Pennsylvania Form PA-40 Schedule F is the Farm Income and Expenses schedule that every Pennsylvania resident, part-year resident, or nonresident who operates a farm as a sole proprietor must file with the Pennsylvania Department of Revenue to report net farm profit or loss on the PA-40 personal income tax return. The schedule recalculates federal farm income under Pennsylvania’s stricter rules — most notably the disallowance of federal bonus depreciation, the cap on Section 179 expensing at the federal limit in effect on January 1, 1986, and the requirement that cash-basis farmers stay on cash basis once chosen.
Getting Schedule F wrong is costly. Pennsylvania assesses a 5% per month underpayment penalty (capped at 25%) plus statutory interest on tax owed, and the PA Department of Revenue’s Personal Income Tax Bureau routinely flags farm returns where PA depreciation does not match the federal Form 4562 reconciliation. According to the Pennsylvania Department of Revenue’s most recent Tax Compendium, more than 20,000 Pennsylvania farmers file Schedule F each year, and roughly 1 in 7 returns containing farm income gets corresponded for depreciation or expense errors.
Here is what this guide delivers:
- 🌾 A line-by-line walkthrough of every box on the 2025 PA-40 Schedule F (Rev. 09-25)
- 📋 A pre-filing checklist of every document, ID number, and ledger entry you need
- 👨🌾 Three full filled-out scenarios using real farmers, real numbers, and real Pennsylvania quirks
- ⚠️ The 10 most common Schedule F mistakes and the exact penalty each one triggers
- ❓ 14 plain-English FAQs covering the field-level questions farmers ask most
What the Form Is and Who Must File It
PA-40 Schedule F is the Pennsylvania equivalent of federal IRS Schedule F (Form 1040), but it is not a copy of the federal form. Pennsylvania taxes net profits from farming as a class of income under 72 P.S. § 7303(a)(2), and the rules diverge from the Internal Revenue Code in several places. The form is officially titled PA-40 Schedule F – Farm Income and Expenses, and the current revision is Rev. 09-25, used for the 2025 tax year filed in 2026.
You must file PA Schedule F if you operated a farm as a sole proprietor, a single-member LLC taxed as a disregarded entity, or as a member of a husband-and-wife joint venture, and you produced or raised agricultural products for sale. “Farming” under the PA Personal Income Tax Guide – Net Income from a Business chapter includes cultivating soil, raising livestock, dairy farming, poultry, fish, fruit, truck farming, plantations, ranches, nurseries, ranges, orchards, and greenhouses. Agritourism, custom hire, and value-added processing of your own product also belong on Schedule F; processing purchased product belongs on PA Schedule C instead.
Partnerships and S corporations engaged in farming do not file Schedule F. They file PA-20S/PA-65 and pass farm income through to owners on RK-1 or NRK-1, which the owners then report on PA Schedule J or directly on PA-40 Line 4 — not on Schedule F. C corporations file RCT-101.
Before You Start: Documents and Information You Need
Pull every record before you open the form. Pennsylvania Schedule F is not a place for estimates, and the PA Department of Revenue’s audit division accepts only contemporaneous records during examination.
- Federal Schedule F (Form 1040). You start with federal numbers, then adjust for PA differences. Without the federal copy, you cannot reconcile depreciation.
- Federal Form 4562 and Pennsylvania depreciation schedule. PA disallows federal bonus depreciation under IRC § 168(k) and caps Section 179 at the 1986 federal limit ($25,000 in many cases). You need a parallel PA depreciation schedule.
- Social Security Number or Federal EIN. Sole proprietors use SSN; an EIN is required if you have employees or file employment tax returns. Missing or mismatched IDs trigger an automatic processing hold.
- Principal Agricultural Activity Code. This is the 6-digit NAICS-style code from the federal Schedule F instructions (e.g., 111100 for oilseed and grain).
- All Forms 1099 (PATR, MISC, NEC, G). Cooperatives report patronage dividends on 1099-PATR; CCC loans show on 1099-G; custom hire shows on 1099-NEC. Each must reconcile to the gross income lines.
- Sales receipts, milk checks, livestock auction tickets, and CSA logs. Cash-basis farmers report when received; accrual farmers report when earned.
- Expense ledger with categories matching Lines 14–32. Disorganized receipts force you to lump expenses into “Other,” which is the single biggest audit flag.
- Inventory records (accrual filers only). Beginning and ending inventory of livestock, crops, supplies, and feed.
- REV-1832 (1099-MISC Withholding Exemption Certificate) records. If you paid PA non-resident contractors $5,000 or more, you need REV-1832 on file or you owe 3.07% withholding.
- Prior-year PA-40 Schedule F. You need it to confirm your accounting method election and depreciation basis.
Where to Get the Form and How to Access It
The official 2025 PA-40 Schedule F lives on the PA Department of Revenue Forms for Individuals page as a fillable PDF. Always download fresh each year — the revision date in the bottom-left corner must read 09-25 for 2025 returns. Using a prior-year form causes the scanner to reject the return at intake.
