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Yep, new IPIN in the mail in January every year to use for the new calendar year for any and all returns e-filed/mailed during that calendar year only, including prior year returns and amendments. Not at all easy to explain to clients!

I found out this year that a new PIN is issued every year. I used previous PIN for a client and efile was rejected. As I contacted the client, I reviewed their current year info. I saw that the spouse had written a different PIN down by her signature on the questionnarie form. I used that PIN and return went thru. I had previously been under the impression that the PIN issued was good on going. Not so.

I just sent notice to all my clients who don't have IP PIN's (and who I thought could navigate the ID.me process) encouraging them to sign up. Was a recent statement from the Taxpayer's Advocate Office that it's taking around 20 months to get a refund if someone else files under your SSN. The IRS has gotten pretty good at catching fraudulent returns, but the actual taxpayer's return still can't be e-filed. I gave my clients a heads up about the calendar nature of the IP PIN's--those who sign up now will get a PIN for 2024 that won't be valid for their 2024 return--now that's not confusing, right?

It turns out the NY bakery had no PA income until the second half of 2021 when they earned $600. That's why we didn't file in PA for the partnership in 2020. We filed PA in 2021, and per ex-DIL her new preparer filed PA in 2022 and 2023. So far, PA has asked for only 2020. She was told the base form only and she can upload it for purposes of renewing her license (?) but to mail the return to PA also. I may do it by hand/on fill-in forms, because my biz returns are pay-per-return, and I'm not getting paid. (Yes, part of me wants to charge her, because it's not my fault and she/her mother got everything in the divorce -- house, car, daughters, child support, day care costs even though ex says she doesn't work, no holidays with the girls, his entire Roth, etc. -- but she's the mother of our grandchildren and has kinda kept communication open for the girls sake, or at least because we're now paying their day care and buy things at their school fundraisers!) I should be able to get to this next week. Yes, they've been filing personal PA returns for years. And, had a LT rental house for a few years. I remember following the flow from Federal to PA, especially for depreciation. I've had a few other PA residents that I filed personal PA returns for, but no one other than my son currently and no other PA partnerships since 2021. This one really threw me, because the partnership didn't have any PA business until 2021, and that was the last year I was the partnership preparer. The partnership paid less than $36 in PA sales tax, but had strange quarters: November & December 2021 + January 2022 was due 2/22/2022. The partnership closed for the winter and didn't reopen until the spring, so that year-spanning quarter meant the income was reported in 2021, but the sales tax was paid in 2022. I really hate returning to prior years. I generally charge a premium. Judy, I appreciate your time and research skills and advice and everything you do. A huge thank you! And, thank you to Dennis, too. And for anyone else who has followed my rant.

I just got back to the office and was looking over this thread to make sure all of your points were answered. The PA-20S/PA-65 IS the main Pennsylvania partnership return. If you aren't signing and e-filing as a paid provider/ERO and she is mailing it in, at a minimum the filing will require: Form PA-20S/PA-65 PA Schedules RK-1s for each resident partner and NRK-1 for each nonresident partner. Like the federal, copies of these schedules are to be provided to each partner for use in preparing the individual PA return. PA-65 Schedule M - Reconciliation of Federal Income/Loss to PA Income/Loss Any other schedules that the PA20S/PA-65 line items requires, depending on activities for the year A complete copy of Federal 1065 and all of its attachments including the K-1s and 7004, if one was filed. Sch M has its own set of instructions. This form "classifies" the income for PA purposes and then after that has sections for PA adjustments for items where rules differ from the Federal. Just a couple of examples that many businesses have that differ for PA are bonus depreciation, meals & entertainment, gain on sale of an asset.... I'd suggest more closely reviewing the instructions for the PA20S/PA-65 form, especially beginning on page 5 under "What to File" and on page 7 for detailed instructions for "Assembling ..." that includes the order of attachments since this will be mailed in. You are probably familiar with the PA rule differences from the federal, especially regarding depreciation since you handled the B&B on their personal return too. Wasn't that a PA property too? If you aren't and need an additional resource, you could start with the comprehensive PA PIT Guide for Pass-Thru Entities that has the rules for depreciation, when MACRS can be used and under which rules, bonus depreciation, and sec 179 rules for PA purposes. Have I mentioned lately that I dislike PA returns?

Nexus is a new income stream for states. Wayfair just about killed the PL 86-272 protections given modern way of doing business (email and chat links on a web site). The "fer" instance is a company with physical nexus not in CA/NY/NJ, but a web site with an email or chat button on it which a CA/NY/NJ customer uses. When a CA/NY/NJ customer clicks one of those links, CA/NY/NJ nexus is created! Other states are prepping for similar I hope the result (after legal challenges, which CA FTB has lost so far) will be like sales tax, some sort of somewhat common threshold which will prevent a start up or ongoing small business not to have to deal with US wide nexus and 50 different rules. It makes actual sense as I would not think a state would come after an out of state entity unless it was net profitable for the nexus claiming state.

