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PA source

Onvio Tax does not treat capital gains distributions as state source by default. To code them as state source, go to the federal Income screen and use postal code PA in the Capital gains or (losses) statement.

Capital gains and dividends

Pennsylvania taxes capital gain distributions as dividends, not gains. The state requires capital gains distributions to be shown separately from ordinary dividends. You can enter capital gains distributions in the statement on the PA K1 and K1T screens.  The application combines capital gains distributions with dividends on the Income Allocation worksheet.

Undistributed long-term gains

Per PA PIT Ruling No. PIT-99-004, 01/21/1999, PA does not tax undistributed long-term capital gains from federal Form 2439.

Tangible gains

Per the Pennsylvania Department of Revenue, the only gains that can be passed out to nonresident beneficiaries are tangible gains. To do this, you must mark the Tangible column in the Capital gains or (losses) field on the federal Income screen.

Pennsylvania overview (1041)