Pa Schedule Nrh - Compensation Apportionment Page 3
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4PA Schedule NRH
Instructions for Apportioning
Income by Nonresident
Individuals
PA-40 NRH (10–12) (FI)
COMMONWEALTH OF PENNSYLVANIA/BUREAU OF INDIVIDUAL TAXES
PA DEPARTMENT OF REVENUE
WHO MUST USE PA SCHEDULE NRH?
SECTION A. Working Day Basis. If your compensation depends
directly on the number of days you performed services in
A nonresident employee who performs services within and outside
Pennsylvania is subject to PA personal income tax only on the net
Pennsylvania, use this section.
compensation for services performed within Pennsylvania. Your
SECTION B. Business Volume Basis. If your compensation
employer should report your PA gross taxable compensation in the
depends on the amount of business transacted from the services
“state” (PA) box on your Federal Form W-2, Wage and Tax
you performed in Pennsylvania, use this section.
Statement.
If your employer(s) did not report your PA wages, you must
YOU MAY NOT USE BOTH METHODS. Use the percentage you
complete and submit a PA Schedule NRH. You must fill out this
calculated and apply it to your PA gross taxable compensation and
schedule for each employer that:
your allowable PA unreimbursed employee business expenses.
a. Did not report your PA gross taxable compensation on
Part II of PA Schedule NRH is for apportioning income from a
your Form W-2; or
business, profession or farm. If you derived your business,
b. Reported an incorrect amount as PA gross taxable
profession or farm income from sources within and outside
compensation on your Form W-2; or
Pennsylvania and your accounts and records accurately reflect
c. You incurred unreimbursed employee business expenses
income from within Pennsylvania, you must report your PA taxable
in earning or receiving PA gross taxable compensation.
income based upon your accounts or records. If you derived your
You must complete Part I of this schedule and submit it with your
business or farm income from sources within and outside
PA-40.
Pennsylvania and your accounts and records do not clearly reflect
If your employer properly reported the amount of your PA gross
income from within Pennsylvania, complete Part II of PA Schedule
taxable compensation on your Form W-2, and you did not incur
NRH to determine your PA source business or farm income.
unreimbursed employee business expenses, you do not need to
In Part II, you calculate a decimal figure that you apply to your total
complete this schedule.
net profit from business or farming.The decimal figure is an average
Part I provides two methods of apportioning your PA gross taxable
of the sum of three fractions: tangible property; wages, salaries
compensation and your unreimbursed employee business
expenses.
and commissions; and sales.
PART I. HOW TO APPORTION COMPENSATION (AND ALLOWABLE EMPLOYEE BUSINESS
EXPENSES) FOR SERVICES PERFORMED BOTH WITHIN AND OUTSIDE PENNSYLVANIA.
SECTION A. WORKING DAY BASIS
the services you performed in Pennsylvania directly
resulted in business transactions outside Pennsylvania,
Line 1.
Report the total number of days in the taxable year you
include such business in the total for this line.
worked for your employer. For example, a complete year
would be 365 days.
Line 8.
Calculate your apportionment fraction for business
volume directly related to your services performed in
Line 2.
Enter the total number of nonworking days during the
Pennsylvania by dividing Line 7 by Line 6. Calculate to
taxable year you entered in Line 1. Nonworking days
six decimal places.
include weekends and holidays, as long as no work is
performed on those days, as well as vacation days, sick
SECTION C. PA GROSS TAXABLE COMPENSATION
days, leaves of absence due to illness or disability and
days working for other employers or yourself.
Line 9.
From your Form W-2, enter your gross compensation if
your employer failed to separately report your PA earn-
Line 3.
Subtract Line 2 from Line 1 to determine your working
ings (or the correct amount of PA taxable compensation).
days during the taxable year.
NOTE: You must explain the reason you feel the amount
Line 4.
Report the total number of days you performed services
on your Form W-2 is incorrect in a separate statement
or worked within Pennsylvania. NOTE: You are deemed
with this schedule.
to have worked outside Pennsylvania if your employer
Line 10. If you used the working day apportionment method,
required you to perform your job duties outside
enter the percentage from Line 5.
Pennsylvania. If you work outside Pennsylvania for your
own personal convenience or for tax purposes, such
Line 11. If you used the business volume apportionment method,
work days are to be included in the total for this line.
enter the percentage from Line 8.
Line 5.
Calculate your apportionment fraction for days worked in
Line 12. Calculate your apportioned PA gross taxable compensa-
tion by multiplying Line 9 by either Line 10 or Line 11.
Pennsylvania by dividing Line 4 by Line 3. Calculate to
six decimal places.
Follow the instructions in Section C to transfer the amount from
Line 12 to Line 1c of your PA-40 or to Section E.
SECTION B. BUSINESS VOLUME BASIS
Line 6.
Report the total amount of business you transacted for
SECTION D. ALLOWABLE EMPLOYEE BUSINESS EXPENSES
your employer within and outside Pennsylvania during
Line 13. Report the amount of your total unreimbursed employee
the taxable year.
business expenses from PA Schedule UE. These
Line 7.
Report the total amount of business you transacted for
expenses include those you incurred within and outside
your employer based on the services you performed
Pennsylvania in performing the services for your
within Pennsylvania during the taxable year. NOTE: If
employer.
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