{"id":6440,"date":"2018-12-10T11:51:00","date_gmt":"2018-12-10T16:51:00","guid":{"rendered":"http:\/\/resources.evans-legal.com\/?p=6440"},"modified":"2018-12-10T11:51:02","modified_gmt":"2018-12-10T16:51:02","slug":"possible-change-to-pa-taxation-of-ird","status":"publish","type":"post","link":"https:\/\/resources.evans-legal.com\/?p=6440","title":{"rendered":"Possible Change to Pa. Taxation of IRD"},"content":{"rendered":"\n<p><a href=\"http:\/\/resources.evans-legal.com\/?p=4954\">I have previously written<\/a> that the Pa. Department of Revenue does not consider &#8220;income in respect of a decedent&#8221; to be subject to Pa. income tax, but the Department may be changing its position on the taxation of IRD, because the instructions to Form PA-40 for 2017 were different from the instructions for 2016.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The instructions for PA-40 (for individuals) now includes the following statement about types of income that are NOT taxable:&nbsp; \u201cInheritances, death benefits, and income in respect of a decedent (IRD) as defined for federal income tax purpose for purposes of compensation (NOTE: IRD may be subject to the PA PIT in a class of income other than compensation).\u201d&nbsp; The \u201cfor purposes of compensation\u201d is new, as is the &#8220;note&#8221; in parentheses.&nbsp; But even the parenthetical says that IRD other than compensation \u201cmay\u201d be subject to tax, and not \u201cis\u201d subject to tax.<\/li><li>The PA-40 instructions also contain a cross-reference to the PA Personal Income Tax Guide, the on-line version of which was last revised on 8\/24\/2012, and continues to include the statements quoted above.<\/li><li>More importantly, there is no similar change to the instructions to Form PA-41, for estates and trusts.&nbsp; &nbsp;Those instructions continue to state that compensation received post-death is not taxable, which is consistent with the PA-40 instructions.&nbsp; The only other reference to IRD is in instructions on withholdings, which refers to \u201cincome in respect of a decedent (not taxable for estate or trust income tax purposes, but includable in the value of an estate for inheritance tax purposes).\u201d&nbsp;<\/li><\/ul>\n\n\n\n<p>There has therefore been a change to the instructions to Form PA-40, but no change to instructions for Form PA-41, and (more importantly), no change to the PA Personal Income Tax Guide.\u00a0 Whether the change in the PA-40 instructions represents the beginning of a change in policy, or a errant deviation, still isn&#8217;t clear.<\/p>\n\n\n\n<p>This information has been added to the article <a href=\"http:\/\/resources.evans-legal.com\/?p=4954\">&#8220;Pennsylvania Taxation of Income in Respect of a Decedent,&#8221;<\/a> along with information on the income tax treatment of annuities that continue to be payable after death.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>I have previously written that the Pa. Department of Revenue does not consider &#8220;income in respect of a decedent&#8221; to be subject to Pa. income tax, but the Department may be changing its position on the taxation of IRD, because &hellip; <a class=\"more-link\" href=\"https:\/\/resources.evans-legal.com\/?p=6440\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"pmpro_default_level":"","footnotes":""},"categories":[29],"tags":[614,615],"class_list":["post-6440","post","type-post","status-publish","format-standard","hentry","category-news-items","tag-income-in-respect-of-a-decedent","tag-pennsylvania-personal-income-tax","pmpro-has-access"],"_links":{"self":[{"href":"https:\/\/resources.evans-legal.com\/index.php?rest_route=\/wp\/v2\/posts\/6440","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/resources.evans-legal.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/resources.evans-legal.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/resources.evans-legal.com\/index.php?rest_route=\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/resources.evans-legal.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6440"}],"version-history":[{"count":1,"href":"https:\/\/resources.evans-legal.com\/index.php?rest_route=\/wp\/v2\/posts\/6440\/revisions"}],"predecessor-version":[{"id":6441,"href":"https:\/\/resources.evans-legal.com\/index.php?rest_route=\/wp\/v2\/posts\/6440\/revisions\/6441"}],"wp:attachment":[{"href":"https:\/\/resources.evans-legal.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6440"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/resources.evans-legal.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6440"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/resources.evans-legal.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6440"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}