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PA P-S KOZ (DR) 10-21
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                                                                     SCHEDULE P-S KOZ                              REVENUE ID (PA S CORP)
COMMONWEALTH OF PENNSYLVANIA 
DEPARTMENT OF REVENUE
        CALCULATION OF PA KEYSTONE OPPORTUNITY ZONE (KOZ) AND STRATEGIC DEVELOPMENT AREA (SDA)- 
                                             EXEMPT INCOME FOR PARTNERS AND SHAREHOLDERS

Partnership/PA S Corporation Name 

                KOZ EXEMPTION OF INCOME CALCULATION                                  SDA EXEMPTION OF INCOME CALCULATION
    NOTE: Check the appropriate box for the type of income exemption. The SDA-exempt income calculation is the same as the KOZ-exempt 
 income calculation unless otherwise indicated in the instructions. An SDA entity should substitute SDA whenever/wherever KOZ is referenced 
 in these instructions for the calculation of its exempt income, unless separate SDA instructions are included. Additionally, all references to 
 Keystone Opportunity Zones (KOZ) in this document encompass and are synonymous with Keystone Opportunity Expansion Zones (KOEZ), 
 Keystone Opportunity Improvement Zones (KOIZ) and Additional Keystone Opportunity Expansion Zones (AKOEZ). Unless otherwise 
 noted in these instructions, all singular references to KOZ include KOEZ, KOIZ and AKOEZ. The KOZ income exemption also encompasses the 
 extension of the expiration dates for unused parcels within each of the previously mentioned zones as well as the expansion and/or addition 
 of Keystone Opportunity Expansion Zones as per Act 16 of 2012.
Generally, partners and shareholders do not claim exemptions for the               exempt income in each PA class of income. Subtract Column B from 
partnership’s or PA S corporation’s KOZ source income on individual                Column A for each line and enter the amounts in Column C. 
income tax returns. Exceptions may apply if a partner or shareholder is a 
resident of a KOZ, in which case the individual should call 717-787-1064           For Column D, carry over the amounts from Column C that are taxable 
to inquire about Schedule KOZ Supplemental Instructions. The partnership           to PA resident owners. For Column E, carry over the amounts from 
or PA S corporation (entity) must use Schedule P-S KOZ to calculate                Column C that are taxable to nonresident owners. 
KOZ-exempt income. The entity then excludes each partner or share-                 Attach the completed PA Schedule P-S KOZ (with supporting worksheets) 
holder’s (owner’s) share of the KOZ-exempt income from the income                  to the entity’s PA 20-S/PA-65 Information Return. 
reported on each owner’s PA Schedule RK-1 or NRK-1. 
                                                                                   IMPORTANT: If the entity does not have nonresident owners, comple-
Enter the classified income from the PA-20S/PA-65 information return in            tion of Lines 2, 6, 8, 10, 12 and 15 is not required, nor are 
Column A. Enter the KOZ-exempt income in Column B. Use the appropriate             corresponding worksheets.
instructions and worksheets on the following pages to determine KOZ-
                                                                     Column A      Column B      Column C               Column D         Column E 
                                                                     PA-Reportable KOZ/SDA-      PA-Taxable Income PA Resident Owner PA Nonresident Owner 
                                                                     Income        Exempt Income (Col. A – Col. B) Taxable Income    Taxable Income
 Line 1 – Total Adjusted Business Income or Loss from the 
 Operation of a Business, Profession or Farm 
 Line 2 – Total Adjusted/Apportioned Net Operating Income or Loss 
 Line 3 – PA Taxable Interest Income 
 Line 4 – PA Taxable Dividend Income 
 Line 5 – Net Gain or Loss from the Sale, Exchange or Disposition 
 of Property 
 Line 6 – Allocable Net Gain or Loss from the Sale, Exchange or 
 Disposition of Tangible Personal or Real Property 
 Line 7 – Net Income or Loss from Rents,  
 Royalties, Patents and Copyrights 
 Line 8 – Allocable Net Income from Rents, Royalties, Patents and  
 Copyrights in PA 
 Line 9 – Estate or Trust Income 
 Line 10 – Allocable Estate or Trust Income 
 Line 11 – Gambling and Lottery Winnings 
 Line 12 – Allocable Gambling and Lottery Winnings 
 Line 13 – Guaranteed Payments for Capital or Other Services  
 Line 14 – All Other Guaranteed Payments for Services Rendered 
 (Resident Partners)  
 Line 15 – Allocable All Other Guaranteed Payments for Services 
 Rendered (Nonresident Partners) 
 Line 16 – Distributions of Cash, Marketable Securities and Property 
                                                                                   DO NOT ENTER AMOUNTS IN SHADED AREAS.
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COLUMN A INSTRUCTIONS

