Help - Filing Instructions
PA Schedule UE
Line 1B - Unreimbursed Employee Business Expenses - Long Form
What Unreimbursed Employee Business Expenses
Does Pennsylvania Allow?
Allowable employee business expenses for PA purposes are similar, but not
exactly the same, as expenses for federal purposes. An allowable PA employee
business expense must be:
- Ordinary, customary and accepted in the
industry or occupation in which you work; and
- Actually paid while performing the duties of
your employment; and
- Reasonable in amount and not excessive; and
- Necessary to enable you to properly perform
the duties of your employment; and
- Directly related to performing the duties of
your occupation or employment.
If your employer does not reimburse you, you
may reduce your compensation by your allowable expenses.
- You may deduct 100 percent of your PA
allowable unreimbursed employee business expenses.
- PA law does not have federal expense and
percentage accounting limitations and thresholds.
Note: The Department has the legal authority to
require evidence that the expenses you claim on a PA Schedule UE are allowable
for PA purposes. The Department may ask that you substantiate the amount and
nature of your business expenses. Keep your necessary documents, receipts,
vouchers, and other records for at least four years. You must be able to prove
that your expenses are ordinary, actual, reasonable, and necessary.
You did not incur an allowable business expense during the year if you:
- Received a fixed mileage allowance or a per
diem allowance for allowable expenses, and neither you, nor your employer,
included the allowance in your compensation; or
- Accounted for your allowable expenses to
your employer and your employer reimbursed you in the exact amount of your
- Do not include such reimbursements in gross
- Do not claim such expenses on a PA Schedule
If your reimbursement is more than your
allowable expenses, you must report the excess as taxable compensation on Line
- Example: Dave earned compensation of
$30,000. He incurred allowable vehicle and travel employee business expenses
of $3,000, and was reimbursed $3,500. He must complete a PA Schedule UE. He
includes the excess $500 as compensation. His total net taxable compensation
Sole proprietors, partners, shareholders, or
other self-employed individuals do not use PA Schedule UE to claim expenses.
Nonresidents who earn compensation and incur allowable employee business
expenses both within and outside Pennsylvania may need to complete and file a PA
Schedule NRH, which is not allowable on padirectfile.
Pennsylvania does not allow the following expenses, even if allowed for federal
- Personal, living, or family expenses
- Dues to fraternal organizations,
professional societies, Chambers of Commerce, or recreational club memberships
- Dues and subscriptions to publications,
including trade and professional publications
- Political candidate or campaign
- Charitable contributions
- Commuting expenses
- Cost of meals while working late, unless
while traveling away from home overnight on business
- Child care or elderly care expenses
- Life, disability income, and health
- Contributions to deferred compensation plans
or other pension plans
- Legal fees (except to recover back wages),
fines, penalties, and bad debts
- Bribes, kickbacks, or other illegal payments
- Job hunting or other pursuit of employment
- Malpractice insurance premiums, except when
allowed in Part A
- Moving expenses, except when allowed in Part
- Educational expenses, except as allowed in
- Capital expenditures. Depreciation may be
allowable in determining expenses. Federal depreciation or cost recovery
deductions are acceptable for computing allowable business expenses.
- Enter your name and SSN. If married, enter
the name and SSN of the spouse claiming the expenses.
- Enter all the employer information, and
briefly describe the job or position for which you incurred the expenses you
- You must file a separate PA Schedule UE for
- Spouses may not report joint expenses on a
PA Schedule UE, even if filing jointly.
For detailed information, if you have a job or
a profession in which you perform the same services, but receive Forms W-2 from
more than one employer, review PA PIT GUIDE.
Part A -- Direct Employee Expenses
You pay these expenses directly or through a withholding arrangement with your
employer. These expenses are necessary to perform or maintain your job.
Union dues, assessments, and initiation fees are allowable business expenses if:
- Such payments are a condition of continued membership in the union, and
membership is related directly to your present job; or
- Such payments are a required wage deduction under an agency shop
Work Clothes and Uniforms
The costs of purchasing and maintaining uniforms and work clothing to protect
you from bodily injury are allowable business expenses if the uniforms and
clothing are both:
- Needed for your employment; and
- Not suitable for everyday use.
Small Tools and Supplies
Expenditures for small tools and supplies that are needed for your employment
and not provided by your employer.
- If any of these tools or supplies has a useful life of more than one year,
you must depreciate or amortize the cost in Part F below.
You may currently expense the item if allowable under IRC Section 179.
Professional License Fees, Malpractice Insurance, and Fidelity Bond Premiums
Trade, you can include professional, or occupational licenses or fees that are
required as a condition of employment are allowable business expenses. Include
malpractice insurance and fidelity bond premiums where required by law or by
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