We provide here a written summary of answers provided by the Department of Revenue to the committee at periodic question and answer sessions. These documents are classified as Revenue information issued for informational purposes only for the convenience of PICPA members. Pursuant to 61 Pa. Code Section 3.4, these documents should not be relied upon for any purpose or used in tax appeals. Taxpayers requiring a binding opinion on a specific fact situation may request a written letter ruling under 61 Pa. Code Section 3.3.
Q&A with the Pennsylvania Department of Revenue
Why does the DOR require that 1099-R's be attached to PA-40s?
Why does the DOR require that 1099-R's be attached to PA-40s? Why would one have to attach a 1099-R without anything being taxable when W-2s with withholdings are not required to be attached? It would appear that they could ask to see them if they wanted because it does not appear that anything is being done with them. Why always focus on the exception and foster more paper?
The 1099-R is required to be attached to verify the distribution code included in Box 7 of the form. With many codes being taxable and many being nontaxable, verification of the code is necessary. The form is not required with e-filed returns as it delivered as part of the electronic feed we receive from the federal government.
1099-Rs are required to be kept with the PA-8453 or PA-8879 retained in the tax preparer’s office. 1099-Rs with withholding may be required to be sent in via fax when withholding is included on an e- filed return. W-2s without withholding are required to be included with a return if the federal wages and Medicare wages are not the same, the wages were earned in a state other than Pennsylvania, or the compensation is a distribution from a non-qualified deferred compensation plan.
There are other reasons for including W-2s. A full list of when to include W-2s begins on Page 11 of the PA-40 instruction booklet. W-2s are not required to be sent separately for e-filed returns as they are also part of the electronic feed from the federal government. However, tax preparers are required to keep copies of the W-2s with the PA-8453 or PA-8879 retained in the tax preparer's office. W-2s may be required to be sent in via fax for a variety of reasons for e-filed returns.
The Department recommends that multiple documents such as W-2s and 1099Rs be copied onto single sheets of paper when including them with returns rather than submitting them as separate sheets for each document or submitting the original forms.