"Tax Time: Pennsylvania PIT Tax Filing Tips in a COVID World"

Jennifer Karpchuck article on "Tax Time: Pennsylvania PIT Tax Filing Tips in a COVID World"

In an article published on April 22, 2021 in The Legal Intelligencer, Chamberlain Shareholder Jennifer Karpchuk discusses five tips and unique issues that Pennsylvania taxpayers should be aware of when filing their returns.

“First and foremost, taxpayers have extra time to file their Pennsylvania personal income tax returns (PIT) and pay any tax due,” explains Karpchuk. “The Internal Revenue Service announced it was extending the federal income tax filing deadline to May 17 and the Pennsylvania Department of Revenue followed suit, announcing that PIT and final 2020 PIT payments are also due May 17.”

Karpchuk further explains that the stimulus checks distributed by the federal government are not subject to PIT and the PPP loan forgiveness pursuant to legislation enacted by Governor Wolf, are also not taxable for Pennsylvania PIT purposes.

While many taxpayers working from home may be tempted to claim a home office deduction, Karpchuk outlines the potential pitfalls to doing so. “As a preliminary matter, in order to even be eligible to claim the deduction, taxpayers must meet a three-part test,” said Karpchuk. “First, the taxpayer’s employer must either not provide a suitable work area, or the taxpayer must be prohibited from reporting to work due to COVID-19. Second, the taxpayer’s employer must: require the employee, as a condition of employment, to maintain a suitable work area away from the employer’s office; the work area must be the principal place where the taxpayer performs duties of employment; and the office or work area must be used to regularly perform the duties of employment. Finally, there must be exclusive use of the area where the expense is claimed.”

To learn more, subscribers may view the full article here.