Line 1. Total Adjusted Business Income or Loss from the A. Operation Wholly Inside a KOZ. If the operation of a qualified
Operation of a Business, Profession or Farm – Enter business is wholly inside the KOZ, the entity allocates its net
the amount from Line 1e on Form PA-20S/PA-65. profit or loss exclusively to the KOZ. The operation of a business
Line 2. Total Adjusted/Apportioned Net Operating Income is wholly inside the KOZ if during the entire taxable year:
or Loss – Enter the amount from Line 2h on Form 1. The entity or its representative maintained or operated
PA-20S/PA-65. inside the KOZ an office, shop, store, warehouse, factory,
Line 3. PA Taxable Interest Income – Enter the amount from agency or commercial establishment where it systematically
Line 3 on Form PA-20S/PA-65. and regularly conducted or managed such business; and
Line 4. PA Taxable Dividend Income – Enter the amount from 2. The entity or its representative did not maintain or operate
Line 4 on Form PA-20S/PA-65. outside the KOZ any office, shop, store, warehouse, factory,
agency or commercial establishment where it systematically
Line 5. Net Gain or Loss from the Sale, Exchange or and regularly conducted or managed such business. The
Disposition of Property – Add the amounts from Lines 5a entity or its representative also did not: employ individuals
and 5b on Form PA-20S/PA-65 and enter the total here. who solicited sales outside the KOZ; make installations of
Line 6. Allocable Net Gain or Loss from the Sale, Exchange or repairs to the products sold outside the KOZ; repair,
or Disposition of Tangible Personal or Real Property improve or service real or personal property of the cus-
– Enter the amount from Part I, Line 18 on PA-20S/PA-65 tomer at a location outside the KOZ; or provide services to
Schedule D-I. a customer or client when the income-producing activity
Line 7. Net Income or Loss from Rents, Royalties, Patents was performed outside the KOZ.
and Copyrights – Add the amounts from Lines 6a and 6b For a qualified business wholly operated inside a KOZ that
on Form PA-20S/PA-65 and enter the total here. has no taxable income from other entities (Line 1b of Form
Line 8. Allocable Net Income from Rents, Royalties, PA-20S/PA-65 is blank), all of the PA-reportable business
Patents and Copyrights in PA – Enter the amount income is KOZ-exempt income. Enter the amount from
from Line 6b on Form PA-20S/PA-65. Column A, Line 1 in Column B, Line 1. The entity must also
Line 9. Estate or Trust Income – Add the amounts from Lines complete Worksheet 1 to calculate the exempt business
7a and 7b on Form PA-20S/PA-65 and enter the total here. income under KOZ law.
Line 10. Allocable Estate and Trust Income – Enter the amount If the entity receives business income from other entities, do
from Line 7b on Form PA-20S/PA-65. not include the income from other entities in the amount shown
Line 11. Gambling and Lottery Winnings – Add the amounts in Column B, Line 1. In such cases, a partnership enters in Col-
from Lines 8a and 8b on Form PA-20S/PA-65 and enter the umn B, Line 1 the amount from Line 1a of Form PA-20S/PA-65,
total here. and a PA S corporation enters in Column B, Line 1 the amount
from Line 1e of Form PA-20S/PA-65, less the amount from Line
Line 12. Allocable Gambling and Lottery Winnings – Enter the 1b of Form PA-20S/PA-65.
amount from Line 8b on Form PA-20S/PA-65.
Line 13. Guaranteed Payments for Capital or Other Services – B. Operation Wholly Outside a KOZ. If the operation of the
Enter the amount from Line 16 of PA-20S/PA-65. business is wholly outside a KOZ, the entity cannot allocate or
apportion to the KOZ any item of revenue, loss, cost or expense
Line 14. All Other Guaranteed Payments for Services it derives or incurs. The operation of a business is wholly out-
Rendered (Resident Partners) – Enter the amount from side a KOZ if during the taxable year the entity is not a qualified
Line 17 of PA-20S/PA-65. business, because it does not own or lease an office, shop,
Line 15. Allocable All Other Guaranteed Payments for store, warehouse, factory, agency or commercial establishment
Services Rendered (Nonresident Partners) – Enter the within the geographical boundaries of a KOZ. In this situation,
total amount of the nonresident partners guaranteed pay- do not enter any amount in Column B, Line 1.
ments included in Line 17 of the PA-20S/PA-65.
C. Operation Partly Inside a KOZ. An entity that operates a
Line 16. Distributions of Cash, Marketable Securities and qualified business, profession or farm neither wholly inside nor
Property – Enter the amount from Line 15 or 20 on Form outside a KOZ is defined as partly inside a KOZ. The entity must
PA-20S/PA-65 for partnership and S corporations, then determine if the business income is derived only from
respectively. sources within PA or derived from sources inside and outside PA.
Follow the instructions for determining the sources of income:
COLUMN B INSTRUCTIONS
Line 1. Total Adjusted Business Income or Loss from the 1. Business Income Derived only from Sources Inside
Operation of a Business, Profession or Farm – Determine the PA. An entity must complete Worksheet 1 to determine
amount of income exempt from taxation. If an entity realizes a net the exempt portion of business income under KOZ law.
loss, do not calculate KOZ-exempt income. Enter a zero in Column B, Worksheet 1 uses the apportionment method for deter-
Line 1. If the entity has no guaranteed payments reportable in mining the exempt business income. Use the instructions
Column A, Lines 14 and 15, proceed to the instructions for Column B, for the accompanying Worksheet 1 to calculate the exempt
Line 2. Partnerships with guaranteed payments may be required to net profits under the KOZ law.
complete Worksheet 1. See the instructions for Column B, Lines 14 2. Business Income Derived from Sources Both Inside
and 15, for additional information. and Outside PA. An entity receiving income from sources
Also determine if the entity operates wholly within a KOZ, wholly inside and outside PA must complete PA-20S/PA-65
outside a KOZ or partly within a KOZ. In addition, determine if the Schedule H to apportion its income to PA before determining
entity’s business income is derived only from sources inside PA or the amount of business income derived from sources
from sources inside and outside PA. If the entity owned and operated inside PA. Use the apportioned PA-source income from
a qualified business profession or farm inside a KOZ, you must apply PA-20S/PA-65 Schedule H in conjunction with Worksheet 1
the rules under sections A, B or C below to determine the portion to determine the exempt portion of the business income
of the business operation inside the KOZ and to calculate the under KOZ law. Enter the income amount from Line 7 of
KOZ-exempt income. PA-20S/PA-65 Schedule H on Line 6 of Worksheet 1.