You can also access Schedule F inside myPATH, Pennsylvania’s free e-file portal, which automatically pulls the current version and validates math. Commercial software like TurboTax, H&R Block, Drake, and TaxSlayer all carry Schedule F, but they sometimes default to federal depreciation and quietly create a PA mismatch — always review the PA depreciation worksheet before submitting.
Paper copies are available at any PA Department of Revenue District Office, at most public libraries during filing season, and by calling the Forms Ordering Service at 1-800-362-2050. The form is two pages: Page 1 covers identification and income, Page 2 covers expenses and the net profit calculation.
Step-by-Step: How to Fill Out PA-40 Schedule F Line by Line
The form follows the order of money: identify yourself, report what came in, subtract what went out, and carry the net to PA-40 Line 4. Use blue or black ink, all caps, and no dollar signs.
Name of Owner as Shown on PA Tax Return
This top-of-form field asks for the farmer’s full legal name as printed on PA-40 Line 1.
Write the name exactly as it appears on the front of your PA-40 — last name first if you put it that way on the main return, in ALL CAPITAL LETTERS, with no nicknames or initials unless your Social Security card uses initials. Match the PA-40 character-for-character so the Department’s scanner pairs the schedule with the correct return.
For example, MARIA L GONZALEZ writes her name exactly as it appears on her SSA card and on PA-40 Line 1.
If you file jointly but only one spouse farms, enter only the farming spouse’s name here, even though the PA-40 itself shows both names. Schedule F is per-farmer, not per-couple.
A common mistake is writing the farm’s “doing business as” name (e.g., GREEN ACRES DAIRY) instead of the owner’s legal name. The schedule then orphans from the PA-40 and processing stalls 6–10 weeks while the Department mails a REV-1832 follow-up letter.
A frequent misconception is that the farm name belongs on this line because federal Schedule F has a “Name of proprietor” box that some software auto-fills with the DBA. PA wants the person, not the business.
Social Security Number
This field asks for the 9-digit SSN of the farmer-owner.
Enter the SSN in the format 123-45-6789 with hyphens, matching the SSN on PA-40 Line 1. If you use an EIN for your farm, you still put the SSN here because Schedule F is a personal income tax schedule, not a business return.
For example, MARIA L GONZALEZ enters 198-44-5521 exactly as printed on her Social Security card.
If you are a resident alien farming in Pennsylvania and have an ITIN instead of an SSN, enter the ITIN in the same format. The Department accepts ITINs on Schedule F as long as the PA-40 itself uses the same number.
A common mistake is transposing two digits, which causes the Department’s matching system to reject the schedule and assess tax based on gross receipts only with no expense deductions allowed. The math difference can be tens of thousands of dollars.
A misconception is that farms with employees should put the farm EIN here. The EIN goes on employment tax forms like PA-501, not on Schedule F.
Federal EIN (if any)
This optional field asks whether the farm has a federal Employer Identification Number.
Enter the EIN in 12-3456789 format if you have one; otherwise leave blank. Having an EIN does not change how you complete Schedule F — it simply tells the Department your farm has employees, files Form 943, or has a separate banking identity.
For example, PAUL R MILLER operates Miller Family Dairy, which has 4 employees, so he enters 23-1098765 in this box.
If you applied for an EIN mid-year, enter the EIN — do not write APPLIED FOR. The Department’s scanner reads “APPLIED FOR” as missing data and kicks the form to manual review.
A common mistake is entering the EIN on a small hobby-scale farm with no employees. The EIN is harmless to include if it exists, but applying for an EIN you do not need creates ongoing federal filing obligations under IRS Publication 1635.
A misconception is that EINs replace SSNs on Schedule F. They do not. The SSN field above is mandatory; the EIN field is supplemental.
Principal Agricultural Activity
This field asks for a one-line description of your main farming activity.
Write a plain-English description that matches the federal Schedule F Line B activity (e.g., DAIRY, GRAIN, BEEF CATTLE, MIXED VEGETABLES, POULTRY EGGS). Pennsylvania uses this to classify your operation for statistical reporting under the Department’s farm income data set.
For example, PAUL R MILLER enters DAIRY because milk sales make up 82% of his gross receipts.
If you have two near-equal activities (say, 55% grain, 45% beef), enter the larger one only. Splitting one Schedule F into two by activity is not allowed; one farm-business equals one Schedule F.
A common mistake is writing FARMING or AGRICULTURE. Both are too generic and trigger a follow-up letter asking you to specify, delaying refunds.
A misconception is that this field must mirror the federal NAICS code. PA wants words, not the 6-digit code (the code goes in the next box).
Principal Agricultural Activity Code
This field asks for the federal 6-digit Principal Agricultural Activity Code.
Look up the code in the federal Schedule F instructions under “Principal Agricultural Activity Codes.” Common codes include 111100 (oilseed/grain), 112111 (beef cattle ranching), 112120 (dairy cattle and milk production), 112210 (hog and pig farming), and 112310 (chicken egg production). Enter exactly 6 digits with no dashes or spaces.
