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. Business Travel Expenses
Vehicle Expenses: Standard Mileage Rate
- The amount from Line 22 of your Form 2106 or
Line 1 of your Form 2106-EZ, or
- Your business miles and the federal mileage
If you cannot or do not file a Federal Form 2106 or Form 2106-EZ, follow the
federal rules for determining your allowable expenses. The standard mileage
allowance for the period of January 1, 2014 to December 31, 2014 is $.56 (56 cents).
Important: Commuting costs to and from any job are not allowable for PA
Vehicle Expenses: Actual
You may always claim your allowable actual expenses for PA purposes. Start with
your federal form and adjust for PA purposes.
Pennsylvania does not follow the federal limitations on allowable expenses.
- Enter your actual expenses from your Form
- Add back the “Inclusion Amount.” This rule
does not apply for PA purposes. This is the amount you incurred but could not
deduct on federal Form 2106 because of federal limitations such as meals and
entertainment expenses while away from home.
Optional Depreciation. You may use any generally accepted depreciation method.
If using a different method for PA purposes, enter the method you used and the
adjusted expense here. You may not use federal bonus depreciation.
Actual Vehicle Expenses will be calculated for you.
Other Business Travel Expenses
Enter the actual amount of these expenses that you incurred, or the amount from
your Form 2106 or Form 2106-EZ.
- Parking Fees, Tolls, and Transportation
- Travel expenses while away from home overnight
- Meals and Entertainment Expenses
- Expenses for business meals, entertainment,
and away from home are 100 percent allowable.
- Total Business Travel Expenses will be
calculated for you.
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