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COLUMN B INSTRUCTIONS (continued)
Use the instructions for the accompanying Worksheet 1 to controlled is not in any location in which some part of the
calculate the exempt net profits under the KOZ law. service is performed but the person’s residence is inside
Include PA-20S/PA-65 Schedule H along with the PA the KOZ.
Schedule P-S KOZ.
Divide the amount in Box ii by the amount in Box i and enter the
NOTE: Separate accounting may only be used upon written result in Box iii. Calculate the factor to six decimal places.
request to and approval by the PA Department of Revenue.
Line 3. Sales Factor.
Line instructions for Worksheet 1 NOTE: As a result of Act 79 of 2008, the sales factor is not required
Line 1. Property Factor. The property factor is a fraction deter- to be calculated for KOZ, KOEZ, KIZ or AKOEZ entities for tax years
mined by dividing the average historical cost of property located beginning after Dec. 31, 2008. Worksheet 1, Line 3 should be left
inside the KOZ by the average historical cost of property located blank for all such entities. Amended returns for tax years ending on
inside all of PA. In Box i, enter the average value of the entity’s real or before Dec. 31, 2008, must include this factor. The sales factor
and tangible personal property owned or rented by and used in PA must be calculated for SDA entities only.
during the tax period. In Box ii, enter the average value of the entity’s
real and tangible personal property owned or rented by and used The sales factor is a fraction determined by dividing the amount of
inside the KOZ during the tax period. Rental property is valued by sales inside the SDA by the amount of sales in all of PA. Enter in
multiplying the gross rents paid during the taxable year by 8. Divide Box i, the total sales of the entity in PA during the tax period. Enter
the amount in Box ii by the amount in Box i and enter the result in in Box ii, the total sales of the entity inside the SDA during the tax
Box iii. Calculate the factor to six decimal places. period. Sales inside an SDA include sales of tangible personal prop-
Line 2. Payroll Factor. The payroll factor is a fraction determined erty and other property if:
by dividing the amount of payroll inside the KOZ by the amount of a. The sales of tangible personal property are delivered to a
payroll in all of PA. In Box i, enter the total compensation paid in purchaser inside the SDA regardless of the F.O.B. point or other
PA during the tax period by the entity. In Box ii, enter the total conditions of sale;
compensation paid in the KOZ during the tax period by the entity. b. The sales of property other than sales of tangible personal
Compensation is paid in a KOZ if: property are from an income-producing activity performed
a. The person’s service is performed entirely inside the KOZ; inside the SDA; or
b. The person’s service is performed inside and outside the c. The sales of property other than sales of tangible personal
KOZ but the service performed outside the KOZ is incidental property are from an income-producing activity performed
to the service inside the KOZ; inside and outside the SDA and a greater proportion of the
c. Some of the service is performed inside the KOZ and the income-producing activity is performed inside the SDA than in
base of operations or, if there is no base of operations, the any other location, based upon costs of performance.
place from which the service is directed or controlled is
inside the KOZ; or Divide the amount in Box ii by the amount in Box i and enter the
result in Box iii. Calculate the factor to six decimal places.
d. Some of the service is performed inside the KOZ and
the base of operations from which service is directed or Lines 4, 5, 6 and 7. See the instructions on Worksheet 1.
WORKSHEET 1 (for Column B, Line 1)
QUALIFIED BUSINESS, PROFESSION OR FARM
Factors i ii iii
Inside Pennsylvania Inside KOZ/SDA Apportionment Factors (ii divided by i)
1. Enter the average value of real and
tangible personal property. .
2. Enter the amount of wages, salaries
and compensation paid. .
3. Enter the amount of sales.
(SDA only) .
4. TOTAL - Add the decimals from 1, 2 and 3 in Box iii.
.
5. Apportionment Factor - Divide Line 4 by 3 if all three factors apply; by 2 if only two factors apply; or by 1 if only one
factor applies. Express in a decimal. .
6. For partnerships, enter net profits from Line 1a of PA-20S/PA-65 or Line 7 of PA-20S/PA-65 Schedule H (if required to
apportion to PA). For PA S corporations, enter net profits from Line 1e of PA-20S/PA-65 less Line 1b of PA-20S/PA-65,
or Line 7 of PA-20S/PA-65 Schedule H less Line 1b of PA-20S/PA-65 (if required to apportion to PA).
7. Exempt KOZ/SDA Business Income. Multiply Line 6 by Line 5. Enter this amount on Column B, Line 1 of this schedule.

Line 2. Apportioned Net Qualified Business Income or Loss. Line 3. PA Taxable Interest Income. Under the provisions of KOZ
Determine income attributable to PA sources and exempt from tax- law, interest is exempt for PA personal income tax only if received
ation. If the entity realized a net loss in Column A, Line 1, and by a resident of a KOZ. Do not enter any amount in Column B, Line
Column A, Line 2, or if the entity has no nonresident owners, the 3. The KOZ resident owner claims an exemption for this income upon
entity does not need to calculate KOZ-exempt income from PA filing a PA individual income tax return (PA-40 KOZ).
sources and may enter zeros on Line 2 for Columns B, C and E. If
the entity realized a net profit, enter the amount from Column B, Line 4. PA Taxable Dividend Income. Under the provisions of KOZ
Line 1 of this schedule in Column B, Line 2. law, dividends are exempt from PA personal income tax only if received
by a resident of a KOZ. Do not enter any amount in Column B, Line 4.
NOTE: Separate accounting may only be used upon written request The KOZ resident owner claims an exemption for this income upon
to and approval by the PA Department of Revenue. filing a PA individual income tax return (PA-40 KOZ).

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COLUMN B INSTRUCTIONS (continued)
Line 5. Net Gain or Loss from the Sale, Exchange or Disposition of the date of ownership or eligibility. If an entity makes a sale,
of Property. An entity must determine if the property sold, exchanged exchange or disposition of such property that straddles a KOZ,
or disposed of was tangible personal property, real property or intangible include a statement showing the method that reasonably and accu-
property. Generally, an entity may only exempt income from the sale of rately reflects the value of the property inside and outside the KOZ
tangible personal or real property. However, owners who are residents and provides the amount of gain or loss attributable to the property
of a KOZ may also exempt the income from the sale of intangible inside and outside the KOZ. If the entity reported a gain in Column B,
property. See the rules relating to intangible property below for Line 5, Worksheet 2 must be completed for each sale of tangible
additional information regarding exemption of gains from intangible personal or real KOZ property.
property. If an entity realized a net loss in Column A, Line 5, do not
calculate KOZ-exempt income. Enter a zero in Column B, Line 5, and Intangible Personal Property. Under the provisions of the KOZ
proceed to the instructions for Column B, Line 6. If the entity realized law, only residents of a KOZ are entitled to claim exemptions
a net gain, see the following rules relating to tangible personal or against net gains (less net losses) from the sale, exchange or
real property and intangible property to determine what portion of disposition of intangible property. Do not exclude gain or loss for
the net gains reported during the tax period may be exempted: this income item when reporting each owner’s share of income on
Tangible Personal or Real Property. Net gains from the sale, Form PA-20S/PA-65 Schedule RK-1. Each owner who satisfies the
exchange or disposition of tangible personal or real property owned residency requirements under the KOZ law will be able to claim the
by the entity must be physically located inside a KOZ to be exempt exemption for this income upon filing of a PA individual income tax
under KOZ law. Whenever an entity makes a sale, exchange or return (PA-40 KOZ). The entity will be required (upon request by a
disposition of such property, it must calculate the exempt portion of KOZ resident owner) to provide all information necessary for the
the gain for the period when the property was owned and located owner to report the sale and calculate the exempt portion of the
inside a KOZ during the effective date of the KOZ law from the later net gains from the entity’s sale of the intangible property.

WORKSHEET 2 (for Column B, Line 5)
SALE, EXCHANGE OR DISPOSITION OF TANGIBLE PERSONAL OR REAL KOZ PROPERTY
Complete a separate worksheet for each sale.

