Pa Form W2S – Fill Out and Use This PDF

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Use this schedule to list and calculate your total PA-taxable compensation and PA tax withheld from all sources.

Section I Instructions: List each federal Form W-2 for you and your spouse, if married, received from your employer(s). In the first column enter T for the taxpayer’s Social Security Number that appears first on the PA tax return and enter S for the second or spouse SSN. From the Form(s) W-2, enter each employer’s federal identification number. Enter the amounts from the Forms W-2 in each column. IMPORTANT: You do not have to submit a copy of your Form W-2 if you earned all your income in Pennsylvania and your employer reported your PA wages correctly and withheld the correct amount of PA income tax. You must submit a copy of your Form W-2 in certain circumstances. See the PA Schedule W-2S instructions for a list of when a copy of a W-2 is required.

Section II Instructions: List each source of income received during the taxable year on a form or statement other than a federal Form W-2. Enter each payer’s name. List the payment type that most closely describes the source of your non-employee compensation. Enter the amount of other compensation that you earned. If the form or statement does not have separately stated amounts, enter the amount shown in both federal and PA columns.

IMPORTANT: You must submit a copy of each form and statement that you list in Section II, whether or not the payer withheld any PA income tax and regardless of whether

or not the income was taxable in PA. CAUTION: The federal and Pennsylvania (state) wages may be different in Section I and Section II.

If you need more space, you may photocopy this schedule or make your own schedules in this format.

Section I - Federal Forms W-2 SEE THE INSTRUCTIONS FOR WHEN TO SUBMIT FORM(S) W-2

Total Section I - Add the Pennsylvania columns

Section II - Miscellaneous and Non-employee Compensation from federal Forms 1099-R, 1099-MISC and other statements

YOU MUST SUBMIT COPIES OF EACH FORM OR STATEMENT LISTED IN THIS SECTION

Total Section II - Add the Pennsylvania columns

TOTAL - Add the totals from Sections I and II

Reset Entire Form

PA-40 W-2S IN 09-19

Pennsylvania Department of Revenue 2019

Instructions for PA-40 Schedule W-2S

Wage Statement Summary

WHAT’S NEW

The schedule was revised to divide the form into sections instead of parts to conform to a new department standard required as part of a computer system change. Two new segments of instructions have been added for “How to Sub- mit Form(s) W-2, 1099-R, 1099-MISC or Other Documents” and “When to Submit Form(s) 1099-R, 1099-MISC or Other Documents”. Column C in Section II was revised to request the Payer FEIN instead of the Payer Name.

FORM INSTRUCTIONS

IDENTIFICATION INFORMATION

NAME OF TAXPAYER CLAIMING TAX FORGIVENESS

Enter the name of the taxpayer. If a jointly filed return, enter the name of the primary taxpayer (name shown first on the PA-40, Personal Income Tax Return).

SOCIAL SECURITY NUMBER

Enter the Social Security number (SSN) of the taxpayer. If a jointly filed return, enter the primary taxpayer’s SSN.

GENERAL INFORMATION

PURPOSE OF SCHEDULE

Use PA-40 Schedule W-2S to report compensation received from employment, miscellaneous non-employee compensa- tion and taxable distributions from retirement plans. Use PA- 40 Schedule W-2S to record information regarding distributions from annuities taxable as interest income.

Refer to the PA Personal Income Tax Guide – Gross Com- pensation section for additional information.

RECORDING DOLLAR AMOUNTS

Show money amounts in whole-dollars only. Eliminate any amount less than $0.50 and increase any amount that is $0.50 or more to the next highest dollar.

GENERAL INSTRUCTIONS

SECTION I

Use Section I of PA-40 Schedule W-2S to report Pennsyl- vania-taxable compensation from federal Form(s) W-2 as well as to record amounts from Form W-2 not taxable for Pennsylvania personal income tax purposes. Include a statement explaining why any amounts are not Pennsylva- nia-taxable compensation.

