PERSONAL INCOME TAX PREPARATION GUIDE - PA-40 - WHAT’S NEW

Sep 19, 2026

Personal Income Tax Preparation Guide PA-40 provides preparers and individual taxpayers with instructions for preparing Pennsylvania personal income tax returns. It highlights major updates such as the Working Pennsylvanians Tax Credit (WPTC), requirements to include federal Form 1040, and changes across Schedule D, Schedule O, Schedule OC, and rules for grantor trusts. The guide also explains key next steps after completion, including signatures, address-change procedures, and available payment and mailing options, plus the myPATH online services for secure self-filing and account management.

LanguageEnglish

CategoryForms

FormatPDF

Pages83

Reading Time29 min

AccessFree to download

WHAT’S NEW

PURPOSE

Summary Stage

Return signatures and documentation

Address changes and amended return guidance

Payment options and check requirements

myPATH online services

PERSONAL INCOME TAX PREPARATION GUIDE FOR PERSONAL INCOME TAX RETURNS PA-40 DFO-02 (EX) 12-25 PERSONAL INCOME TAX PREPARATION GUIDE [revenue.pa.gov](revenue.pa.gov) WHAT’S NEW The Working Pennsylvanians Tax Credit (WPTC) is a new state-level tax credit modeled after the federal Earned Income Tax Credit (EITC) . The state credit equals 10 percent of your federal credit and is based on your tax-filing status, income, and number of dependents — following the same structure as the federal EITC. The Department of Revenue will automatically calculate your WPTC and apply it to reduce your PA taxes or increase your refund. IMPORTANT: You must include a copy of your federal Form 1040 with you PA-40 tax return. If you qualify for the federal EITC, you will automatically qualify for the state credit—helping to lower your taxes or increase your refund. The maximum state credit is $805. You may qualify if you: • Have earned income in Pennsylvania (wages, salary, and/or self-employment income) • Qualify for the federal EITC • File both your federal Form 1040 and PA-40 state tax return The Schedule D has been updated to include a digital asset question and to accommodate for like kind exchanges. See the Schedule D instructions for more information and detailed instructions. Student Loan Interest, up to $2,500 per filer, maybe deducted from PA taxable income. The deduction is reported on the Schedule O. Please refer to the Schedule O for more information. The Schedule OC has been significantly redesigned for tax year 2025. The form's layout and structure have changed to enhance usability and processing efficiency. Please refer to the Schedule OC and instructions for more information. The rules regarding grantor trusts have changed. Refer to Page 52 and the PA-41 instructions for more information. A new mailing address for farmers has been established. Refer to page 72 for details. The department has clarified instructions on when to file an amended return to request a refund. Please see Page 70 for more information. myPATH ONLINE SERVICES myPATH provides many self-service options such as registering a new tax account, accurately and securely filing returns, making payments, managing your accounts, and interacting with the department. Visit [mypath.pa.gov](mypath.pa.gov) to access the system, which also allows taxpayers to make payments, view notices, update account information and find the answers to frequently asked questions. E-filing offers advantages not available to taxpayers filing by paper, including error-reducing automatic calculators, prompt confirmation of a successful filing, faster refund processing, and direct deposit options. The 2025 income threshold for when estimated payment were required to be made was $11,000 . The income threshold for 2026 has increased to $14,000 . PURPOSE The Personal Income Tax Preparation Guide’s purpose is to provide preparers with additional information and instructions for the preparation of the PA-40, Personal Income Tax Return. Although it may also be used by individual taxpayers who prepare their own PA-40, the preparation guide was written using language from a preparer’s perspective. Summary Stage When the return(s) is/are completed, you will need to give the taxpayer some additional information. • Have the taxpayer sign and date the return. If filing a paper return and the filing status on the return is Married, Filing Jointly, make sure both taxpayers sign the return. If one taxpayer is not present, remind the taxpayer to have their spouse sign the return. • If there is an overpayment and the taxpayer plans to move, advise the taxpayer to submit a change of address in with USPS and notify the local Department of Revenue district office to have the address updated. (If the refund has already been sent to the State Treasury, the USPS will forward the mail to the taxpayer. ) This will ensure the refund is sent to the appropriate address. • If a bala

FAQs

What is the Working Pennsylvanians Tax Credit (WPTC) and how is it applied to PA-40?

WPTC is a new Pennsylvania state-level tax credit modeled after the federal EITC. The Department of Revenue automatically calculates it based on filing status, income, and number of dependents, applying it to reduce PA taxes or increase the refund.

Why must federal Form 1040 be included with the PA-40 return?

You must include a copy of your federal Form 1040 with your PA-40 tax return. If you qualify for the federal EITC, you automatically qualify for the state credit as well.

What are the key payment and filing options described after the return is completed?

The guide instructs preparers to advise taxpayers on payment options, including using myPATH to make payments, paying by check or money order to the PA Department of Revenue with required SSN digits and tax year on the memo line, and mailing paper returns by midnight on the due date. It also notes that returns can be e-filed using special software and that multiple returns should be mailed separately.

Sep 19, 2026

Upload by Margaret