Description and/or address of the KOZ property sold, including its tax parcel ID number:

a. If the property was acquired after the date(s) in parenthesis for the type of zone and was located inside:
a KOZ (12/31/98); a KOEZ (12/31/00 or 12/31/09); a KOIZ (12/31/02 or 12/31/09); an SDA (12/31/06);
or an AKOEZ (12/31/09 or 12/31/13), and was eligible for KOZ benefits for the entire time it was owned,
enter the gain or loss here. a.
b. If the property was acquired prior to 1/1/99 (KOZ), 1/1/01 or 1/1/10 (KOEZ), 1/1/03 or 1/1/10 (KOIZ),
1/1/07 (SDA) or 1/1/10 or 1/1/14 (AKOEZ), or if it was located outside of a KOZ/KOEZ/KOIZ/SDA/AKOEZ
during the ownership period, follow the steps below.
1. Enter the number of days the property was owned from the later of the date of ownership or eligibility inside a
KOZ since 1/1/99, inside a KOEZ since 1/1/01 or 1/1/10, inside a KOIZ since 1/1/03 or 1/1/10, inside an
SDA since 1/1/07, or inside an AKOEZ since 1/1/10 or 1/1/14. 1.
2. Enter the total number of days the property was owned. 2.

3. Apportionment Factor. Divide Line 1 by Line 2. Calculate the factor to six decimal places. 3. .
4. Enter the gain or loss on the sale of the property. 4.
5. Multiply Line 4 by Line 3. 5.
If the entity sold only one article of KOZ property, enter the amount from this worksheet in Column B, Line 5. If a loss, enter zero in Column B, Line 5.
If the entity sold more than one article of real or tangible personal property located in a KOZ, first total the amounts from all Worksheet 2 forms, then enter
the net result in Column B, Line 5. If a net loss, enter zero in Column B, Line 5.

NOTE: When reporting the distributive share of income on Form being sold, add the amounts from each Worksheet 2, Line 5 and enter
PA-20S/PA-65 Schedule RK-1 for each owner, only exclude the KOZ- the amount in Column B, Line 5 of the Schedule P-S KOZ.
exempt income from each particular owner’s income if the property Line 6. Allocable Net Gain or Loss from the Sale, Exchange or
was held by the entity during the period of time the owner held an Disposition of Tangible Personal or Real Property. Determine
ownership interest in the entity. If the asset sold, disposed of the net gain or loss attributable to the sale, exchange or disposition
or exchanged was purchased by an entity before the owner held an of tangible personal or real property from PA sources that is exempt
ownership interest in the entity and the asset sold, disposed of or from taxation. If the entity realizes a net loss in Column A, Line 5
exchanged was purchased before or after the entity became eligible and Column A, Line 6, or if the entity has no nonresident owners, the
under the requirements of the KOZ law, the exempt portion of any gain entity does not need to calculate KOZ-exempt income from PA
or loss for the owner must be adjusted to reflect only the exemption of sources and may enter zeros on Line 6 for Columns B, C and E. If
the net gain or loss attributable for the owner’s period of ownership in the entity has nonresident owners and realizes net gains from the
the KOZ entity. sale, exchange or disposition of tangible personal or real property,
enter the amount from Column B, Line 5, of this schedule in Column
A separate Worksheet 2 is required for each property sold located in B, Line 6. If the entity realizes a net loss in Column A, Line 5 but
a KOZ. Enter the amount from Line 5 of Worksheet 2 in Column B, realizes a net gain in Column A, Line 6, calculate the exemption by
Line 5 of the Schedule P-S KOZ. If more than one Worksheet 2 was completing a separate Worksheet 3 for each sale of tangible personal
completed as a result of more than one property located in a KOZ or real KOZ property.

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COLUMN B INSTRUCTIONS (continued)

WORKSHEET 3 (for Column B, Line 6)
SALE, EXCHANGE OR DISPOSITION OF TANGIBLE PERSONAL OR REAL KOZ PROPERTY
Complete a separate worksheet for each sale.

Description and/or address of the KOZ property sold, including its tax parcel ID number:

a. If the property was acquired after the date(s) in parenthesis for the type of zone and was located inside:
a KOZ (12/31/98); a KOEZ (12/31/00 or 12/31/09); a KOIZ (12/31/02 or 12/31/09); an SDA (12/31/06);
or an AKOEZ (12/31/09 or 12/31/13), and was eligible for KOZ benefits for the entire time it was owned,
enter the gain or loss here. a.
b. If the property was acquired prior to 1/1/99 (KOZ), 1/1/01 or 1/1/10 (KOEZ), 1/1/03 or 1/1/10 (KOIZ),
1/1/07 (SDA) or 1/1/10 or 1/1/14 (AKOEZ), or if it was located outside of a KOZ/KOEZ/KOIZ/SDA/AKOEZ
during the ownership period, follow the steps below.
1. Enter the number of days the property was owned from the later of the date of ownership or eligibility inside a
KOZ since 1/1/99, inside a KOEZ since 1/1/01 or 1/1/10, inside a KOIZ since 1/1/03 or 1/1/10, inside an
SDA since 1/1/07 or inside an AKOEZ since 1/1/10 or 1/1/14. 1.
2. Enter the total number of days the property was owned. 2.

3. Apportionment Factor. Divide Line 1 by Line 2. Calculate the factor to six decimal places. 3. .
4. Enter the gain or loss on the sale of the property. 4.
5. Multiply Line 4 by Line 3. 5.
If the entity sold only one article of KOZ property, enter the amount from this worksheet in Column B, Line 6. If a loss, enter zero in Column B, Line 6.
If the entity sold more than one article of real or tangible personal property located in a KOZ, first total the amounts from all Worksheet 3 forms, then enter
the net result in Column B, Line 6. If a net loss, enter zero in Column B, Line 6.