Legible photocopies of Form W-2 must be submitted in some circumstances. See “When to Submit Form(s) W-2” later in these instructions. Otherwise, do not submit Form(s) W-2. However, the department has the statutory authority to require actual Form(s) W-2.

WHO MUST COMPLETE

SECTION II

PA-40 Schedule W-2S must be completed and included with an originally filed PA-40, Personal Income Tax Return, for any taxpayer(s) reporting gross compensation on Line 1a of the PA-40. PA-40 Schedule W-2S must also be completed to record any distributions from pension or profit-sharing plans, IRAs, SEPs, annuities and any other retirement plan or distribution reported on federal Form 1099-R, Distribu- tions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., whether the distri- bution is taxable or nontaxable for Pennsylvania personal income tax purposes.

An amended PA Schedule W-2S must be included with Schedule PA-40 X if increases or decreases in income or changes to any information or amounts in Sections I or II of PA Schedule W-2S are discovered after an original or other amended return is filed with the department. Section III on Page 2 of Schedule PA-40 X must be completed to explain any increase or decrease to the gross compensation re- ported on an amended PA-40, Personal Income Tax Return.

Use Section II of PA-40 Schedule W-2S to list all the sources of non-employee and other compensation as well as all tax- able and nontaxable distributions from eligible Pennsylvania retirement plans, all distributions from IRAs, all distributions from qualified deferred compensation plans, all distributions from annuities purchased from commercial insurance or mu- tual companies, all distributions from employee stock own- ership plans (ESOP), all distributions from endowment contracts and all distributions from charitable gift annuities. Report Pennsylvania-taxable and nontaxable compensation and any Pennsylvania tax withheld from that income. Form(s) 1099-R, 1099-MISC, and other documents report- ing the income shown on Section II of PA Schedule W-2S must be included with the PA-40, Personal Income Tax Re- turn. See “When to Submit Form(s) 1099-R, 1099-MISC or Other Documents” later in these instructions. Include Penn- sylvania-taxable and nontaxable amounts from Form(s) 1099 that show pensions, retirement plan distributions, ex- ecutor fees, jury duty pay, and other miscellaneous compen- sation.

HOW TO SUBMIT FORM(S) W-2, 1099-R, 1099-MISC OR OTHER DOCUMENTS

PAPER FILED RETURNS

For paper filed PA-40, Personal Income Tax Returns, submit

aphotocopy (8 ½ x 11 sheet) of the form(s) W-2, 1099-R and/or 1099-MISC as required per “When to Submit Form(s) W-2” in Section I of instructions and/or “When to Submit Form(s) 1099-R, 1099-MISC or Other Documents” in Sec- tion II of the instructions.

E-FILED RETURNS

For e-filed returns (software transmitted or padirectfile re- turns), Form(s) W-2, 1099-R and/or 1099-MISC may be sub- mitted as required per “When to Submit Form(s) W-2” in Section I of instructions and/or “When to Submit Form(s) 1099-R, 1099-MISC or Other Documents” in Section II of the instructions using one of the following methods:

●PDF file – attaching a PDF file of the documents to return when filed (if the software allows these attach- ments);

●Fax - using the DEX-93, Personal Income Tax Corre- spondence Sheet, as the cover sheet and faxing the document(s) to 717-772-4193;

●Email – attaching a PDF file of the document(s) to an email to RA-BITPITELFCORFAXES@PA.GOV using the DEX-93 as a cover sheet and following the email rules on the DEX-93; or

●U.S. Postal Service - mailing the information to the de- partment at:

PA DEPARTMENT OF REVENUE

ELECTRONIC FILING SECTION

P.O. BOX 280507

HARRISBURG PA 17128-0507

LINE INSTRUCTIONS

SECTION I

List each federal Form W-2 for the taxpayer and/or spouse, if married, received from each employer.

T/S

Enter a T to report the income from all Forms W-2 for the taxpayer whose SSN appears first on the PA-40, Personal Income Tax Return. Enter an S for all Forms W-2 for the spouse.

