Pennsylvania Form PA-40 Schedule A – Interest Income (2026)

Last reviewed: 2025-11-08

Use the Pennsylvania Tax Form Calculator Form PA-40 Schedule A: Interest Income as a stand alone tax form calculator to quickly calculate specific amounts for your 2026 Pennsylvania state tax return. Alternatively, you can use one of our Combined Federal and State Tax Estimators to quickly calculate your salary, tax, and take-home pay.

Form PA-40 Schedule A is used by Pennsylvania taxpayers to report all forms of interest income received during 2026. This includes bank interest, certificates of deposit, savings bonds, corporate bonds, loans, and other investments. The purpose of this schedule is to reconcile federal interest income with what is taxable under Pennsylvania law, since not all federally taxed interest is taxable by the Commonwealth. For example, Pennsylvania excludes interest from U.S. government obligations and state or local Pennsylvania bonds, while interest from other states’ municipal bonds remains taxable.

All entries on Schedule A must be reported in whole dollars. The form is divided into three major sections: additions (Lines 1–3), exemptions and reductions (Lines 5–9), and final taxable interest computation (Lines 10–16). If every line between 2 and 15 is zero, you can enter your total interest directly on PA-40 Line 2 without attaching this schedule.

When to File Schedule A

Attach Schedule A if you earned any interest income during the year and any part of it was taxable in Pennsylvania. This includes situations where your federal return shows nontaxable items that Pennsylvania taxes, such as interest from other states’ municipal bonds or certain partnership income. Each spouse must file a separate Schedule A when filing jointly if both have interest income to report.

Completing Schedule A

Follow the official Pennsylvania Department of Revenue instructions carefully. The table below corresponds to the official line structure of the 2024 schedule:

• Lines 1–3 (Additions): Start with interest from your federal return, include tax-exempt federal interest reported on Line 2a of your federal 1040, and list any other addition adjustments (Line 3) with a brief description.
• Lines 5–9 (Reductions): Include interest from K-1 forms, direct obligations of the Commonwealth or U.S. government, and any other permitted reductions. These are subtracted from your subtotal on Line 4.
• Lines 10–16 (Total PA-Taxable Interest): After applying reductions, add back life-insurance distributions, annuity payments, and qualified-plan withdrawals that Pennsylvania deems taxable. The total on Line 16 carries to PA-40 Line 2.

Use separate schedules if necessary to detail each payer or financial institution. Ensure that every total is rounded to the nearest whole dollar, dropping cents. Pennsylvania does not allow fractional reporting.

Examples and Scenarios

Example 1 – Bank and Bond Interest: You earned $250 from a bank savings account and $400 from corporate bonds. Both are fully taxable in Pennsylvania, so they appear on Lines 1 and 3. If you also received $150 from U.S. Treasury notes, that portion is nontaxable and entered on Line 7.

Example 2 – Pennsylvania Municipal Bond: You earned $300 from bonds issued by the Commonwealth of Pennsylvania. Because these are direct obligations of the state, the interest is exempt and listed on Line 6 as a reduction. This reduces your taxable total on Line 10.

Example 3 – Other-State Municipal Bond: Interest from a New York City municipal bond is taxable in Pennsylvania. Report the amount on Line 1 and do not include it among exemptions.

Example 4 – Partnership Income: If your Schedule RK-1 from a Pennsylvania partnership shows $800 of interest income, record it on Line 15. This ensures it flows properly to your PA-40 return without duplication.

Keep all statements, 1099-INT forms, and K-1s for verification. Inaccurate categorization of taxable versus nontaxable interest can lead to under- or overpayment of Pennsylvania tax.

Further Information and Resources

• Form PA-40 – Individual Income Tax Return
• Schedule B – Dividend Income
• Official PA-40 Schedule A PDF (2024)
• Pennsylvania Department of Revenue – Individual Tax Forms and Schedules

Schedule A supports accurate income classification and helps taxpayers avoid common errors involving U.S. obligations and municipal bond interest. Completing it properly ensures your taxable income on PA-40 matches Pennsylvania’s requirements for the 2026 tax year.

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Important Notes

All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.