topic Re: Problem with PA-40 calculations in State tax filing

Problem with PA-40 calculations

Al130 — Sun, 23 Mar 2025 21:03:50 GMT

I am a NJ resident who owns a small business and does some work in Pennsylvania.

I'm trying to apportion my Schedule C income for form PA-40, using Schedule NRH. But the calculations are coming out wrong. Instead of taking the amount of income I earned in PA and moving forward with that, the software is adding that to my entire profits for the year and wanting me to pay tax on that in PA. But only a small amount of income (and therefore tax) is related to PA. Most of is was earned in NJ, my state of residence.

Is this a software error? Or what have I done wrong?

Re: Problem with PA-40 calculations

KeshaH — Tue, 25 Mar 2025 21:49:40 GMT

If you'd like, we can look at your return and see exactly what you see to help come to a resolution. The return will be scrubbed and won't include any of your personal details.

If you're using TurboTax Online:

Once you're logged in to your account,

- on the left hand panel, click on Tax Tools and then choose Tools

- on the pop up window, select Share my file with Agent

- you'll see a message saying you'll give us a copy of your tax return. Your personal information will be changed so we can't see any private information.

- click okay and you'll get another message with a token

If you're using TurboTax Desktop:

Click on Online in the top menu of TurboTax Desktop for Windows
Select 'Send Tax File to Agent'
Write down or send an image of your token number and state then place in this issue.
We can then review your exact scenario for a solution

Please reply to this message with your token so that we can further assist you. Let us know all other states that are included on the return.

Re: Problem with PA-40 calculations

Al130 — Wed, 26 Mar 2025 01:22:11 GMT

Dear Kesha,

Thanks so much for replying. My token number is 123145806405034-05870879.

My states are Pennsylvania and NJ (my state of residence...I have not yet begun that return).

FYI, I also have a social media case number of 17482542. I was chatting with someone via Twitter but was uncomfortable filling out the Google form with so much personal info.

Many thanks in advance for your help.

Re: Problem with PA-40 calculations

KeshaH — Wed, 26 Mar 2025 03:06:09 GMT

Thank you for sending over your token.

I was able to pinpoint the reason for the issue.

When you get to the Business Summary screen within the PA return, click on edit next to the first business.

On the next screen, click the box that says I need help determining the correct amount of income/loss to report for PA (Schedule NRH).

Do these steps for both businesses.

Continue through the rest of the business screens until you get to Nonresident business compensation. Click yes.

Verify the amounts on this screen are correct. This should update your Form PA-40 to only include the apportioned net profit.