EMPLOYER’S IDENTIFICATION NUMBER

Enter the federal employer identification number (FEIN) from Box B of the W-2 for each employer.

FEDERAL WAGES

Enter the amount of federal wages from Box 1 of the W-2 for each employer.

MEDICARE WAGES

Enter the amount of Medicare wages from Box 5 of the W- 2 for each employer.

PA COMPENSATION

Enter the Pennsylvania compensation from Box 16 of the W-2 for each employer.

CAUTION: If Box 15 of the W-2 does not indicate PA as the state, the compensation reported by the em- ployer in Box 16 may be required to be adjusted to conform to Pennsylvania’s rules. Examples of the adjustments re- quired to be made include, but are not limited to: increasing the compensation to include any retirement plan or qualified deferred compensation contribution amounts (Codes D, E, F, G, H and/or S in Box 12 of the W-2) not included in the Box 16 amount, decreasing the compensation to remove any group-term life insurance premiums paid (Code C in Box 12 of the W-2) included in the Box 16 amount. Complete and include the PA-40 W-2 RW, PA W-2 Reconciliation Work-

sheet with the PA-40, Personal Income Tax Return.

PA INCOME TAX WITHHELD

Enter the amount of Pennsylvania income tax withheld from Box 17 of the W-2 for each employer.

WHEN TO SUBMIT FORM(S) W-2

The department does not require submission of a copy of Form W-2 in all instances. A copy of Form W-2 is not re- quired to be submitted when all the compensation income was earned in Pennsylvania and the employer reported the Pennsylvania wages correctly and withheld the correct amount of Pennsylvania personal income tax.

An actual state copy or a legible photocopy of each state copy of Form W-2 and/or a written explanation of the amount of compensation reported should be submitted with the PA- 40, Personal Income Tax Return, if:

1.The PA compensation entered on Line 1a of the PA-40, Personal Income Tax Return, is not the same as Box 16 on Form W-2 (when the amount of Pennsylvania com- pensation or withholding is believed to be incorrect).

2.The employer provided a handwritten Form W-2.

3.The employer reported an incorrect amount on Form W- 2. A written statement from the employer must also be included.

4.The employer withheld PA income tax from wages at a rate that is more than the current year’s tax rate of 3.07 percent.

5.PA income tax was withheld by an employer for a resi- dent of a reciprocal compensation agreement state.

6.The Medicare wages in Box 5 on Form W-2 are greater than PA wages in Box 16. In this case, complete and in- clude the PA-40 W-2 Reconciliation Worksheet with the PA-40, Personal Income Tax Return.

7.A PA resident is working in another state or country and did not have PA income tax withheld by the employer.

8.A distribution from a nonqualified deferred compensa- tion plan is included in Box 1 of Form W-2.

9.Form W-2 shows income earned or tax withheld for an- other state.

NOTE: If Form W-2 or a federal substitute W-2, Form 4852 is not available, evidence of the Pennsylvania

compensation and tax withheld must be submitted by pro- viding pay stubs and a statement identifying the employer and the reason Form W-2 is not available. Please submit legible photocopies. Keep all original documents.

See “How to Submit Form(s) W-2, 1099-R, 1099-MISC or Other Documents” for additional information.

TOTAL SECTION I

Add the amounts of PA compensation and PA income tax withheld and enter the results.

SECTION II

List each source of income received during the taxable year on a form or statement other than a federal Form W-2.

IMPORTANT: A copy of each form and statement for amounts listed in Section II must be submitted with the PA-40, Personal Income Tax Return, whether or not the payer withheld any PA income tax and regardless of whether

or not the income was taxable in PA.

See “When to Submit Form(s) 1099-R, 1099-MISC or Other Documents” for additional information.

CAUTION: The federal and Pennsylvania (state) wages may be different in Section I and Section II.

COLUMN A

Enter a T if the payment or distribution was to the primary taxpayer shown first on the PA-40 or S if the payment or dis- tribution was to the spouse.

