’s apportionment schedule or a
limited liability company, S-corp, joint venture) was jointly owned, enter
copy of a supplementary statement illustrating how the compensation
only the taxpayer’s or spouse’s portion of the income from the operation
subject to tax on the return for the other state was determined. If the
of a business, profession or farm subject to tax in the other state. To claim
amount of compensation shown on the W-2 is greater than the amount of
the credit for the spouse, you must file a separate PA Schedule G-L.
compensation reported as subject to tax on the return for the other state,
Column C. Compare Column A with Column B and enter the lesser of the
you must use the amount reported on the return.
two amounts here. If either amount is a (loss), enter zero in Column C.
UNREIMBURSED BUSINESS EXPENSES
If you have other income or losses from the operation of a business,
Line 2b.
profession or farm that result in a net loss or that reduce your income in
Column A. If Line 2a, Column A, is completed and the taxpayer or spouse
PA to an amount less than that subject to tax in the other state, the
claimed unreimbursed business expenses, enter the amount of unreim-
amount of credit can only be calculated on the amount of income subject
bursed business expenses from Line 1b of the PA-40. Enter only the
to tax in PA. A taxpayer or spouse cannot claim more income from the
unreimbursed business attributable to the name at the top of the PA
operation of a business, profession or farm subject to tax in other states
Schedule G-L. Otherwise leave this line blank.
than each has separately subject to tax in PA. If more than one PA
Schedule G-L reports income from the operation of a business, profession
Column B. No entry is required.
or farm subject to tax in more than one other state, you must add the
Column C. No entry is required.
amounts of income subject to tax in the other states for each and compare
that amount to the income subject to tax in PA. If the total of Line 2f,
NET COMPENSATION
Column B for all states exceeds the amount included in Line 4 of the PA-40
Line 2c.
for the name of the person shown on the top of the Schedule G-L, you
Column A. Subtract Line 2b from Line 2a. Enter the result here.
must make an adjustment to the amount reported on Line 2f, Column C
Column B. Enter the amount from Line 2a.
for one of the states so that the total does not exceed the amount subject
Column C. Compare Column A with Column B and enter the lesser of the
to tax in PA for either the taxpayer or spouse. If you have made an adjust-
two amounts here. A taxpayer or spouse cannot claim more compensation
ment to income as a result of excess income from the operation of a
subject to tax in other states than each has separately subject to tax in
business, profession or farm subject to tax in other states, you must see
PA. If more than one PA Schedule G-L reports compensation subject to tax
the instructions for and complete, Line 4d.
in more than one other state for a taxpayer or spouse, you must add the
GAIN FROM THE SALE, EXCHANGE OR DISPOSITION OF PROPERTY
amounts subject to tax in the other states for each and compare that
Line 2g.
amount to the amount of compensation subject to tax in PA. If the total of
Column A. If you are claiming a credit as a result of a gain from the sale,
Line 2c, Column B for all states exceeds the amount in Line 1c of the PA-40
exchange or disposition of tangible property subject to tax in another
for the name of the person shown on the top of the Schedule G-L, you
state, enter the amount from PA-40 Line 5. Although a taxpayer and
must make an adjustment to the amount reported on Line 2c, Column C
spouse may file a joint return, they must complete separate PA Schedules
for one of the states so that the total does not exceed the amount
G-L and report only those gains attributable to the name at the top of the
subject to tax in PA. If you have made an adjustment as a result of excess
PA Schedule G-L.
compensation subject to tax in other states, you must see the instructions
for and complete, Line 4d.
Column B. If you have a gain from the sale, exchange or disposition of
tangible property subject to tax in another state, enter the amount of gain
INTEREST AND DIVIDENDS
from the other state’s return. Do not reverse the other state’s adjust-
Lines 2d and 2e.
ments to income as a result of its allowance of additional deductions or
Column A. Federal law prohibits states from taxing nonresidents on
expenses. In order to determine if the credit is allowable, you must also
intangible income such as interest and dividend income. However, some
complete the worksheet in Part II to show the sources and amounts of the
states have a commercial domicile rule which permits them to allocate
income subject to tax for each state and source, even if from only one
intangible income to their state if the business has operations located in
source. If the property sold was jointly owned, enter only the taxpayer’s
the state. Therefore, unless the state listed on Line 1 has the commercial
or spouse’s portion of the gain subject to tax in the other state. To claim
domicile rule, you cannot claim a resident credit for taxes paid to another
the credit for the spouse, you must file a separate PA Schedule G-L.