NOTE: When reporting the distributive share of income on Form production or collection of such rents are allocable to a KOZ only
PA-20S/PA-65 Schedule RK-1 for each owner, only exclude the if the rental property is inside a KOZ.
KOZ-exempt income from each particular owner’s income if the
property was held by the entity during the period of time the owner Tangible Personal Property Rents. The entity apportions the
held an ownership interest in the entity. If the asset sold, disposed rental income it derives from tangible personal property to a KOZ
or exchanged was purchased by an entity before the owner held an only for the periods the lessee used the tangible personal property
ownership interest in the entity and the asset sold, disposed or inside a KOZ. Costs, expenses and liabilities the entity incurs in the
exchanged was purchased before or after the entity became eligible production or collection of such rents are allocable to a KOZ only if
under the requirements of the KOZ law, the exempt portion of any the rental property is inside a KOZ.
gain or loss for the owner must be adjusted to reflect only the
exemption of the net gain or loss attributable for the owner’s period If the entity receives rents from real estate or tangible personal
of ownership in the KOZ entity. property that straddles a KOZ, include a statement showing the
A separate Worksheet 3 is required for each property sold located in method that reasonably and accurately reflects the value of the
a KOZ. Enter the amount from Line 5 of Worksheet 3 in Column B, property inside and outside the KOZ and provides the amount of
Line 6, of the Schedule P-S KOZ. If more than one Worksheet 2 was rental income or loss attributable to the property inside and outside
completed as a result of more than one property located in a KOZ the KOZ.
being sold, add the amounts from each Worksheet 3, Line 5 and
enter the amount in Column B, Line 6 of the Schedule P-S KOZ. If the entity derives net rental income from real estate or tangible
personal property located inside a KOZ during the tax period, complete
Line 7. Real Estate Rents or Tangible Personal Property Worksheet 4. If the entity derives income from renting tangible
Rents. Determine real estate rents or tangible personal property personal property leased for use inside and outside a KOZ during the
rents separate from other rents. An entity may only exempt the
income from real estate rents and tangible personal property rents tax period, it can only claim an exemption for the net rents attributable
(as further outlined below) of property located or leased for use to the time the property was leased and used inside a KOZ. A separate
inside a KOZ. Under KOZ law there is no exemption for income from Worksheet 4 is required for each property and each type of property.
patents, royalties or copyrights. If an entity realized a net loss in Enter the amount from Line 1 or Line 2e of Worksheet 4 in Column B,
Column A, Line 7, do not calculate KOZ exempt income. Enter a zero Line 7 of Schedule P-S KOZ. If more than one Worksheet 4 was
in Column B, Line 7, and proceed to the instructions for Column B, completed as a result of more than one property being located within
Line 8. a KOZ or leased for use in a KOZ, add the amounts from each
Real Estate Rents. Rental income the entity derives from real Worksheet 4, Line 1 and/or Line 2e and enter the amount in Column B,
estate and costs, expenses and liabilities the entity incurs in the Line 7 of Schedule P-S KOZ.

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COLUMN B INSTRUCTIONS (continued)
WORKSHEET 4 (for Column B, Line 7)
RENTAL OF REAL OR TANGIBLE PERSONAL KOZ PROPERTY
Complete a separate worksheet for each rental property.

Description and/or address of the KOZ rental property:

Real Property
1. Net rental income or loss from real property inside a KOZ. 1.
Tangible Personal Property
2a. Net rental income or loss from tangible personal property rented inside a KOZ. 2a.
2b. Days during taxable year tangible personal property was rented inside a KOZ. 2b.
2c. Total days rented during the taxable year. 2c.

2d. Apportionment Factor. Divide Line 2b by Line 2c. Calculate the factor to six decimal places 2d. .
2e. Multiply Line 2a by Line 2d for the tangible personal property rented during the
taxable year. 2e.
If the entity derived rental income from only one KOZ property, enter this amount in Column B, Line 7. If a loss, enter zero in Column B, Line 7.
If the entity derived rental income from multiple KOZ properties, first total the amounts from all Worksheet 4 forms, then enter the net result in Column B,
Line 7. If a loss, enter zero in Column B, Line 7.

Line 8. Allocable Real Estate Rents or Tangible Personal Prop- zeros on Line 8 for Columns B, C and E. If the entity realizes net
erty Rents. Determine the real estate rents or tangible personal income in Column A, Line 7 and Column A, Line 8, enter the amount
property rents attributable to PA sources. Under KOZ law, there is no from Column B, Line 7, in Column B, Line 8. If an entity realizes a
exemption for income from patents, royalties or copyrights. If the net loss in Column A, Line 7 but realizes net income in Column A,
entity realizes a net loss in Column A, Line 7 and Column A, Line 8, Line 8, calculate the exempt income by completing a separate
or if the entity has no nonresident owners, the entity does not need Worksheet 5 for each rental property. See the instructions for
to calculate KOZ-exempt income from PA sources and may enter Column B, Line 7 for further information.

WORKSHEET 5 (for Column B, Line 8)
RENTAL OF REAL OR TANGIBLE PERSONAL KOZ PROPERTY
Complete a separate worksheet for each rental property.

Description and/or address of the KOZ rental property:

2d. Apportionment Factor. Divide Line 2b by Line 2c. Calculate the factor to six decimal places 2d. .
2e. Multiply Line 2a by Line 2d for the tangible personal property rented during the
taxable year. 2e.
If the entity derived rental income from only one KOZ property, enter this amount in Column B, Line 8. If a loss, enter zero in Column B, Line 8.
If the entity derived rental income from multiple KOZ properties, first total the amounts from all Worksheet 5 forms, then enter the net result in Column B,
Line 8. If a loss, enter zero in Column B, Line 8.

Line 9. Estate or Trust Income. Under KOZ law, estate or trust Line 11. Gambling and Lottery Winnings. Gambling and Lottery
income is only exempt from PA personal income tax when distributed winnings are not exempt for any taxpayers under KOZ law. Do not
to a resident of a KOZ. Do not enter any amount on Column B, Line 9. enter any amount in Column B, Line 11. Report each resident
The KOZ resident owner claims the exemption for this income upon owner’s distributive share of this income on Form PA-20S/PA-65
filing a PA individual income tax return (PA-40 KOZ). Schedule RK-1 without any deductions. Do not enter any amount in
Column B, Line 11. Report each resident owner’s distributive share
Line 10. Allocable Estate or Trust Income. Under KOZ law, of this income on Form PA-20S/PA-65 Schedule RK-1 without any
estate or trust income is only exempt from PA personal income tax deductions.
when distributed or credited to a resident of a KOZ. Do not enter any Line 12. Allocable Gambling and Lottery Winnings. Gambling
amount in Column B, Line 10. and Lottery winnings are not exempt for any taxpayers under KOZ

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COLUMN B INSTRUCTIONS (continued)