COLUMN B

Enter the letter designation for the type of payment(s) from the following list:

●A Executor fee;

●B Jury duty pay;

●C Director’s fee;

●D Expert witness fee;

●E Honorarium;

●F Covenant not to compete;

●G Damages or settlement for lost wages other than per- sonal injury;

●H Other non-employee compensation (enter descrip- tion in space provided);

●I Distribution from employer sponsored retirement, pension, or qualified deferred compensation plan;

●J Distribution from IRA (Traditional or Roth);

●K Distribution from life insurance, annuity or endow- ment contracts;

●L Distribution from charitable gift annuities; and/or

●M Distribution from employee stock ownership plan (enter description in space provided).

NOTES: If the type of payment listed on Form 1099- R is not known, contact the payer for more information regarding the distribution to properly report the type of pay- ment. For distributions from an IRA, the box next to Box 7 on the 1099-R will have an X entered to indicate a distribu- tion from a traditional IRA, SEP IRA or SIMPLE IRA. Distri- butions from Roth IRAs will have either code J or T included in Box 7 of the 1099-R. Distributions from qualified deferred compensation plans should be listed on Form(s) W-2 or W-

2P.

COLUMN C

Enter the payers’ federal employer identification number (FEIN).

COLUMN D

If the payment being reported is from a federal Form 1099- R, enter the distribution code(s) listed in Box 7 of the 1099- R.

COLUMN E

Enter the total amount of the payment from a federal Form 1099-MISC or from another document and/or any distribu- tion from federal Form 1099-R Box 1. If the payment is from a federal Form 1099-MISC or from another document other than a 1099-R, enter the same amount in Column G.

COLUMN F

If the distribution code in Column D is 1, 2, J, L, S or U from the 1099-R, enter the amount of the adjusted basis in the plan. The adjusted basis in the plan or IRA is generally equal to the sum of the contributions to the plan or IRA minus the sum of prior distributions which were previously treated as nontaxable as a recovery of such contributions.

COLUMN G

If the distribution code in Column D is 1, 2, 8, 9, J, L, S or U from the 1099-R, subtract the amount in Column F from Col- umn E and enter the resulting amount (but not less than zero) here. If any other 1099-R code was entered in Column D, enter a zero in Column G (there is no PA-taxable com- pensation from these codes). If the distribution code in Col- umn D is a 7, or 7D, or 2D, 3D, or 4D and the payment type listed in Column B is K or L, these types of payments are not taxable as compensation, but are taxable as interest in- come to the extent there is income included in federal gross income. Although not taxable as compensation, they must be included to allow for reconciliation with amounts reported for federal income tax purposes. Refer to the PA Personal Income Tax Guide – Gross Compensation section for addi- tional information regarding 1099-R codes and their taxabil- ity.

If a payment from a 1099-MISC or from another document other than a 1099-R was entered, enter the amount from Column E.

CAUTION: Although the income reported on Form 1099-R may not be taxable as compensation due to the code reported in Box 7 of the 1099-R, there may be

taxable income from a distribution reported on 1099-R form(s) bearing codes 1D, 2D, 3D, 4D, 6 or 7D in other classes of income. Codes 1D, 2D, 3D, 4D or 7D are reported as taxable interest income on PA-40 Schedule A. If cash or boot is involved in the transaction for Code 6 distributions, report any gain on the transaction on PA-40 Schedule D. Refer to the PA Personal Income Tax Guide – Interest and PA Personal Income Tax Guide – Net Gains or Losses from the Sale, Exchange or Disposition of Property and the in- structions for PA-40 Schedules A and D.

COLUMN H

If the payer withheld PA state income tax from the distribu- tion or payment, enter the amount withheld from that distri- bution or payment. If PA state income tax was withheld from any payment, a copy of the 1099-R or 1099-MISC must be included with the return.