state for interest and dividend income. If you have interest or dividend
Column C. Compare Column A with Column B and enter the lesser of the
income earned by a business or rental property that is subject to tax in
two amounts here. If either amount is a (loss), enter zero in Column C. If
another state, that interest or dividend income must be classified as Net
you have other gains or losses from sales of other tangible or intangible
Income or Loss from the Operation of a Business, Profession, or Farm or
property that result in a net loss or that reduce your income in PA to an
as Net Income or Loss from Rents, Royalties, Patents and Copyrights in
amount less than that subject to tax in the other state, the amount of
PA to be able to claim a resident credit on that income. See the PA PIT
credit can only be calculated on the amount of income subject to tax in
Guide, Chapter 11, Section I, 3, for additional information regarding the
PA. A taxpayer or spouse cannot claim more income from the sale,
Allocation of Noncommercial Interest, Noncommercial Dividends, and Gain
exchange or disposition of property subject to tax in other states than
to Net Income or Loss from the Operation of a Business, Profession or Farm.
each has separately subject to tax in PA. If more than one PA Schedule
Column B. If the other state has the commercial domicile rule, enter the
G-L reports income from the sale, exchange or disposition of property
amount of interest and dividend income subject to tax in the other state.
subject to tax in more than one other state, you must add the amounts
Documentation supporting the other state’s regulations or laws regarding
of income subject to tax in the other states for each and compare that
the commercial domicile rule must be provided in addition to the other
amount to the income subject to tax in PA. If the total of Line 2g, Column
state’s return.
B for all states exceeds the amount included in Line 5 of the PA-40 for the
Column C. Compare the amounts from Columns A and B. Enter the lesser
name of the person shown on the top of the Schedule G-L, you must make
of the two amounts here.
an adjustment to the amount reported on Line 2g, Column C for one of
PAGE 2
Return To Form
PA-40 G-L (08-15) (FI)
PA Schedule G-L Resident Credit for Taxes Paid Instructions
PA DEPARTMENT OF REVENUE
the states so that the total does not exceed the amount subject to tax in
taxpayer and spouse may file a joint return, they must complete separate
Schedules G-L and report only the income attributable to the name at the
PA for either the taxpayer or spouse. If you have made an adjustment to
income as a result of excess income from the sale, exchange or disposition
top of the PA Schedule G-L.
of property being subject to tax in other states, you must see the
Column B. If you have income from gambling and lottery winnings subject
instructions for and complete, Line 4d.
to tax in another state, enter the amount of income from the other state’s
return. Do not reverse the other state’s adjustments to income as a result
INCOME FROM RENTS, ROYALTIES, PATENTS OR COPYRIGHTS
of its allowance of additional deductions or expenses. In order to deter-
Line 2h.
mine if the credit is allowable, taxpayers and their spouses must complete
Column A. If you have income from rents, royalties, patents or copyrights
the worksheet in Part II to show the sources and amounts of the income
subject to tax in another state, enter the amount from PA-40 Line 6.
subject to tax for each state and source, even if from only one source. A
Although a taxpayer and spouse may file a joint return, they must complete
taxpayer and spouse must report their gambling and lottery winnings
separate Schedules G-L and report only the income attributable to the
income and taxes paid to other states on such income on separate PA
name at the top of the PA Schedule G-L.
Schedule G-L forms. To claim the credit for a spouse, you must file a
Column B. If you have income from rents, royalties, patents or copyrights
separate PA Schedule G-L.
subject to tax in another state, enter the amount of income from the other
Column C. Compare Column A with Column B and enter the lesser of the
state’s return. Do not reverse the other state’s adjustments to income as
two amounts here. If either amount is a (loss), enter zero in Column C. If
a result of its allowance of additional deductions or expenses. In order to
you have other income or losses from gambling activities that result in a
determine if the credit is allowable, taxpayers and their spouses must
net loss or that reduce your income in PA to an amount less than that
complete the worksheet in Part II to show the sources and amounts of the
subject to tax in the other state, the amount of credit can only be calcu-
income subject to tax for each state and source, even if from only one
lated on the amount of income subject to tax in PA. A taxpayer or spouse
source. If the entity (rental property, partnership, limited liability company,
cannot claim more gambling or lottery winnings subject to tax in other
S-corp, joint venture) from which the income is reported was jointly
states than each has separately subject to tax in PA. If more than one PA
owned, enter only the taxpayer’s or spouse’s portion of the income subject
Schedule G-L reports gambling or lottery winnings subject to tax in more
to tax in the other state. To claim the credit for the spouse, you must file
than one other state, you must add the amounts of income subject to tax in
a separate PA Schedule G-L.
