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Screen PAM2 - Pennsylvania Business Income Adjustments (1065)

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Business Income Adjustments Increasing PA Income

Separately allocating income, separate books and records, and no transactions between businesses
Enter
X
if the entity is separately allocating its income, keeps separate books and records for financial purposes, and there have been no transactions between multiple businesses. The PA Allocated Income (Loss) column boxes are available to complete PA Schedule M, Reconciliation of Federal Taxable income to PA Taxable Income, Part II, PA Allocated Income (Loss) column.

Business Income Federal Expenses Not Allowed In PA

Taxes paid on income included on federal
The statement contains all of the tax information entered in the federal Inc screen. To exclude an item from the state return, delete the amount, enter a zero, or delete the entire line item from the statement. The application displays the modified column in black and won't overwrite the new data with subsequent federal-to-state data transfers.
Type Code
 in the statement can include any item in the total amount. Select F4 to see a list of available codes. Additional amounts may be entered on a blank line. The available type codes are shown in the following table.
Type Code
Description
Destination
O
Other (default)
Doesn't transfer to return.
1
1065, Ln 14 Net Income Tax
PA Schedule M, Reconciliation of Federal Taxable Income to PA Taxable Income, Part II, Section V, line a2.
2
1065, Ln 14 Tax Not based on Income
PA Schedule M - Tax Worksheet Deductible tax amount.
3
Sch A Net Income Tax
PA Schedule M, Reconciliation of Federal Taxable Income to PA Taxable Income, Part II, Section V, line a2.
4
Sch A Tax Not Based on Income
PA Schedule M - Tax Worksheet Deductible tax amount.

Business Income Expenses Allowed In PA But Not Federal

Business meals and entertainment not deducted on federal (Force)
The application calculates the amount of meals and entertainment expense not taken in arriving at federal ordinary income and completes PA Schedule M, Reconciliation of Federal Taxable Income to PA Taxable Income, Part II, Section VI, line a2. Enter an amount to override the calculated amount.
Expense adjustments to qualify for federal credits (Force)
The application transfers the amount of federal Form 1065, Page 1, expenses that were reduced or income increased due to federal credits to Schedule M, Part II, Section VI, line g14. These include the Small Employer Health Insurance Premiums, Work Opportunity, Employer Social Security and Medicare Taxes Paid on Certain Employee Tips, Disabled Access, Orphan Drug, Small Employer Pension Plan Start-up Costs, Employer-Provided Childcare Facilities and Services, Employer Family and Medical Leave, Employer Differential Wage Payments, and Increasing Research Activities credits. Enter an amount to override the calculated amount.

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