No business in PA through at least 2020. NYS only. Due to some paperwork she just sent me, it looks like she registered for PA sales tax 7/1/2021 with an Effective Date of 02/04/2022. Don't know if she had any catering contracted in PA coming up in 2021 or 2022, or if she was just preparing to file for divorce and would be working out of her mother's PA restaurant as the partnership by 2022. (She did stop getting W-2s from her mother's PA restaurant by about 2019, so she had about three years of zero income reported when she filed for divorce.) It's possible that the bakery had PA income in the second half of 2021 or in 2022. But not in 2020. As messy as her bookkeeping is, nothing for PA in her 2020 paperwork. I can prepare the PA form with zero PA income and use the reg # she obtained the following year and upload it on my portal for her to sign and mail to PA.

Better late than never? The FAQ on IP PINs changed recently: https://www.irs.gov/identity-theft-fraud-scams/frequently-asked-questions-about-the-identity-protection-personal-identification-number-ip-pin#q22

If the ptnrship delivered the goods or provided services within the state then it was conducting business within the state, and PA wants to know that and would issue a PA business license. I think catering service and/or food and beverage is subject to PA sales tax, but check on this to be sure. Was there employee involvement, possibly working an event, or just delivery of product? Maybe not, but asking to be thorough.

I believe, but do not know, that ex-DIL has had PA clients and is working out of PA since 2022, but she had her mother's preparer for 2022 and 2023. Apparently, she has some type of license that she needs to renew that she cannot until she files the 2020 Form PA-20S/PA-65. CT has something similar, but it's only for CT partnerships/S-corporations to report to all its partners. Not for partnerships in other states to report to its CT partners. CT doesn't require a CT partnership return from a NY partnership; the income flows to the CT residents via their K-1s. I guess it's the coordination with NY reporting that worries me. The partners receive Federal K-1s and NY IT-204-IP. Why would a NY partnership even have a PA ID from the PA DRS? The partners already filed joint PA returns, as well as NY and Federal, with the bakery loss account for on their joint NY and Federal returns. So do all the DE companies with partners and shareholders who live in PA but work only in DE have nexus in PA and have to file partnership and s-corporation returns in PA? PA is worse than NY and CA. I had to fight CA years ago when CA said a CT partnership had CA nexus because a partner lived in CA. The partner had invested some monies to help the 95% partner start the CT company but never did any work in any state at any time for the partnership. We did win that battle and were NOT required to file CA partnership returns. I'm not looking forward to doing more free work for my ex-DIL; her bookkeeping was a nightmare.

The partnership should have filed a PA-65 for any year that they EITHER had PA source income or had PA resident owners for this partnership. That is fairly clear in the "Who should file" section where it seems the partnership meets both the requirement to have had activity within PA during some years AND had PA resident owners. So, if they were PA residents the entire time this partnership existed since 2012, then the partnership should have filed for all of those years and should have also included either schedule RK-1 or NRK-1 depending on PA residency status. It may or may not affect the personal return because PA rules for some deductions differ from the federal, and I am not sure how you would have addressed that without filing the PA partnership returns and allocations of income within and without. Did the partnership register with PA to do business within the state? Hopefully this isn't going to be the opening of a giant can of worms! I can tell you a horror story from my earlier days in practice, not me personally but the firm I worked for. I am also on the border of PA, just west of Wilmington, DE, and I also have clients from all the surrounding states. I'm curious how this came up. I'm sorry, is it because former DIL has a new preparer for 2023 that asked for the back year returns?

Is this going to double their personal/joint return loss in PA, because they already reported the loss that flowed from the 1065 K-1 and the NY equivalent?

I called up the form/instructions as soon as I heard from her. I'm unclear whether only the PA-20S/PA-65 can be filed/mailed as a stand-alone form (it does have a signature block) or if they need a full partnership return when the partnership was not formed in PA and did not operate in PA. What I mean is, does this form flow from the Federal 1065 or from another PA partnership return? By the way, this was a MMLLC taxed as a partnership. (And, I do understand the use of "foreign" when used by states.)