the other states for each and compare that amount to the income subject
Column C. Compare Column A with Column B and enter the lesser of the
to tax in PA. If the total of Line 2j, Column B for all states exceeds the
two amounts here. If either amount is a (loss), enter zero in Column C. If
amount included in Line 8 of the PA-40 for the name of the person shown
you have other income or losses from rents, royalties, patents or copyrights
on the top of the Schedule G-L, you must make an adjustment to the
that result in a net loss or that reduce your income in PA to an amount
amount reported on Line 2j, Column C for one of the states so that the
less than that subject to tax in the other state, the amount of credit can
total does not exceed the amount subject to tax in PA for either the
only be calculated on the amount of income subject to tax in PA. A
taxpayer or spouse. If you have made an adjustment to income as a result
taxpayer or spouse cannot claim more income from rents, royalties,
of excess gambling and lottery winnings being subject to tax in other
patents or copyrights subject to tax in other states than each has
states, you must see the instructions for and complete, Line 4d.
separately subject to tax in PA. If more than one PA Schedule G-L reports
NOTE: Individual taxpayers must total the amount of allowable credit
income from rents, royalties, patents or copyrights subject to tax in more
from Line 6 of all PA Schedules G-L and enter the amount on Line 22 of
than one other state, you must add the amounts of income subject to tax
Form PA-40, Personal Income Tax Return. Estates and trusts must total
in the other states for each and compare that amount to the income subject
the allowable credit from Line 6 of all PA Schedules G-L and enter the total
to tax in PA. If the total of Line 2h, Column B for all states exceeds the
on Line 15 of Form PA-41, Fiduciary Income Tax Return.
amount included in Line 6 of the PA-40 for the name of the person shown
on the top of the Schedule G-L, you must make an adjustment to the
Line 3. Add the amounts on Lines 2c thru 2j for Column C and enter the
amount reported on Line 2h, Column C for one of the states so that the
result here. If you have amounts on Lines 2d and/or 2e for Column C, you
total does not exceed the amount subject to tax in PA for either the
must also include copies of the other state’s commercial domicile rule (law
taxpayer or spouse. If you have made an adjustment to income as a result
or regulations) in order to claim a resident credit for interest and dividend
of excess income from rents, royalties, patents or copyrights being subject
income taxed in another state.
to tax in other states, you must see the instructions for and complete,
Line 4a. Enter the amount of income tax reported to the other state as due
Line 4d.
and payable before any credits for taxes withheld, estimated tax payments
or other payments are taken into account. This amount is generally the tax
ESTATE OR TRUST INCOME
liability as determined on the other state’s return. However, any special
Line 2i.
tax credits awarded or claimed must be used to reduce this amount.
Column A. If you have estate or trust income subject to tax in another
state, enter the amount from PA-40 Line 7. Although a taxpayer and
Line 4b. Enter the amount of income tax actually paid to the other state
spouse may file a joint return, they must complete separate PA Schedules
in the form of estimated taxes, withholding taxes, extension payments
G-L and report only the income attributable to the name at the top of the
and other payments (additional assessments of taxes). Other payments
PA Schedule G-L.
include payments that you intend to make with the filing of the return if
there is a balance due after the application of estimated taxes, withholding
Column B. If you have estate or trust income subject to tax in another
taxes and extension payments. If you do not make the payment of taxes
state, enter the amount of income from the other state’s return. Do not
due with the return or do not intend to make the payment, do not include
reverse the other state’s adjustments to income as a result of its
the balance due on the return with this amount.
allowance of additional deductions or expenses. In order to determine if
the credit is allowable, taxpayers and their spouses must complete the
Line 4c. Enter the lesser of Line 4a or 4b.
worksheet in Part II to show the sources and amounts of the income
Line 4d. If a taxpayer has more income subject to tax in the other state
subject to tax for each state and trust, even if from only one trust. If the
than in one or more of the PA classes of income or the combined income
trust from which the income is reported was jointly owned, enter only the
subject to tax in all the states in which there is income subject to tax is
taxpayer’s or spouse’s portion of the income subject to tax in the other
greater than the income subject to tax in one or more PA classes of
state. To claim the credit for the spouse, you must file a separate PA
income, an adjustment to the amount of tax paid to the other state is
Schedule G-L.
required. Also, if another state had income on which there was no tax paid
Column C. Compare Column A with Column B and enter the lesser of the
in Pennsylvania or on which the amount of income subject to tax in
two amounts here.