For example, PAUL R MILLER enters 112120 for dairy cattle and milk production.
If your activity does not fit cleanly, use 111998 (other crop farming) or 112990 (other animal production) — never invent a code.
A common mistake is using the NAICS industry code from your business license (5- or 6-digit) instead of the federal Schedule F code. They overlap but are not identical, and the wrong code routes your return to the wrong analyst queue.
A misconception is that the code controls eligibility for farm tax preferences. It does not — the activity controls. The code is informational only.
Method of Accounting
This field asks whether you keep books on the cash method or accrual method.
Check Cash if you record income when received and expenses when paid; check Accrual if you record income when earned and expenses when incurred regardless of cash flow. Most Pennsylvania farms use cash; large operations and those with substantial inventory often use accrual.
For example, MARIA L GONZALEZ checks Cash because she deposits CSA payments and writes checks for seed as the money moves.
Once you elect a method, you are locked in. Pennsylvania follows IRC § 446(e) — you cannot switch without filing federal Form 3115 and getting IRS consent, and PA requires a copy of the approved Form 3115 attached to the year-of-change PA-40.
A common mistake is checking both boxes or switching methods to manage tax liability in a profitable year. The Department disallows the switch and recomputes income on the original method, often producing a larger tax bill plus penalty.
A misconception is that the hybrid method (cash for some items, accrual for inventory) is its own box. It is not — check Accrual if any portion of your books is accrual.
Line 1 — Sales of Livestock and Other Items You Bought for Resale
This line asks for gross receipts from livestock, produce, grains, and other items you purchased and then resold.
Enter the total dollars received in whole dollars only, no cents, from selling animals or items bought for resale (e.g., feeder calves bought, fed, and sold; resale of purchased hay). Do not include animals you raised — those go on Line 4.
For example, PAUL R MILLER bought 12 feeder steers in March for $14,400 and sold them in November for $22,800; he enters 22800 on Line 1.
If you bought resale items in one year and sold them in another, the income still belongs in the year of sale (cash basis) or year earned (accrual). Holding period is irrelevant.
A common mistake is netting Line 1 against Line 2 (cost of items bought for resale). Pennsylvania wants gross receipts on Line 1 and cost on Line 2 separately so the audit trail is clean.
A misconception is that breeding livestock you sell belongs here. Breeding stock sales go on PA Schedule D as capital gains, not on Schedule F at all.
Line 2 — Cost or Other Basis of Livestock and Other Items Reported on Line 1
This line asks for what you paid for the resale items reported on Line 1.
Enter the original purchase price plus directly attributable costs (freight to bring the animal to your farm, vet certificate fees). Do not include feed or care during the holding period — those are operating expenses on Lines 14–32.
For example, PAUL R MILLER enters 14400 for the cost of his 12 feeder steers.
If you paid in trade (e.g., traded hay for feeder pigs), use the fair market value of what you gave up as the cost basis.
A common mistake is including the cost of feed consumed during the holding period on Line 2. Feed is a Line 17 (Feed Purchased) expense; double-counting it overstates Line 2 and triggers a desk audit.
A misconception is that Line 2 reduces gross receipts before they hit Line 3. It does — but the form makes the math explicit so the gross sale and the cost are both visible to the analyst.
Line 3 — Gross Profit (Line 1 minus Line 2)
This line asks for the simple subtraction of cost from gross receipts on resale items.
Subtract Line 2 from Line 1 and enter the result. If the result is negative (you sold for less than cost), enter the negative number with a minus sign — Pennsylvania allows farm losses on resale items.
For example, PAUL R MILLER enters 8400 (22,800 minus 14,400).
If both Line 1 and Line 2 are zero (you do no resale), enter 0 — do not leave blank, because blank fields trigger a “missing data” rejection in myPATH.
A common mistake is entering Line 1 on Line 3 and forgetting to subtract Line 2. Doing so overstates farm income by the cost basis amount.
A misconception is that you can carry a Line 3 loss against non-farm income freely. You can — Pennsylvania allows farm losses to offset other PA-40 Line 4 (net profit) income, but not wages on Line 1a.
Line 4 — Sales of Livestock, Produce, Grains, and Other Products You Raised
This line asks for gross receipts from products you produced on the farm.
Enter every dollar received for milk, eggs, raised livestock, harvested grain, vegetables, fruit, hay, maple syrup, honey, and similar farm output. Include cooperative payments, milk hauler proceeds, grain elevator settlements, and farmers-market cash.
For example, MARIA L GONZALEZ enters 47,890 for her CSA shares, farmers market sales, and wholesale produce deliveries.
If you barter raised products (e.g., trade beef for plumbing work), include the fair market value of the goods or services you received as gross income on this line.
