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12995: PA - Resident Credit for Tax Paid to Another State on Dividends and Interest


Pennsylvania

The taxpayer paid taxes to another state for interest and dividends. Why isn’t the PA resident credit flowing to the PA-40?

 

The resident credit for taxes paid to another state or to another country is limited and does not flow automatically. If the taxpayer can take the credit, it must be entered on Schedule G-L using PA screen GL. In all cases, the income must be taxable in Pennsylvania to qualify for the credit.

The taxpayer can claim the resident credit for taxes paid to another state on dividends or interest only if it is classified as business income.

The taxpayer can claim the resident credit for taxes paid to another country on dividends or interest when that income can be classified as interest and/or dividend income in PA and is also subject to tax in other countries from foreign sources.

See the instructions for PA Schedule G-L for details.


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