Pennsylvania was reduced due to other losses that were not permitted or
attributable to the other state, an adjustment would be required to reduce
CAUTION: If the trust in which you are a beneficiary is required to file a
the amount of tax paid to the other state to reflect the proportionate tax
return for another state and include the income as the trust’s income
paid on the income subject to tax in both states. For example, if the
rather than the beneficiary’s income, you cannot claim a credit for the
income subject to tax in the other state for net income from a business,
income taxes paid by the trust on your personal income tax return. The
profession or farm is more than the amount of the PA-40 net income from
credit can only be claimed on a PA resident trust tax return.
a business, profession, or farm (Line 2f, Column B is more than Line 2f,
GAMBLING AND LOTTERY WINNINGS
Column A), an adjustment is required for Line 4c. Complete the
Line 2j.
Worksheet for Adjusted Tax Paid in the Other State in Part III of the PA
Column A. If you have income from gambling and lottery winnings subject
Schedule G-L to determine the amount of adjustment required to taxes.
to tax in another state, enter the amount from PA-40 Line 8. Although a
Enter the amount from Part III, Line 5.
PAGE 3
Return To Form
PA-40 G-L (08-15) (FI)
PA Schedule G-L Resident Credit for Taxes Paid Instructions
PA DEPARTMENT OF REVENUE
Line 4e. Subtract Line 4d from Line 4c. Enter the result here.
You do not have to complete Lines 4 and 5 of this section. Stop here and
enter “0” on Part I, Line 4d.
Line 5. Multiply Line 3 by 3.07 percent (0.0307). Enter the result here.
Line 4. Subtract Line 3 from 1.000000. Calculate the amount to six
Line 6. Enter the lesser of Line 4e or Line 5 here. Individual taxpayers
decimal places.
must total the amount of allowable credit from Line 6 of all PA Schedules
G-L and enter the amount on Line 22 of Form PA-40, Personal Income Tax
Line 5. Multiply the amount on Part III, Line 4 by the amount on Part I,
Return. Estates and trusts must total the allowable credit from Line 6 of
Line 4c. Enter the result here and on Part I, Line 4d.
all PA Schedules G-L and enter the amount on Line 15 of Form PA-41,
Fiduciary Income Tax Return.
SPECIAL INSTRUCTIONS FOR TAXPAYERS REPORTING AMOUNTS
ON PA-40 LINE 10, OTHER DEDUCTIONS
Example: Mary has compensation of $210,000 in PA. She claims $40,000
For taxpayers with amounts reported on Line 10, Other Deductions,
of unreimbursed business expenses in PA. She also belongs to an employer
amounts listed in Column A for Lines 2c through 2j must be reduced
-sponsored retirement or 401k plan and contributes $10,000 to the plan.
Mary also has three rental properties on which she reports income and
accordingly by a pro-rata amount of the deduction attributable to the
losses. She reports income from Property A of $50,000, a loss on Property B
taxpayer or spouse claiming the credit.
of ($80,000) and income from Property C of $50,000. Her net income
Example: Andy and Timi Taxpayer have compensation of $40,000 and
or loss from rents, royalties, patents and copyrights in PA is therefore
$44,000, respectively, reported on their joint PA-40 return. They do not
$20,000. Mary’s regular work duties require her to be in Kentucky 90
claim any business expenses on PA Schedule UE. The Taxpayers also
percent of the time. Property C is also located in Kentucky, while
report $3,000 of joint interest income, $5,000 of joint dividend income
Properties A and B are located in PA. On Mary’s Kentucky tax return, she
and $4,000 of gains from the sale, exchange or disposition of property
includes a total of $230,000 of income [$180,000 (total PA compensation
(gains) from a vacation property in Delaware they jointly owned. In
less 401k plan contribution x 90 percent) of compensation and $50,000
addition, Andy has $4,000 of income from a rental property he owns by
of rental income] and pays tax of $6,500. Mary is permitted to report only
himself, which is also located in Delaware. Furthermore, Andy and Timi’s
$170,000 on line 2c, Column C of her PA Schedule G-L ($210,000 PA
Gross Compensation minus $40,000 UE expenses). Furthermore, she is
work requires them to spend 80 percent of their time in the Delaware
permitted to show only $20,000 of rental income on Line 2h, Column C
offices of their respective employers. Andy and Timi have one child, and
(net PA rental income). Mary must also make proportionate adjustments in
they contribute $14,000 each to the IRC Section 529 plan for that child.
the amount of taxes paid to account for these reductions. The adjustment
On their joint tax return, the Taxpayers report a total of $100,000 of total
to taxes would be determined by taking the total of Part 1 Column C, Line 3
PA taxable income on Line 9 of their PA-40 return and $28,000 on Line 10.
($190,000) and dividing it by Part 1, Column B Lines 2c through 2j
Andy and Timi’s shares of the income on Line 9 are both $50,000.