A common mistake is reporting milk-check net (after hauling and promotion deductions). PA wants gross — the deductions become Line 22 (Storage and Warehousing) or Line 32 (Other Expenses) entries.
A misconception is that government program payments belong on Line 4. They do not — they go on Lines 5a/5b or Line 6 depending on type.
Line 5a — Total Cooperative Distributions (1099-PATR)
This line asks for the gross amount on every Form 1099-PATR you received.
Enter the sum of Box 1 (patronage dividends), Box 3 (per-unit retain allocations), and Box 5 (redemption of nonqualified notices) from all 1099-PATR forms. Pennsylvania includes all patronage dividends in farm income, even those federally deferred.
For example, PAUL R MILLER enters 3,250 in 1099-PATR distributions from Land O’Lakes.
If a cooperative reports a “qualified written notice of allocation,” include the face amount in Pennsylvania income in the year received, even if you have not redeemed it for cash.
A common mistake is excluding non-cash patronage. PA does not follow the federal deferral — it taxes face value when issued.
A misconception is that Section 199A(g) DPAD-equivalent deductions reduce Line 5a. They do not — Pennsylvania does not recognize the qualified business income or DPAD deduction.
Line 5b — Taxable Amount
This line asks for the portion of Line 5a that is taxable for PA purposes.
For most farmers, Line 5b equals Line 5a because PA treats virtually all cooperative distributions as taxable. The only common exclusion is a return of capital clearly identified by the cooperative.
For example, PAUL R MILLER enters 3,250 on Line 5b, matching his Line 5a.
If a portion is a capital return per the cooperative’s written notice, enter only the patronage and per-unit retain portion on 5b.
A common mistake is copying the federal taxable amount, which often excludes Section 199A(g) — PA does not allow that exclusion.
A misconception is that 5b can be zero whenever 5a is paid in stock. PA taxes the face value when received, regardless of payment form.
Line 6 — Agricultural Program Payments
This line asks for federal and state ag program payments such as ARC, PLC, CRP, EQIP, and disaster aid.
Enter the total from your 1099-G forms (Box 7 for ag payments) plus any direct USDA program checks not reported on a 1099-G. Conservation Reserve Program (CRP) rental payments belong here for active farmers; retired-from-farming CRP recipients may report on PA Schedule E instead.
For example, JANET T SCHRADER received $8,400 in ARC-CO payments and $1,200 in CRP rent; she enters 9,600.
If you received a disaster payment that you elected on the federal return to defer to the following year under IRC § 451(f), Pennsylvania does not allow the deferral — report it in the year received.
A common mistake is netting program payments against the underlying loss they replace. PA wants gross payment on Line 6 and the loss reflected through normal expense/depreciation lines.
A misconception is that EQIP cost-share is excludable. It is not for PA — it is fully taxable on Line 6.
Line 7a — Commodity Credit Corporation (CCC) Loans Reported Under Election
This line asks for CCC loan proceeds you elected federally to treat as income.
If you made the federal IRC § 77 election to treat CCC loans as income when received, enter the loan amount here. Pennsylvania binds you to the federal election — you cannot make a different PA choice.
For example, PAUL R MILLER received a $24,000 CCC corn loan and made the § 77 election federally; he enters 24,000.
If you did not make the election, leave 7a blank and report any forfeited loan on Line 7b in the forfeiture year.
A common mistake is entering the loan here without having made the federal election. Doing so accelerates income that should remain as debt until repaid or forfeited.
A misconception is that the election can be revoked annually. It cannot — once made, it applies to all future CCC loans unless the IRS grants a change request.
Line 7b — CCC Loans Forfeited
This line asks for the face amount of CCC loans you forfeited (kept the cash, surrendered the grain).
Enter the forfeited loan principal. If you previously reported the loan on 7a under the § 77 election, you do not report again here — that would be double income.
For example, a farmer forfeits a $10,000 corn loan in 2025 and had not previously elected; he enters 10,000 on Line 7b.
Forfeiture creates basis in the surrendered grain at the loan amount, which matters if you later repurchase or if any storage payment is reduced.
A common mistake is forgetting Line 7b entirely after forfeiture and assuming the loan is just gone. The IRS and PA both treat forfeiture as a sale.
A misconception is that you owe self-employment tax on this line for PA. PA has no SE tax — the income is regular farm income.
Line 8 — Custom Hire (Machine Work) Income
This line asks for income from doing custom work for other farmers with your equipment.
Enter total gross receipts from custom planting, harvesting, baling, hauling, spraying, or trucking that you performed for hire. Include the value of any 1099-NEC issued to you for these services.
For example, PAUL R MILLER did fall corn silage chopping for two neighbors and grossed $6,800; he enters 6800.
If custom hire is your primary activity (more than 50% of receipts), you should be on PA Schedule C, not Schedule F. The Department reclassifies returns where custom hire dominates.
A common mistake is netting custom-hire fuel against the income. Fuel is Line 18 (Gasoline, Fuel, and Oil); the income on Line 8 is gross.