It was a NY partnership. No PA income that year. (Hancock, NY, is on the PA border, so there were times over the past decade+ that they had catering income from PA.) After the divorce, and after my time as their preparer, I think ex-DIL has been working out of her mother's inn/restaurant in PA. But, that's none of my business! But in 2020, it "was a foreign partnership to PA having no income from PA sources but with PA resident owner (foreign to PA = meaning a partnership formed in another state but operating within PA)." I'm in CT and have lots of NY clients (I'm also near a border, so commuters and a few residents) but my son, his then-wife, and the granddaughters were my only PA clients.

Just to be more clear, when reading the instructions for state forms such as this one, the terms "domestic" and foreign" refers to within or without of the state, not domestic or foreign in terms of the USA. Form and its instructions are all in one document. Scroll down below form and see pg 2 of instructions "Who Must File" https://www.revenue.pa.gov/FormsandPublications/FormsforBusinesses/Partnerships-S-Corps-LLCs/Documents/2022/2022_pa-20s-pa-65.pdf

Under what state laws/where was this parnership formed, actually a NY or PA partnership? It makes a difference whether or not it was a domestic partnership (formed in PA) operating bricks/mortar store solely in NY, or was a foreign partnership to PA having no income from PA sources but with PA resident owner (foreign to PA = meaning a partnership formed in another state but operating within PA).

Ex-client is a PA resident who was a partner in a NY partnership (brick & mortar bakery formerly in Hancock, NY). We filed Form 1065 and NY IT-24 and related forms and schedules, including Schedule K-1 and NY IT-204-IP. And for their personal joint return, Form 1040, NY IT-203, and PA 40 with related forms and schedules. Never in what the partners requested or my software diagnostics suggested since 2012 has PA asked for anything else. Now the remaining owner says she needs a 2020 PA Form pa20s-65 filed with PA. For 2020. Should PA-20S/PA-65 been a part of their 2020 returns? Do I need to prepare PA-20S/PA-65 for all years since 2012? Or from 2020 forward? This is my ex-daughter-in law who owned a bakery with my son. Due to their divorce, 2021 was my last year preparing their returns. My son is no longer a partner in that bakery. From at least 2012 through their 2021 returns, I prepared all the business and family returns for free. All advice gratefully accepted.

IIRC, it is a political attempt to keep work locations within AL, rather than a neighboring state. Maybe the first attempt to directly reward for not having out of state remote workers. (And not that different than how GA, for instance, rewards with tax breaks for TV type productions - why so many things are filmed in GA.) I would not call it strange in the payroll world. All seems to be fair game at present (anything goes). Wayfair ruling has emboldened states to cross their borders to gain income, so now a state is at least temporarily rewarding for staying within their borders. With the rise of many min wage to more than double the federal number, employers are wisely looking at lower min wage states to have employees performing services, especially if there is low or no company income tax nexus caused by the remote worker.

Yes, in a strange turn of events, effective 01/01/24 employees that are paid overtime premium have their OT Premium totally exempt - not only from withholding, but from taxation entirely.

They are trying to catchup from a year that was far too lopsided. I have explained the need to even it out, but cash flow has prevented them from retifying the issue all in one shot. Dad is the one being shortchanged by the son. He's knows he's losing value each day they don't even it out.

Why does this continue to happen? Is there comingling of personal and business expenses for one or both of them being paid from the s corp? If so, advise that stop immediately. If it is really just unequal cash distributions, suggest a bookkeeping analysis shortly before year-end and settle up between the two before the year closes. Is the owner receiving the lesser amount aware to the extent he or she is being shorted? It may not be intentional to the size of the amount, but sometimes seemingly smallish differences do add up over time.

Thanks @Abby Normal. Year after year, I have reminded them of this, and the potential fallout should they not follow these rules. You can lead a horse to water .....

I agree completely. I have some clients - US citizens - who were living abroad when their kids were born and did not get SSNs for the kids right away when they returned. Missed some dependent credits and child tax credits; they were not very happy that no one, when they were planning their return, warned them.

https://www.revenue.alabama.gov/faqs/are-any-employees-exempt-from-withholding-tax/ Are any employees exempt from withholding tax? Yes, the chief classes of exempt employment are domestic services in private homes, merchant seamen, duly ordained ministers performing duties of their ministry, and agricultural employees. Although these wages are exempt from withholding tax requirements, the wages do represent taxable income and should be reported by the employee on their individual income tax return. Employers should provide both the employee and the Department with a copy of Form W2 reflecting the wages earned by the employee for that year. For more information on these classes of exemption, please see page 2 of the Withholding Tax Tables and Instructions for Employers.

Yup, but an ATIN is only good for ODC and CDCC, not CTC or EIC. And it was good for the Recovery Rebate Credit, which I forgot about. But the RRC also required that the SSN or ATIN be issued (or at least applied for) by the due date, so amending won't get you that either.