61 Pa. Code § 121.10 - Reporting income

(a) Under the law, only certain classes of income are subject to tax. Therefore, that income not included in any of the eight categories is exempt from the tax.

(b) Examples of income subject to the tax which shall be reported are the following:

(1) Wages, salaries, commissions, bonuses, incentive payments and tips.

(2) Net profits from business or profession.

(3) Profits from a partnership or association.

(4) Net gains from sales or exchanges of real estate, autos, securities and other property.

(5) Rents and royalties from property, patents and copyrights.

(6) Gambling and lottery winnings.

(7) Interest on bank deposits, bonds and notes.

(8) Interest on net gain on bonds or obligations of other states or countries.

(9) The taxpayer's share of income from estates or trusts.

(10) Dividends except dividends paid in the form of stock distributed by a corporation to its stockholders if the distribution is not treated as personal income for Federal Income Tax purposes.

(c) Examples of income not subject to the tax which should not be reported are the following:

(1) Pensions and annuities.

(2) Government payments made to veterans and their families.

(3) Benefits paid by public retirement systems.

(4) Interest on obligations of this Commonwealth or its political subdivisions and authorities and interest on certain obligations of the United States government, its agencies or instrumentalities are not taxable if they are statutorily free from taxation. Interest on obligations of other states and countries, however, shall be subject to the Commonwealth Income Tax.

(5) Payments to reimburse actual expenses.

(6) The value of meals and lodging furnished for the convenience of the employer or casual employer.

(7) Social Security benefits.

(8) Military pay received by a United States serviceman on active duty outside of this Commonwealth.

(9) Life insurance proceeds.

(10) Workers' Compensation benefits.

(11) Payments for occupational diseases under section 108 of the Workers' Compensation Act (77 P. S. § 27.1) and section 108 of the Pennsylvania Occupational Disease Act (77 P. S. § 1208).

(12) Public assistance payments.

(13) Unemployment compensation payments.

(14) Income received for child support.

(15) Educational stipends for which no services are rendered, such as scholarships.

(16) Dividends paid in the form of stock by the distributing corporation if not treated as personal income for Federal Income Tax purposes.

Notes

61 Pa. Code § 121.10

The provisions of this § 121.10 amended March 19, 1982, effective 3/20/1982, 12 Pa.B. 994; amended December 10, 1999, effective 12/11/1999, 29 Pa.B. 6249.

The provisions of this § 121.10 amended under section 354 of the Tax Reform Code of 1971 (72 P. S. § 7354).