What income do I include for my Schedule SP?
For the Schedule SP you will include all of your taxable Pennsylvania income along with the following nontaxable income:
- Nontaxable interest, dividends, and gains and/or annualized income-Include nontaxable interest or dividends on items such as bonds, any money you received as a beneficiary of an estate, etc.
- Alimony- Alimony payments that you received are not taxable in the state of Pennsylvania. However, any alimony received will be used to calculate your PA Tax Forgiveness credit (Schedule SP).
- Insurance proceeds and inheritances- Include the total proceeds received from life or other insurance policies, to include inherited cash or the value of property received.
- Gifts, awards, and prizes- Include the total amount of nontaxable cash or property received as gifts from others. Also, include awards received in recognition of civic and social achievements and prizes from all games of the Pennsylvania Lottery. (DO NOT subtract lottery expenses)
- Nonresident income (complete if you are a part-year resident or nonresident)- Include all income, not already reported on this schedule, that you (and your spouse, if applicable) earned, received and realized while residing outside Pennsylvania. Also include any amount subtracted from Pennsylvania due to the Military Spouses Residency Relief Act.
- Nontaxable military income- Include the difference between the total military income you earned and the amount you reported as taxable to your Pennsylvania return. DO NOT include combat zone pay and hazardous duty pay.
- Gain excluded from the sale of a residence- Include any nontaxable gain on the sale of your personal residence. This would be the amount excluded from income for Federal purposes and shown on Federal Schedule D.
- Nontaxable educational assistance- Include the total value of all nontaxable scholarships, fellowships, and stipends as well as the amount of any federal and state educational grants received. Do not include student loans. Also, include the value of tuition reductions offered as part of your employer’s benefit plan.
- Cash received for personal use from outside your home- Include payments you received as a foster parent, payments received from a person outside of your home (such as a parent), payments to your employer's withholding plan for hospitalization or health benefits, etc.
How do I calculate my my Tax Forgiveness Credit?
To calculate your Tax Forgiveness Credit, go to:
- State Section
- Pennsylvania Return
- Schedule SP (Tax Forgiveness Credit)
For more information about PA Schedule SP, please click here.