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
When there are “other credits” (e.g., EITC) flowing through to an S shareholder, why must a separate return be filed?
When there are “other credits” (e.g., EITC) flowing through to an S shareholder, why must a separate return be filed? This creates a compliance burden – separate returns for each spouse, joint income needs separated; estimated payments need allocated; etc.
The department’s current legacy computer system is not capable of determining which taxpayer utilizes a tax credit on a joint return. In addition, the department’s computers are not capable of determining or recording the tax liability of each taxpayer shown on a joint return separately from one another. Furthermore, many credits require the department to provide the legislature with the names of the taxpayers utilizing the tax credit. We are hopeful that the Integrated Tax System will be able to solve this problem when it becomes available to Individual Taxes.