WHEN TO SUBMIT FORM(S) 1099-R, 1099-MISC OR OTHER DOCUMENTS

Copies of Form 1099-R, Distributions from Pensions, Annu- ities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., must be included with paper and e-filed PA- 40, Personal Income Tax Returns, regardless of whether the 1099-R includes PA income tax withheld or whether or not the distribution amount is taxable. For electronically filed re- turns, copies of the 1099-R are not required to be included if the 1099-R includes federal tax withheld. However, if the 1099-R does not include federal tax withheld, a copy of the 1099-R must be provided with the filing of the PA-40, Per- sonal Income Tax Return. In addition, any 1099-R that in- cludes PA income tax withheld must be provided to the department even if the form includes federal withholding. See “How to Submit Form(s) W-2, 1099-R, 1099-MISC or Other Documents” for additional information.

Copies of Form 1099-MISC, Miscellaneous Income, must also be included with paper and e-filed PA-40, Personal In- come Tax Returns, if the income is reported in Section II of PA-40 Schedule W-2S. Do not include Form 1099-MISC for income reported on PA-40 Schedules C, E or F unless the form includes PA income tax withheld. See “How to Submit Form(s) W-2, 1099-R, 1099-MISC or Other Documents” for additional information.

Copies of other documents supporting income reported as honorarium, executor/executrix fees, jury duty fees, direc- tor’s fees, damages for lost wages, etc. not reported on Form 1099-MISC must also be included with paper and e- filed PA-40, Personal Income Tax Returns, if the income is reported in Section II of PA-40 Schedule W-2S. See “How to Submit Form(s) W-2, 1099-R, 1099-MISC or Other Doc- uments” for additional information.

The following filing tips are provided to assist with the completion of PA-40 Schedule W-2S Sections I and II.

1099-R DISTRIBUTION CODE 2

A taxpayer with a distribution Code 2 on Form(s) 1099-R must determine if he/she received the distribution from an eligible employer-sponsored retirement or pension or retire- ment plan eligible for PA tax purposes. Additionally, the tax- payer must have been eligible by meeting the age or service

conditions of the plan. If these conditions are met, the tax- payer should input the same amount in Column F as was reported in Column E. Otherwise, the cost or adjusted basis of the plan must be included in Column F.

A taxpayer with distribution code 1 or 2 on Form(s) 1099-R from a retirement plan from the State Employees’ Retire- ment System, the Pennsylvania School Employees’ Retire- ment System, the Pennsylvania Municipal Employees’ Retirement System or the U.S. Civil Service Commission Retirement Disability Plan should input the same amount in Column F as was reported in Column E.

IRA CONVERSIONS

A taxpayer with a conversion of a traditional IRA to a Roth IRA (or vice versa) with distribution code 1 in Box 7 of the 1099-R may be eligible to report the amount as nontaxable income when a direct transfer from trustee to trustee occurs and/or the when the entire distribution from the original IRA account (including taxes withheld) is paid into the new IRA account within 60 days of the date of the distribution. In such cases, input the same amount in Column F as reported in Column E. If the distribution is not a direct transfer from trustee to trustee, or the entire distribution is not paid into the new IRA account as a result of the conversion of the original IRA account, the distribution must be reported as two separate distributions on PA Schedule W-2S. The dis- tributions will be reported on separate lines of Column E with the net amount converted into the new IRA (gross distribu- tion from Box 1 of the Form 1099-R less amounts not repaid into the new IRA account) being reported as the first distri- bution and amounts not repaid into the new IRA account re- ported as the second distribution. The amount reported in Column E for the first distribution will not be taxable (input the same amount in Column F as reported in Column E). The amount reported in Column E for the second distribution may be taxable since Column F will reflect the cost or ad- justed basis of the IRA.

DISTRIBUTIONS FROM ANNUITY OR

ENDOWMENT CONTRACTS AND CHARITABLE GIFT ANNUITIES

A taxpayer with distributions from an annuity purchased from a commercial insurance or mutual company, an endowment contract or a charitable gift annuity having a distribution code 7 or 7D in Box 7 of the 1099-R must record the distributions on PA Schedule W-2S and also report the amount of income taxable for federal income tax purposes as PA-taxable in- terest income. When recording the distribution on PA Sched- ule W-2S, input the same amount in Column F as reported in Column E. Report the federal taxable amount of any an- nuities or endowments on Line 11 of PA Schedule A. Report the federal taxable amount of any charitable gift annuities on Line 12 of PA Schedule A.