A misconception is that custom work for non-farmers (e.g., landscaping for homeowners) belongs here. It does not — that is Schedule C work.
Line 9 — Other Farm Income
This line asks for any farm-related income that does not fit Lines 1–8.
Examples include refunds of fuel tax, refunds from cooperatives outside 1099-PATR, breeding fees, agritourism admission, hunting lease income from active farmland, prizes from livestock shows, and insurance proceeds for spoiled crops or destroyed inventory. Attach a statement listing each item.
For example, JANET T SCHRADER hosts a fall pumpkin festival on her farm and grosses $4,500 in admissions; she enters 4500.
If insurance proceeds replace lost depreciable property (barn fire), those go to PA Schedule D, not Line 9.
A common mistake is bundling Line 9 income into Line 4 to avoid attaching the explanation statement. The Department’s auditors look specifically for unexplained Line 9 amounts.
A misconception is that hunting lease income from idle farmland goes here. Idle-land hunting rent is rental income on PA Schedule E.
Line 10 — Gross Income (Add Lines 3, 4, 5b, 6, 7a, 7b, 8, and 9)
This line asks for the simple sum of every income line above.
Add the listed lines and enter the total. Double-check the math; the PA scanner verifies this sum and rejects mismatches.
For example, PAUL R MILLER sums 8,400 + 312,000 + 3,250 + 0 + 24,000 + 0 + 6,800 + 1,400 = 355,850.
If Line 10 is negative because Line 3 is heavily negative, enter the negative number — losses are allowed.
A common mistake is adding Line 5a instead of Line 5b. Always use the taxable amount.
A misconception is that you can subtract estimated expenses here to “preview” the bottom line. You cannot — Line 10 is gross only.
Lines 14–32 — Farm Expenses
These lines ask, line by line, for every category of farm operating expense. Each is its own field, and Pennsylvania expects amounts that match the books, not the federal figure if PA differs.
The expense categories are: 14 Car and Truck, 15 Chemicals, 16 Conservation Expenses, 17 Custom Hire, 18 Depreciation (PA, not federal), 19 Employee Benefit Programs, 20 Feed Purchased, 21 Fertilizers and Lime, 22 Freight and Trucking, 23 Gasoline, Fuel, and Oil, 24 Insurance (other than health), 25 Interest – Mortgage, 26 Interest – Other, 27 Labor Hired, 28 Pension and Profit-Sharing Plans, 29 Rent or Lease – Vehicles, Machinery, Equipment, 30 Rent or Lease – Other (Land, Animals), 31 Repairs and Maintenance, and 32 Other Expenses (with statement).
Enter only expenses that are ordinary and necessary to the farm under PA Personal Income Tax Guide Chapter 11. Personal use portions must be excluded — for example, if a pickup is 70% farm and 30% personal, only 70% of fuel, repairs, and depreciation hits Schedule F.
For example, MARIA L GONZALEZ enters 3,200 on Line 21 (Fertilizer and Lime) for her CSA fields, 1,850 on Line 23 (Fuel), and 6,400 on Line 27 (Labor Hired) for her two seasonal pickers.
The single most-watched line is Line 18 (Depreciation). Pennsylvania disallows IRC § 168(k) bonus depreciation entirely, caps Section 179 at the federal limit in effect on January 1, 1986 (currently $25,000 for assets placed in service when the federal limit is below $1,000,000, as discussed in the PA Corporation Tax Bulletin 2018-03), and requires a parallel PA depreciation schedule. Use a worksheet showing each asset, federal basis, PA basis, and current-year PA deduction.
A common Line 14–32 mistake is lumping unclassified spending into Line 32 (Other) without an attached itemized statement. The Department disallows undocumented “Other” expenses on audit and assesses tax plus 5% per month.
A misconception across all expense lines is that federal Schedule F numbers carry over unchanged. They almost never do — depreciation, meals (PA disallows the federal 50% meals deduction for self-employed farmers entirely), and certain insurance items diverge.
Line 33 — Total Expenses (Add Lines 14 through 32)
This line asks for the simple sum of every expense line.
Add Lines 14 through 32 and enter the total. The myPATH portal validates this sum against the individual fields.
For example, PAUL R MILLER sums his expense column to 298,400.
If you have a Line 32 statement attached, the statement total must equal the Line 32 amount exactly, to the dollar.
A common mistake is including capital expenditures (a new tractor) in Line 31 (Repairs). Capital purchases go through Line 18 (Depreciation) over the asset’s PA recovery period.
A misconception is that prepaid expenses are limited under PA rules the same way federal IRC § 464 limits them. PA generally follows federal prepaid-expense limits, but cash-basis farmers may deduct prepaid feed, seed, and supplies if they meet the federal three-prong test.
Line 34 — Net Farm Profit or (Loss) (Line 10 minus Line 33)
This line asks for the bottom-line farm result.
Subtract Line 33 from Line 10 and enter the result. A loss is shown as a negative number.
