Pennsylvania allows certain employees to deduct qualifying unreimbursed employee business expenses that are required as a condition of employment and are not reimbursed by their employer.
Schedule UE is used to report these allowable expenses and calculate the deduction that may reduce Pennsylvania taxable compensation income.
Program Entry
Pennsylvania Return → Adjustments to Income → Schedule UE - Allowable Employee Business Expenses
Part A: Employee Business Expense Deductions
Enter general employee business expenses that qualify for deduction under Pennsylvania law.
Examples may include:
- Union dues
- Professional license fees
- Professional subscriptions
- Small tools and supplies required for employment
- Expenses required by the employer as a condition of employment
Only expenses allowed by Pennsylvania law should be entered.
Part B: Business Travel Expenses
Select Begin to enter qualifying business travel expenses.
Examples may include:
- Transportation expenses
- Lodging expenses
- Meals subject to Pennsylvania rules
- Mileage for qualifying business travel
The travel must be necessary and directly related to employment.
Part C: Miscellaneous Expenses
Select Begin to enter other allowable employee business expenses not reported elsewhere on Schedule UE.
Examples may include:
- Required uniforms
- Safety equipment
- Professional publications
- Employer-required expenses not reimbursed by the employer
Part D: Office or Work Area Expenses
Select Begin to enter qualifying office or work area expenses.
These expenses generally relate to maintaining a workspace required for employment and allowed under Pennsylvania law.
Only unreimbursed expenses that qualify for Pennsylvania purposes should be entered.
Part E: Moving Expenses
Select Begin to enter qualifying moving expenses.
Pennsylvania may allow certain moving expenses that were incurred as a condition of employment and meet Pennsylvania requirements.
Enter only those expenses that qualify under Pennsylvania law.
Part F: Education Expenses
Select Begin to enter qualifying education expenses.
Examples may include:
- Tuition
- Books
- Required course materials
- Continuing education expenses
The education must maintain or improve skills required in the taxpayer's current occupation or be required by the employer or law to retain employment status.
Schedule UE Entry
Select Begin to manually complete a Schedule UE.
This option may be used when:
- The expenses are not associated with the selected W-2.
- Additional employee business expense information needs to be entered.
- A separate Schedule UE is required.
Multiple Employers
If your return includes a Federal Form 2106 and you have more than one employer, you may need to create an additional Schedule UE for each employer.
Pennsylvania requires employee business expenses to be reported separately by employer.
Complete a separate Schedule UE for each employer when applicable.
How Does This Affect My Return?
Information entered on Schedule UE may:
- Reduce Pennsylvania taxable compensation income.
- Reduce Pennsylvania tax liability.
- Increase a Pennsylvania refund.
- Allow qualifying unreimbursed employee business expenses as a Pennsylvania deduction.
Notes
- Pennsylvania does not allow all employee business expenses deducted on a federal return.
- Expenses must generally be required as a condition of employment and remain unreimbursed by the employer.
- Separate Schedule UE forms may be required when expenses relate to multiple employers.
- Supporting documentation should be retained for all expenses claimed.
- Keep copies of receipts, mileage logs, employer requirements, and other supporting records with your tax documents.