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
How come a nonresident cannot participate in the filing of a PA-40 NRC in the instance where he/she holds interest in a pass-through entity in a single member LLC classified as a disregarded entity for federal income tax purposes or a revocable trust?
Only qualifying electing nonresident individual owners may be included in the filing of the PA-40NRC. An individual is defined as a natural person and shall include the members of a partnership or association and the shareholders of a Pennsylvania S corporation [72 P.S. §7301(l)]. Trusts regardless of how they are taxed and limited liability companies regardless of the number of members do not meet this definition, and therefore, cannot be included in the filing of the PA-40 NRC. The department has the authority to request documentation to support the income allocation.