PA-40 A2 www.revenue.pa.gov
NOTE: Do not use the joint oval to report joint interest
income if any interest income is earned by the tax-
payer and/or spouse separately. In such cases, the joint in-
come must be split and the taxpayer and spouse must show
the separate share of the joint interest income on the sepa-
rate PA-40 Schedule A prepared for each.
IMPORTANT: If a separate PA-40 Schedule A is pre-
pared for a taxpayer and spouse, include only the tax-
payer or spouse share of the interest income for each line.
Enter the amount of interest income reported on Line 2b of
the federal return. If filing a joint return and are required to
show the interest income for a taxpayer and spouse sepa-
rately, enter only the taxpayer or spouse’s portion of the in-
terest income reported on Line 2b of the federal return. If a
federal return is not required to be filed, see the instructions
for Line 3.
Enter the total amount of tax-exempt interest income in-
cluded in Line 2a of federal Form 1040.
CAUTION: Do not include the amount of exempt-in-
terest dividends included in Line 2a of the federal re-
turn in this amount. See the instructions for PA-40 Schedule
Enter any other adjustments for items that increase PA-tax-
able interest income and provide a description of the
amounts. Examples of additions to or deductions from fed-
eral interest income that must be added back include, but
are not limited to: taxable distributions from PA ABLE Sav-
ings Program Fund accounts; self-charged interest; amorti-
zation of bond premium; nominee interest; or expenses
incurred to realize interest income.
IMPORTANT: If a federal return is not required to be
filed, enter on this line the amount of any interest in-
come reported in Box 1 of all federal Forms 1099-INT, Inter-
est Income, as well as any other federally taxable interest
income received from all sources including, but not limited
to, U.S. government interest or interest from federal Sched-
Add the amounts on Lines 1 through 3 and enter the result.
Enter the total amount of interest income included in the
amounts reported in Line 1 of federal Schedule B from fed-
eral Schedule(s) K-1.
Enter the amount of tax-exempt interest from direct obliga-
tions of the Commonwealth of Pennsylvania and/or direct
obligations of political subdivisions of Pennsylvania. Include
on this line any interest income from obligations issued by
the commonwealth, a public authority, commission, board
or other agency created by the commonwealth or political
subdivision of the commonwealth.
Enter the amount of any interest income from direct obliga-
tions of the U.S. Government (U.S. Treasury Bonds, Notes,
Bills, Certificates and Savings Bonds). Do not include
amounts from US obligations reported on federal Schedule
K-1(s) or on Line 3 of federal Schedule B in this amount.
See the REV-1643, Tax-Exempt Obligations for Pennsylva-
nia Personal Income Tax Purposes, for additional informa-
Enter any other adjustments that decrease PA interest in-
come and provide a description of the amounts. Examples
include, but are not limited to: interest income earned while
a nonresident; interest on installment obligations that are in-
cluded as gain on the sale of property for PA purposes; for-
feited interest penalty; interest income from an irrevocable
federal grantor trust that is required to file a PA-41, Fiduciary
Income Tax Return; and amortization of bond premium. An
example of the description for interest income earned while
a nonresident would be “Non-Residency Period Interest”.
Do not include expenses incurred to realize interest income.
Include a statement providing the descriptions and amounts
if more than one type of adjustment is included in the
amount reported for this line.
Add the amounts on Lines 5 through 8 and enter the result.
Subtract the amount on Line 9 from the amount on Line 4
and enter the result.
Enter amounts reported on federal Form 1099-R with Box 7
codes 1, 2, 3, 4, or 7 or C that also include code D.
Enter the amount of charitable gift annuity income taxable
for federal income tax purposes.
Enter the amount of any distributions from IRC Section 529
plans that are for non-educational purposes. The cost re-
covery method must be used to determine the taxable
amount for contributions made in tax years 2005 and earlier.
The total amount of distributions claimed as deductions for
tax years 2006 and later is taxable.