For example, PAUL R MILLER enters 57,450 (355,850 minus 298,400).
Carry the Line 34 amount to PA-40 Line 4 (Net Income or Loss from the Operation of a Business, Profession, or Farm). If you also file PA Schedule C or have other businesses, combine all on Line 4.
A common mistake is entering Line 34 on PA-40 Line 1a (compensation). Farm income is never compensation; it always goes on Line 4.
A misconception is that a Schedule F loss reduces PA tax dollar-for-dollar. PA’s flat 3.07% rate means a $10,000 loss saves $307 in tax — not the larger amount federal filers see at marginal rates.
Three Filled-Out Examples Using Real Scenarios
Scenario 1 — Maria Gonzalez, Small CSA Vegetable Farmer, Cash Basis
Maria runs a 12-acre CSA outside Lancaster, sells at two farmers markets, and has no employees beyond seasonal pickers paid on 1099-NEC.
| Form Section | What Maria Enters |
|---|---|
| Name of Owner | MARIA L GONZALEZ |
| Social Security Number | 198-44-5521 |
| Federal EIN | (blank) |
| Principal Agricultural Activity | MIXED VEGETABLES |
| Activity Code | 111219 |
| Method of Accounting | ☑ Cash |
| Line 4 — Raised Products Sold | 47,890 |
| Line 6 — Ag Program Payments (EQIP) | 2,400 |
| Line 10 — Gross Income | 50,290 |
| Line 21 — Fertilizers and Lime | 3,200 |
| Line 27 — Labor Hired | 6,400 |
| Line 33 — Total Expenses | 31,150 |
| Line 34 — Net Farm Profit | 19,140 |
Scenario 2 — Paul Miller, 80-Cow Dairy with Custom Hire, Cash Basis
Paul milks 80 Holsteins in Berks County, runs feeder steers on the side, does fall silage chopping for two neighbors, and made the § 77 CCC loan election years ago.
| Form Section | What Paul Enters |
|---|---|
| Name of Owner | PAUL R MILLER |
| Social Security Number | 211-67-3389 |
| Federal EIN | 23-1098765 |
| Principal Agricultural Activity | DAIRY |
| Activity Code | 112120 |
| Line 1 — Resale Livestock Sales | 22,800 |
| Line 2 — Cost of Resale | 14,400 |
| Line 4 — Milk and Raised Livestock | 312,000 |
| Line 5b — 1099-PATR Taxable | 3,250 |
| Line 7a — CCC Loan (§ 77 Election) | 24,000 |
| Line 8 — Custom Hire Income | 6,800 |
| Line 10 — Gross Income | 355,850 |
| Line 18 — Depreciation (PA) | 32,500 |
| Line 33 — Total Expenses | 298,400 |
| Line 34 — Net Farm Profit | 57,450 |
Scenario 3 — Janet Schrader, Grain and Agritourism, Accrual Basis
Janet farms 320 tillable acres in York County, hosts a fall pumpkin festival, and is on accrual to manage grain inventory and prepaid input timing.
| Form Section | What Janet Enters |
|---|---|
| Name of Owner | JANET T SCHRADER |
| Social Security Number | 180-22-7704 |
| Principal Agricultural Activity | GRAIN |
| Activity Code | 111100 |
| Method of Accounting | ☑ Accrual |
| Line 4 — Raised Grain Sold | 198,500 |
| Line 6 — ARC and CRP | 9,600 |
| Line 9 — Agritourism Admissions | 4,500 |
| Line 10 — Gross Income | 212,600 |
| Line 15 — Chemicals | 18,400 |
| Line 21 — Fertilizers and Lime | 27,800 |
| Line 33 — Total Expenses | 164,300 |
| Line 34 — Net Farm Profit | 48,300 |
How to File the Completed Form
You attach Schedule F to your PA-40 and submit through whichever channel you choose. Pennsylvania accepts four channels, and each has its own quirks.
Online via myPATH. Sign in at mypath.pa.gov, choose “File a PA Personal Income Tax Return,” and add Schedule F as a sub-form. There is no fee, payment is by ACH debit or credit card (2.49% surcharge), processing time is 4–6 weeks for direct-deposit refunds, and your proof of filing is the on-screen confirmation number plus the PDF receipt.
Paper by mail. Mail the PA-40 with Schedule F attached. If you owe tax, mail to PA Department of Revenue, Payment Enclosed, 1 Revenue Place, Harrisburg, PA 17129-0001; if you expect a refund, mail to PA Department of Revenue, Refund or Credit Requested, 3 Revenue Place, Harrisburg, PA 17129-0003; if no payment and no refund, use 2 Revenue Place, Harrisburg, PA 17129-0002. There is no filing fee. Pay by check made to PA Dept of Revenue. Processing time is 8–12 weeks. Proof of filing is your USPS Certified Mail receipt.
E-file via commercial software. TurboTax, Drake, TaxSlayer, H&R Block, and others all transmit through the Federal/State Modernized e-File program. Software fees vary; payment is ACH or card; processing matches myPATH at 4–6 weeks; proof is the IRS/PA acknowledgment.