law. Do not enter any amount in Column B, Line 12. Report each Worksheet 7 must be completed based upon whether the entity has
nonresident owner’s distributive share of this income on Form income from the operation of a business located wholly within a
PA-20S/PA-65 Schedule NRK-1 without any deductions. KOZ, wholly outside a KOZ or partly within a KOZ. If the entity is
Line 13. Guaranteed Payments for Capital or Other Services. wholly within a KOZ or partly within a KOZ, the entity must complete
Guaranteed payments for return of capital or for any other services Worksheet 6 and/or Worksheet 7. If the entity operates wholly
are generally not taxable for PA personal income tax purposes. Each outside a KOZ, there is no exemption of guaranteed payments by the
partner should determine separately if any guaranteed payments for partnership, and Worksheets 6 and 7 need not be completed. The
return of capital exceed the partner’s basis in the partnership by entity must also classify the guaranteed payments as business or
completing REV-999 PT. Any payment determined to be in excess of rental income. The entity must then determine separately for each
basis (taxable) for PA personal income tax purposes on REV-999 PT partner if net income will be greater than zero when combining the
is considered the sale of an intangible asset by the partner. A partner amount of each partner’s guaranteed payments with the business
who satisfies the residency requirements under KOZ law will be able partner’s income or loss from the operation of a business, profession
to claim the exemption for this income based upon the ownership or farm or the rental income or loss from rents, royalties, patents
period of the partnership upon the filing a PA individual tax return and copyrights for each partner. For each partner whose income is
(PA-40 KOZ). Do not enter any amount in Column B, Line 13. greater than zero, the guaranteed payments are then reduced by the
Lines 14 and 15. All Other Guaranteed Payments for Services KOZ-exempt portion of the income. Use Worksheet 6 to calculate the
Rendered - Resident and Nonresident Partners. When deter- exemption for partnerships with resident partners. Use Worksheet 7 to
mining what guaranteed payments are exempt from taxation for a calculate the exemption for partnerships with nonresident partners.
KOZ-based partnership entity, there are four issues the entity must Use both worksheets when a partnership has both resident and
resolve. First, the entity must determine if Worksheet 6 and/or nonresident partners.

WORKSHEET 6 (for Column B, Line 14)
ALLOCABLE ALL OTHER GUARANTEED PAYMENTS FOR SERVICES RENDERED (Resident Partners)
Complete a separate column for each resident partner. Include additional worksheets if necessary.

Partner A B C Totals
Income Tests:
1. Amount of resident partner’s share of income (loss) from
Schedule P-S KOZ, Column A, Line 1.
2. Amount of resident partner’s portion of Schedule P-S KOZ,
Column A, Line 14 classified as business income.
3. Add Lines 1 and 2. See instructions.
4. Amount of resident partner’s share of income (loss) from
Schedule P-S KOZ, Column A, Line 7.
5. Amount of resident partner’s portion of Schedule P-S KOZ,
Column A, Line 14 classified as rental income.
6. Add Lines 4 and 5. See instructions.
Guaranteed Payment Type:
Business Income:
7. Amount of resident partner’s portion of Schedule P-S KOZ,
Column A, Line 14 classified as business income.
8. PA apportionment factor from Line 5 of PA Schedule H. .
9. PA KOZ apportionment factor from Line 5 of Worksheet 1. .
10. Multiply Line 7 by Line 8, and the result by Line 9, and enter result.
Rental Income:
11. Amount of resident partner’s portion of Schedule P-S KOZ,
Column A, Line 14 classified as real estate rents from property
located inside a KOZ.
12. Amount of resident partner’s portion of Schedule P-S KOZ,
Column A, Line 14 classified as tangible personal property rents.
13. PA KOZ apportionment factor from Line 2d of Worksheet 4. .
14. Multiply Line 12 by Line 13 and enter result.
15. Total Exempt Guaranteed Payments by Partner - Add Lines 10, 11
and 14 for each resident partner.
16. Add Lines 2 and 5 and subtract Line 15. Enter the result here and
on each resident partner’s Schedule RK-1.
17. Total Exempt Guaranteed Payments - add the amounts in the Totals
Column for Lines 10, 11 and 14. Enter the result here and in
Column B, Line 14 of Schedule P-S KOZ.

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COLUMN B INSTRUCTIONS (continued)
IMPORTANT: For Worksheets 6 and 7, the Income Tests Sections Line 10. For each partner with an amount on Line 7, multiply Line 7
must be completed by all partnerships with guaranteed payments by the factor on Line 8, and the result by the factor on Line 9. This
regardless of whether or not any of the guaranteed payments are is the amount of guaranteed payments attributable to a partner
exempt from taxation as determined by the worksheets. from the operation of business, profession or farm located within a
Classifying Guaranteed Payments as Business or Rental KOZ. Add the amounts for each partner with an amount on Line 10
Income. Partnerships that have guaranteed payments paid to and enter the result in the Totals Column.
partners will classify the income as net income or loss from the Line 11. If the entity reports its guaranteed payments as rental
operation of a business, profession or farm or net income or loss income and the rental property is real estate, enter the amount of
from rents, royalties, patents and copyrights depending upon what Schedule P-S KOZ, Column A, Line 14 guaranteed payments attrib-
type of income the partnership reports. Partnerships reporting both utable to any KOZ-exempt rental income reported on Schedule P-S
types of income must classify the guaranteed payments according
to whether the services provided were related to the operation of KOZ, Column A, Line 7, where Line 6 for a partner is greater than
a business or related to services provided for the rental property zero. If the entity has more than one real estate property and
or both. If the guaranteed payments are classified as both business some properties are located inside the KOZ and some properties
income and rental income, complete all lines of the Income Tests are located outside the KOZ, the guaranteed payments must be
Sections on Worksheet 6 and Worksheet 7 (if applicable). If the prorated based upon the gross rents of the properties unless the
guaranteed payments are classified only as business income or only guaranteed payments are specifically associated with or attributable
as rental income, complete the appropriate lines for the appropriate to the real estate properties located in the KOZ. Enter only the
classes of income in the Income Tests Sections and enter zeros on KOZ-exempt portion of the guaranteed payments. Add the amounts
the lines for other class of income in the Income Tests sections. for each partner with an amount on Line 11 and enter the result in
the Totals Column.
Worksheet 6 Instructions
Line 1. For each resident partner, enter the partner’s share of Line 12. If the entity reports its guaranteed payments as rental
income or loss from Schedule P-S KOZ, Column A, Line 1. income and the rental property is tangible personal property, enter
NOTE: Multiple copies of Worksheet 6 may be required for entities the amount of Schedule P-S KOZ, Column A, Line 14 guaranteed
with more than three partners. Complete additional Worksheets 6 payments attributable to the KOZ-exempt exempt tangible personal
for entities with more than three partners and include the totals for property reported Schedule P-S KOZ, Column A, Line 7, where
all partners in the entity on the first Worksheet 6 only. Line 6 for a partner is greater than zero. If the entity has more
than one item of tangible personal property, and some properties
Line 2. Enter the amount of each resident partner’s portion of are located and used inside the KOZ and some properties are
guaranteed payments from Schedule P-S KOZ, Column A, Line 14 located or used outside the KOZ, the guaranteed payments must
classified as business income. be prorated based upon the gross rents of the properties unless the
Line 3. Add Lines 1 and 2 for each resident partner. If the result is guaranteed payments are specifically associated with or attributable
zero or less for any partner, enter a zero on Line 10 for that partner. to the specific items of tangible personal property located and used
Complete Lines 7 through 10 as required for any partner with a inside the KOZ. Enter only the KOZ-exempt portion of the guaranteed
result greater than zero. payments for a single property. Complete a separate Worksheet 6
for each property.
Line 4. For each resident partner, enter the partner’s share of
income or loss from Schedule P-S KOZ, Column A, Line 7. Line 13. Enter the PA KOZ apportionment factor from Line 2d of
Worksheet 4 for each partner with an amount on Line 12. Complete
Line 5. Enter the amount of each resident partner’s portion of
guaranteed payments from Schedule P-S KOZ, Column A, Line 14 a separate Worksheet 6 for each property.
classified as rental income. Line 14. Multiply Line 12 by Line 13 for each partner with an
Line 6. Add Lines 4 and 5 for each resident partner. If the result amount on Line 10 greater than zero and enter the result here. Add
is zero or less for any partner, enter a zero on Lines 11 and 14 for the amounts for each partner with an amount on Line 14 and enter
that partner. Complete Lines 11 through 14 as required for any the result in the Totals Column.
partner with a result greater than zero. Line 15. Add the amounts on Lines 10, 11 and 14 for each resident
NOTE: If Line 3 shows zero or less total income for the business class partner.
of income, there is no exempt portion of the guaranteed payments
classified as business income. Likewise, if Line 6 shows zero or less Line 16. Add the amounts on Lines 2 and 5, subtract Line 15 and
income for the rental class of income, there is no exempt portion enter the result here. Report the result on each partner’s Schedule
of the guaranteed payments classified as rental income. RK-1. If multiple Worksheets 6 were completed, add the amounts
from any other Worksheets 6 for each partner and then subtract
Line 7. If the entity reports its guaranteed payments as business the result from the resident partner’s total guaranteed payments
income, enter the amount of each resident partner’s portion of before reporting the result on the resident partner’s Schedule RK-1
Schedule P-S KOZ, Column A, Line 14 guaranteed payments from the partnership entity. Add the amounts for each resident
classified as business income where Line 3 is greater than zero. partner and enter the total in the Totals Column. This amount
Line 8. Enter the PA apportionment factor from PA Schedule H, should also be reported on Schedule P-S KOZ, Column D, Line 14.
Line 5 for each partner with an amount on Line 7. If the entity Line 17. Add the amounts in the Total Column for Lines 10, 11 and
operates wholly within Pennsylvania, enter 1.0 on Line 8. 14. Enter the result here and on Schedule P-S KOZ, Column B,
Line 9. Enter the KOZ apportionment factor from Line 5 of Line 14. If multiple Worksheets 6 were completed, add the amounts
Worksheet 1 for each partner with an amount on Line 7. If the from any other Worksheets 6 for each line 17 before reporting the
entity’s PA operations are wholly within a KOZ, enter 1.0 on Line 9. result on Schedule P-S KOZ, Column B, Line 14.

