There are new rules for deducting unreimbursed employee business expenses on your PA-40 Personal Income Tax Return. The Department of Revenue now requests that supporting documentation is necessary when claiming these expenses. Taxpayers now need to submit a letter from their employer indicating that the expenditures were necessary and not reimbursed. If the employer letter is not available then the State will accept a signed affidavit or a copy of the employer’s employee expense reimbursement policy.
Generally, expenses that may qualify as an unreimbursed employee business expense include:
- Travel and mileage
- Certain mobile phone uses
- Uniforms (required by the employer that are not suitable for street wear)
- Small tools
- Office supplies
- Professional license fees
- Some moving expenses
- Certain educational costs
- Union dues, agency fees or initiation fees
The Department of Revenue strongly encourages taxpayers to keep their receipts for 7 years, and document the purpose of the business related expense when it is incurred otherwise undocumented expenses can be disallowed.
You can claim a deduction for an unreimbursed employee business expense by filing a PA Schedule UE, Allowable Employee Business Expenses form along with your PA-40 Personal Income Tax Return.
For more information about this, contact your tax professional at Isdaner & Company at 610.668.4200.