In person at a PA Department of Revenue District Office. Walk-in filing is free, accepted at any district office, and your proof is the date-stamped copy the receptionist returns to you. Processing time matches paper mail.
The deadline for the 2025 PA-40 with Schedule F is April 15, 2026. An automatic extension to October 15, 2026 is available by filing federal Form 4868 (PA recognizes it) or PA Form REV-276, but the extension is to file, not to pay — interest at the Pennsylvania interest rate accrues from April 15.
What Happens After You File
The Department’s intake center scans the return, matches Schedule F to your PA-40 by SSN, and runs validation checks. If the math reconciles and the PA depreciation schedule matches the asset listing, the return moves to refund or balance-due processing within 4–6 weeks for e-file and 8–12 weeks for paper.
If the Department flags a discrepancy — most often a Line 18 PA depreciation mismatch with federal Form 4562, or an unexplained Line 32 amount — you receive a REV-1832 inquiry letter asking for documentation. You have 30 days to respond. A non-response leads to a Notice of Adjustment that disallows the questioned items and assesses tax, 5%-per-month penalty, and interest.
You can track refund status at Where’s My PA Refund using your SSN and refund amount. Audit selection for Schedule F is risk-based: returns with farm losses three years running, large Line 32 “Other” amounts, or PA-vs-federal depreciation gaps over 25% are the most common audit triggers under the Department’s audit selection criteria.
If you discover an error after filing, file an amended PA-40 with a corrected Schedule F and check the “Amended Return” box. The statute of limitations for refund claims is 3 years from the original due date.
Mistakes to Avoid When Filling Out the Form
These are the errors the Department’s farm-return analysts cite most often, in roughly the order of frequency.
- Using the federal Schedule F number on Line 18. Federal bonus depreciation flows in and inflates the deduction; PA disallows it and assesses tax plus penalty.
- Capping Section 179 at the federal limit. PA caps at the 1986-era federal limit; using the current $1.16M federal cap creates a multi-thousand-dollar deduction overstatement.
- Writing the farm DBA on the Name of Owner line. The schedule orphans from the PA-40 and processing stalls 6–10 weeks.
- Netting milk-check deductions inside Line 4. The Department wants gross receipts on Line 4 and the deductions on the appropriate expense line.
- Putting CCC loan principal on 7a without the § 77 election. This accelerates income improperly and triggers an inquiry.
- Failing to attach the Line 32 (Other) itemized statement. The Department disallows the entire Line 32 amount on audit.
- Reporting breeding livestock sales on Line 4. Breeding stock sales belong on PA Schedule D, not Schedule F.
- Switching accounting methods without IRS Form 3115. PA recomputes income on the original method and assesses penalties.
- Mixing personal-use vehicle expenses into Line 14. Only the farm-use percentage is allowed; the rest is disallowed plus penalty.
- Forgetting to carry Line 34 to PA-40 Line 4. The PA-40 itself reports zero farm income, the Department assesses tax on Line 10 gross with no deductions.
- Using the prior-year revision of Schedule F. The scanner rejects the form at intake; the entire return is treated as not filed until corrected.
- Reporting program payments net of underlying losses. Gross program payments belong on Line 6; losses flow through expense lines.
Do’s and Don’ts
- ✅ Do download the current 09-25 revision fresh each year — old forms are scanner-rejected.
- ✅ Do keep a parallel PA depreciation schedule from day one — reconstructing it years later is brutal.
- ✅ Do attach an itemized statement for Line 32 and Line 9 — undocumented amounts get disallowed.
- ✅ Do use whole dollars, no cents, all caps, blue or black ink — the scanner reads better.
- ✅ Do file by April 15, 2026 even if you owe — extensions are to file, not to pay.
- ✅ Do keep records for at least 4 years — PA’s audit window is 3 years plus the year of filing.
- ❌ Don’t copy federal Line 14 (depreciation) directly to PA Line 18 — they almost always differ.
- ❌ Don’t lump unrelated expenses into “Other” — itemize on a statement.
- ❌ Don’t report partnership farm income on Schedule F — it goes on PA Schedule J.
- ❌ Don’t deduct meals as a self-employed farmer — PA disallows the federal 50% meal deduction.
- ❌ Don’t forget to sign the PA-40 itself — the Department treats unsigned returns as unfiled.
- ❌ Don’t report rental-from-idle-land on Schedule F — that is PA Schedule E income.
Pros and Cons of Filing on Your Own vs. With Help
Filing pro se saves money but raises error risk on a form with this many PA-vs-federal traps.
Pros of Filing Yourself
- ✅ No preparer fees — saves $250–$600 for a typical farm return.
- ✅ Full control over the depreciation worksheet, which matters during audit.
- ✅ Faster turnaround — you file when ready, not when the preparer is available.
- ✅ Builds tax literacy that compounds across years.