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COLUMN B INSTRUCTIONS (continued)

WORKSHEET 7 (for Column B, Line 15)
ALLOCABLE ALL OTHER GUARANTEED PAYMENTS FOR SERVICES RENDERED (Nonresident Partners)
Complete a separate column for each resident partner. Include additional worksheets if necessary.

Partner A B C Totals
Income Tests:
1. Amount of nonresident partner’s share of income (loss) from
Schedule P-S KOZ, Column A, Line 2.
2. Amount of nonresident partner’s portion of Schedule P-S KOZ,
Column A, Line 15 classified as business income.

3. PA apportionment factor from Line 5 of PA Schedule H. .

4. Multiply Line 2 by Line 3 and enter result.

5. Add Lines 1 and 4. See instructions.
6. Amount of nonresident partner’s share of income (loss) from
Schedule P-S KOZ, Column A, Line 8.
7. Amount of nonresident partner’s portion of Schedule P-S KOZ,
Column A, Line 15 classified as rental income from PA properties.

8. Add Lines 6 and 7. See instructions.
Guaranteed Payment Type:
Business Income:
9. Amount of nonresident partner’s portion of Schedule P-S KOZ,
Column A, Line 15 classified as business income.

10. PA apportionment factor from Line 5 of PA Schedule H. .

11. PA KOZ apportionment factor from Line 5 of Worksheet 1. .

12. Multiply Line 9 by Line 10, and the result by Line 11, and enter result.
Rental Income:
13. Amount of nonresident partner’s portion of Schedule P-S KOZ,
Column A, Line 15 classified as real estate rents from property
located inside a KOZ.
14. Amount of nonresident partner’s portion of Schedule P-S KOZ,
Column A, Line 15 classified as tangible personal property rents.

15. PA KOZ apportionment factor from Line 2d of Worksheet 5. .

16. Multiply Line 14 by Line 15 and enter result.
17. Total Exempt Guaranteed Payments by Partner - Add Lines 12, 13
and 16 for each nonresident partner.
18. Add Lines 4 and 7 and subtract Line 17. Enter the result here and on
each nonresident partner’s Schedule NRK-1.
19. Total Exempt Guaranteed Payments - add the amounts in the Totals
Column for Lines 12, 13 and 16. Enter the result here and in
Column B, Line 15 of Schedule P-S KOZ.

Worksheet 7 Instructions Line 5. Add Lines 1 and 4 for each nonresident partner. If the
Line 1. For each nonresident partner, enter the partner’s share of result is zero or less for any partner, enter a zero on Line 12 for
income or loss from Schedule P-S KOZ, Column A, Line 2. that partner. Complete Lines 9 through 12 for any partner with a
result greater than zero. If the result for Line 5 is greater than
Line 2. Enter the amount of each nonresident partner’s share of zero, Worksheet 1 must be completed.
the guaranteed payments included in Schedule P-S KOZ, Column A, Line 6. For each nonresident partner, enter the partner’s share of
Line 15 classified as business income. income or loss from Schedule P-S KOZ, Column A, Line 8.
Line 3. Enter the PA apportionment factor from Line 5 of PA Line 7. Enter the amount of each nonresident partner’s share
Schedule H. of the guaranteed payments included in Schedule P-S KOZ,
Column A, Line 15 attributable only to rental property located
Line 4. Multiply Lines 2 and 3 and enter result here. inside Pennsylvania.