DISTRIBUTIONS FROM AN EMPLOYEE

STOCK OWNERSHIP PLAN

A taxpayer with a distribution from an employee stock own- ership plan (ESOP) should enter the amount of the distribu- tion in Column G if the stock in the ESOP has not been

allocated to the participants. Use payment type M H in Column B and the description “Non-Allocated ESOP Stock Dividend” in the space to describe the payment. If the stock has been allocated to the participants, input the same amount in Column F as reported in Column E and enter pay- ment type M H in Column B and the description “Allocated ESOP Stock Dividend” to describe the payment. Allocated ESOP stock dividends are taxable as dividend income for PA purposes. If a distribution from an ESOP is related to an allocated ESOP stock dividend, enter the name of the com- pany and amount of the distribution on Line 8 of PA Sched- ule B.

DISTRIBUTIONS OF EXCESS

CONTRIBUTIONS

A taxpayer with distributions of excess contributions and earnings on the excess contributions (distribution codes 8 and/or P in Box 7 of the 1099-R) must determine if the con- tributions being returned are from taxpayer contributions/de- ferrals or employer contributions. In cases where the excess contributions being returned are taxpayer contributions/de- ferrals, only the amount of excess contributions should be entered in Column F. Earnings on the excess contributions should not be included in the adjusted basis of previously taxed contributions. In cases where the excess contributions and earnings being returned are employer contributions, no entry should be made in Column F. In either case, a letter from the employer/plan administrator is required to provide whether or not the contributions being returned are taxpayer contributions/deferrals and a breakdown between the ex- cess contributions and the earnings on the excess contribu- tions when the excess contributions and earnings are from employee contributions/deferrals.

1099-R DISTRIBUTION CODE 4

A taxpayer with a distribution Code 4 (without Code D) on Form(s) 1099-R should also include the amount in Box 1 in eligibility income for Schedule SP, Special Tax Forgiveness purposes. The amount should be included in Section III, El- igibility Income, of Schedule SP on Line 4, Insurance pro- ceeds and inheritances.

ACTIVE DUTY MILITARY PAY

Taxpayers with military pay for active duty outside PA should complete PA Schedule W-2S and include the W-2 in Section I of PA Schedule W-2S. If any income is earned by a PA res-

ident while on active duty status within PA, that income should be included in the “PA compensation from Box 16” column. Do not include compensation earned while on active duty outside PA or if a nonresident on active duty within PA. If any PA income tax is withheld from the military pay, include the amount in the “PA income tax withheld from Box 17” col- umn. See the Military Pay – Members of the Armed Forces instructions on Page 41 of the PA-40IN, Pennsylvania Per- sonal Income Tax Instructions Booklet, for more information.

SURVIVOR BENEFITS REPORTED

AS CODE 7 ON FORM 1099-R

Taxpayers who receive retirement benefits as the beneficiary from a qualified joint survivor annuity reporting the distribu- tions to the taxpayer using Code 7 instead of Code 4 in Box 7 of federal Form 1099-R should also include the amount in Box 1 as eligibility income for Schedule SP, Special Tax For- giveness purposes. The amount should be included in Sec- tion III, Eligibility Income, of Schedule SP on Line 4, Insurance proceeds and inheritances.

KSOP DISTRIBUTIONS

Taxpayers with a distribution from an ESOP within a 401(k) (also known as a KSOP) other than a rollover distribution, must contact the department and provide a copy of the plan document in order to determine if the amount of the distri- bution is taxable.

TOTAL SECTION II

Add the amounts for Columns G and H enter the results.

TOTAL LINE

Add the amounts from PA compensation and PA tax withheld from the Total Section I and Total Section II lines and enter the results here and on Lines 1a and 13 of the PA-40, Per- sonal Income Tax Return.