($230,000). This fraction is then subtracted from 1.000000 and the result
However, the income by class of income differs for Andy and Timi. Andy’s
is multiplied by the tax paid to arrive at the adjustment to taxes.
share of income for each class is as follows: Compensation - $40,000;
Therefore, the proportionate reduction or adjustment in taxes required
Interest - $1,500; Dividends - $2,500; Gains - $2,000; and Rents -
would be $1,130 [(1.00000 minus $190,000/$230,000) or 0.173913
$4,000. Timi’s share of income for each class is as follows: Compensation
times $6,500 = $1,130]. Her Kentucky PA Schedule G-L Line 3 would
show $190,000 of income subject to tax in both states, which is made up
- $44,000; Interest - $1,500; Dividends - $2,500; Gains - $2,000; and
of $170,000 of compensation (the maximum amount on which a credit can
Rents - $0.
be claimed due to the reduction in PA income as a result of unreimbursed
Andy and Timi would report the following amounts in Column A of their
business expenses) and $20,000 of rental income (the maximum amount
separately completed PA Schedules G-L:
on which a credit can be claimed due to the net loss on PA properties not
Andy
Timi
allowable in Kentucky). PA Schedule G-L Lines 4a, 4b and 4c would show
$6,500. Lines 4d and 4e would show $1,130 and $5,370, respectively.
Line 2c - $28,800
$31,680
Line 5 of PA Schedule G-L would show $5,833 ($190,000 times 3.07
Line 2d - $ 1,080
$ 1,080
percent = $5,833). Line 6 is limited to the lesser of Lines 4e or Line 5 and
Line 2e - $ 1,800
$ 1,800
would be $5,370. The maximum resident credit Mary could claim for
Line 2g - $ 1,440
$ 1,440
Kentucky would be $5,370.
Line 2h - $ 2,880
$
0
Part II
The amounts reported on each line of Column A for Andy and Timi are
Instructions for the Worksheet for Sources and Amounts of Income
reduced by subtracting from the amounts reported in each class of income
Subject to Tax in the Other State
on Form PA-40 Andy or Timi’s share of the income from each class of
Line 1. Enter the name of the company, partnership, limited liability
income, divided by their respective shares of the total income for all classes
company, S corporation, rental property, trust, casino or gambling operation
and multiplied by their respective shares of the total amount on Form
(collectively henceforth known as source) for each source having income
PA-40 Line 10. For example, Line 2c for Andy was determined by taking
or loss attributable to the state shown on Part I, Line 1. Include the name
the $40,000 he reported as compensation and subtracting $11,200, which
of a separate source in Columns A thru D. Include additional worksheets
is $40,000 divided by $50,000 times $14,000.
if additional columns are needed to report the income from additional
sources.
The amounts reported in Column B for their Schedules G-L would be as
Line 2. Enter the amount of income or loss for each class of income
follows:
attributable to each source shown on Line 1, Columns A thru D. Add the
Andy
Timi
amounts in Columns A thru D for each class of income and enter the total
Line 2c - $32,000
$35,200
for each class in Column E. The amount listed in Part II, Line 2, Column E
Line 2d - $
0
$
0
must agree with the amounts shown for each corresponding class of income
Line 2e - $
0
$
0
in Part I, Lines 2c thru 2j, Column B. Include additional worksheets if more
columns are needed to report the income from additional sources. Classes
Line 2g - $ 2,000
$ 2,000
of income reported from PA S corporations, partnerships or limited liability
Line 2h - $ 4,000
$
0
companies (entities) should be provided to each shareholder, partner or
Because of the pro-rata reductions required for Column A, the amounts
member. Copies of the statements from entities are also required to be
for Column C (the lesser of Column A or Column B) for Andy and Timi are
included with the return.
as follows:
Part III
Andy
Timi
Instructions for the Worksheet for Adjusted Tax Paid in the
Line 2c - $28,800
$31,680
Other State
Line 2d - $
0
$
0
Line 1. Enter the amount from Part I, Column C, Line 3 here.
Line 2e - $
0
$
0
Line 2. Add the amounts from Part I, Column B, Lines 2c through 2j.
Line 2g - $ 1,440
$ 1,440
Enter the result here.
Line 2h - $ 2,880
$
0
Line 3. Divide the amount on Line 1 by the amount on Line 2. Calculate
the amount to six decimal places. If the result of dividing Line 1 by Line 2
The total incomes on which credits may be claimed on separate Schedules
equals 1.000000, you are not required to make an adjustment to taxes.
G-L (Line 3 on the Schedules G-L) are $33,120 for both Andy and Timi.
PAGE 4
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