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COLUMN B INSTRUCTIONS (continued)
Line 8. Add Lines 6 and 7 for each nonresident partner. If the result Line 16. Multiply Line 14 by Line 15 for each partner with an
is zero or less for any partner, enter zeros on Lines 13 and 16. amount on Line 15 and enter the result here. Add the amounts for
Complete Lines 13 through 16 for any partner with a result greater each partner with an amount on Line 16 and enter the result in the
than zero. If the result is greater than zero for any partner, Totals Column.
Worksheet 1 must be completed
Line 17. Add the amounts on Lines 12, 13 and 16 for each
NOTE: If Line 5 shows zero or less total income for the business nonresident partner.
class of income, there is no exempt portion of the guaranteed pay- Line 18. Add Lines 4 and 7 and subtract Line 17 from the result.
ments classified as business income. Likewise, if Line 8 shows zero Enter the result here and on Schedule NRK-1 for each nonresident
or less income for the rental class of income, there is no exempt partner. Add the amounts for each nonresident partner and enter
portion of the guaranteed payments classified as rental income. the total in the Totals Column. This amount should also be reported
Additionally, if the Line 5 result for any nonresident partner is on Schedule P-S KOZ, Column E, Line 15.
greater than zero, Worksheet 1 must be completed.
Line 19. Add the amounts in the Total Column for Lines 12, 13 and
For each line, Lines 1 through 8, add the amounts from each partner 16. Enter the result here and on Schedule P-S KOZ, Column B,
reporting an amount on a line and enter the result in the Totals Line 15. If multiple Worksheets 7 were completed, add the
Column. If a partnership has multiple Worksheets 7, enter total amounts from any other Worksheets 7 for each line before reporting
amounts in the Totals Column on the first Worksheet 7 only. the result on Schedule P-S KOZ, Column B, Line 15.
Line 9. If the entity reports its guaranteed payments as business
income, enter the amount of each nonresident partner’s portion Column B Instructions
of Schedule P-S KOZ, Column A, Line 15 guaranteed paymentsLine 16. Distributions of Cash, Marketable Securities and
classified as business income, where Line 5 is greater than zero. Property. Do not enter any amount in Column B, Line 16. The KOZ
resident owner is required to determine any income and exemption
Line 10. Enter the PA apportionment factor from PA Schedule H, for this income on the filing of a PA individual income tax return
Line 5 for each partner with an amount on Line 9. If the entity (PA-40 KOZ).
operates wholly within Pennsylvania, enter 1.0 on Line 10.
Column C Instructions
Line 11. Enter the KOZ apportionment factor from Line 4 of Subtract the amount in Column B for Lines 1, 2, 5, 6, 7, 8, 14 and 15
Worksheet 1 for each partner with an amount on Line 10. If the from the amounts in Column A for the same lines and enter the
entity’s PA operations are wholly within a KOZ, enter 1.0 on Line 11. results in Column C. For Lines 3, 4, 9, 10, 11, 12, 13 and 16, enter
the amounts in Column A in Column C.
Line 12. For each partner with an amount on Line 9, multiply
Line 9 by the factor on Line 10, and the result by the factor on Column D Instructions
Line 11. This is the amount of guaranteed payments attributable To determine the amount taxable in total to PA resident owners,
to a partner from the operation of business, profession or farm carry over the amounts in Column C to the non-shaded blocks in
located within a KOZ. Add the amounts for each partner with an Column D (shaded blocks are not applicable to PA resident owners).
amount on Line 12 and enter the result in the Totals Column. For Lines 1, 3, 4, 5, 7, 9 and 11, use the amounts in Column D to
multiply by each owner’s percentage of ownership or distributive
Line 13. If the entity reports its guaranteed payments as rental income percentage to determine the distributive income to report on
income and the rental property is real estate, enter the amount of the Form PA-20S/PA-65 Schedule(s) RK-1 of each resident owner.
Schedule P-S KOZ, Column A, Line 15 guaranteed payments attrib- For Line 13, use the amount attributable to each resident partner to
utable to any KOZ-exempt rental income reported on Schedule P-S report the amount on the Form PA-20S/PA-65 Schedule(s) RK-1 of
KOZ, Column A, Line 8, where Line 8 of Worksheet 7 for a partner each resident partner. For Line 14, enter the amount from the Totals
is greater than zero. If the entity has more than one real estate Column for Line 16 of Worksheet 6.
property and some properties are located inside the KOZ and some
properties are located outside the KOZ, the guaranteed payments Column E Instructions
must be prorated based upon the gross rents of the properties To determine the amount taxable to nonresident owners, carry over
unless the guaranteed payments are specifically associated with or the amounts in Column C as appropriate to the non-shaded blocks
attributable to the real estate properties located in the KOZ. Enter in Column E (shaded blocks are not applicable to nonresident
only the KOZ-exempt portion of the guaranteed payments. Add the owners). For Lines 2, 6, 8, 10 and 12, use the amounts in column E
amounts for each partner with an amount on Line 13 and enter the to multiply by each owner’s percentage of ownership or distributive
result in the Totals Column. income percentage to determine the distributive income to report on
the Form PA-20S/PA-65 Schedule(s) NRK-1 of each nonresident
Line 14. If the entity reports its guaranteed payments as rental owner. For Line 13, use the amount attributable to each nonresident
income and the rental property is tangible personal property, enter partner. For Line 15, enter the amount from the Totals Column for
the amount of Schedule P-S KOZ, Column A, Line 15 guaranteed Line 18 of Worksheet 7.
payments attributable to the KOZ-exempt exempt tangible personal
property reported Schedule P-S KOZ, Column A, Line 8, where Line 8 Special Help
of Worksheet 7 for a partner is greater than zero. If the entity has Obtain additional information or instructions regarding the filing of PA
more than one item of tangible personal property and some prop- Schedule P-S KOZ by calling the Taxpayer Service and Information
erties are located and used inside the KOZ and some properties are Center at 717-787-1064 (business taxes) or 717-787-8201 (individual
located or used outside the KOZ, the guaranteed payments must taxes). You may order forms by calling 1-800-362-2050.
be prorated based upon the gross rents of the properties unless the
guaranteed payments are specifically associated with or attributable Mailing Instructions
to the specific items of tangible personal property located and used Mail the Completed PA Schedule P-S KOZ, all related worksheets
inside the KOZ. Enter only the KOZ-exempt portion of the guaranteed and other required documents along with the PA-20S/PA-65 PA S
payments for a single property. Complete a separate Worksheet 7 Corporation/Partnership Information Return to the address provided
for each property. in the Form PA-20S/PA-65 PA S Corporation/Partnership Information
Return instructions. A PA-20S/PA-65 PA S Corporation/Partnership
Line 15. Enter the PA KOZ apportionment factor from Line 2d of Information Return should be assembled such that the PA Schedule
Worksheet 5 for each partner with an amount on Line 14. Complete P-S KOZ and related documents are included immediately after
a separate Worksheet 7 for each property. Pages 1 through 3 of the information return.

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