Respond to a Personal Income Tax Under Reporter Notice

The PA Department of Revenue may send you a notice indicating that you may have failed to report all of your taxable income on your PA-40, Pennsylvania Personal Income Tax Return for a particular tax year. The source(s) and amount(s) of the unreported income that may be taxable for Pennsylvania purposes are identified on the reverse side of the notice you receive. An example of the Under Reporter Notice is attached to this answer.

If you agree that the income identified on the notice was not reported to Pennsylvania and is subject to Pennsylvania Personal Income Tax, complete the enclosed PA-40 and the PA-40X, Amended Pennsylvania Personal Income Tax Schedule. Schedule PA-40X is not a stand-alone form and must be filed with a PA-40, indicating it is an amended return. Include all applicable W-2/1099 forms and Pennsylvania income tax schedules to verify income, credits, and tax withheld. Send the PA-40 and PA-40X with the signed notice to the department.

If you pay the outstanding tax and interest within 30 days of the Under Reporter notice, the late-filing penalty will be waived. If you do not reply within 30 days of the notice, you will be assessed tax, interest, and penalty based on the identified unreported income. You can calculate interest using the online calculator.