- ✅ myPATH is free and validates math automatically.
Cons of Filing Yourself
- ❌ PA depreciation rules trip up most first-time farm filers.
- ❌ Section 179 cap differences cost real tax money when missed.
- ❌ Line 32 “Other” expense itemization is tedious and easy to mishandle.
- ❌ No audit defense if the Department challenges you.
- ❌ Software defaults often pull federal numbers into PA fields silently.
Pros of Hiring a CPA or Enrolled Agent
- ✅ Expert handling of PA depreciation reconciliation.
- ✅ Representation rights before the Department under Form REV-677.
- ✅ Year-round planning beyond the return itself.
- ✅ Catches credits and elections (e.g., REAP) you may not know about.
- ✅ Reduces audit-trigger risk through cleaner classification.
Cons of Hiring
- ❌ Cost — $400–$1,200+ for farm returns.
- ❌ Quality varies; not every preparer knows PA farm rules.
- ❌ Communication delays during peak season.
- ❌ You still need clean records — preparers cannot manufacture them.
- ❌ Some preparers default to federal-equals-PA, the same trap pro se filers hit.
PA Schedule F vs. PA Schedule C: Which One Do I File?
Some farm-adjacent businesses straddle the line. Here is how the Department decides.
| Factor | PA Schedule F (Farm) | PA Schedule C (Business) |
|---|---|---|
| Primary activity | Producing or raising agricultural products | Selling services or processing purchased goods |
| Custom hire share | Less than 50% of receipts | More than 50% of receipts |
| Agritourism | Allowed if tied to active farm | Required if no active farm |
| Estimated tax safe harbor | Two-thirds rule under 72 P.S. § 7325(c) | Standard quarterly safe harbor |
| Inventory rules | Cash or accrual; both common | Mostly accrual once inventory is material |
FAQs
Do I file PA Schedule F if my farm had a loss?
Yes. You must file Schedule F any year you operate a farm, regardless of profit or loss. Losses on Line 34 flow to PA-40 Line 4 and offset other business income.
Do I write my farm name or my legal name on the Name of Owner line?
No to the farm name. PA wants the owner’s legal name exactly as it appears on PA-40 Line 1, in all caps, matching your Social Security card.
Does PA allow federal bonus depreciation on Line 18?
No. Pennsylvania disallows IRC § 168(k) bonus depreciation entirely. You must compute PA depreciation without it on a separate worksheet.
Is the Section 179 limit the same on PA Schedule F as on federal?
No. Pennsylvania caps Section 179 at the federal limit in effect on January 1, 1986, which is dramatically lower than the current federal cap.
Can I deduct meals while working in the field on Line 32?
No. Pennsylvania disallows the federal 50% meal deduction for self-employed farmers. The expense is personal under PA rules.
Do I need to attach federal Schedule F to my PA-40?
Yes. Pennsylvania requires a copy of federal Schedule F and Form 4562 attached so the Department can reconcile depreciation and method elections.
Should CRP rental payments go on Line 6 or PA Schedule E?
Yes to Line 6 if you are still actively farming the rest of your land. Retired-from-farming CRP recipients report on PA Schedule E instead.
Do I report sales of breeding cows on Line 4?
No. Breeding livestock sales are capital transactions reported on PA Schedule D, not on Schedule F.
Is patronage from my co-op taxable on Line 5b even if paid in stock?
Yes. Pennsylvania taxes the face value of qualified written notices of allocation in the year received, regardless of whether you got cash.
Can I switch from cash to accrual to lower this year’s tax?
No. Once elected, the method is locked unless you file federal Form 3115, get IRS consent, and attach the approved form to your PA-40.
Do I owe Pennsylvania self-employment tax on Line 34 net profit?
No. Pennsylvania has no self-employment tax. Net farm profit is taxed at the flat 3.07% personal income tax rate only.
Do I file Schedule F for a farm partnership I’m in?
No. Partnerships and S corporations file PA-20S/PA-65, and you report your share on PA Schedule J or directly on PA-40 Line 4.
Is the EIN box mandatory if I have employees?
Yes to entering the EIN you have, but the box itself is optional on Schedule F. Your SSN is the mandatory identifier on this schedule.
Do I need to file a separate PA Schedule F for each farm I operate?
No. All farm activities you operate as a sole proprietor are combined onto one Schedule F. Use one consolidated set of income and expense lines.
Related reading
- How to Fill Out Pennsylvania Form PA-40 Schedule A (w/Examples) + FAQs
- How to Fill Out Pennsylvania Form PA-40 Schedule C (w/Examples) + FAQs
- How to Fill Out Pennsylvania Form PA-40 Schedule D (w/Examples) + FAQs
- How to Fill Out Pennsylvania Form PA-40 Schedule SP (w/Examples) + FAQs
- How to Fill Out Pennsylvania Form PA-40 Schedule UE (w/Examples) + FAQs
- How to Fill Out Pennsylvania Form REV-748 (w/Examples) + FAQs