Received an Application of Credit Notice from PA?

Received an Application of Credit Notice from PA? What’s next.

New letter notices issued by the PA Department of Revenue
The PA Department of Revenue (PA DOR) recently began mailing letters to PA individual taxpayers who may have claimed a credit for an overpayment of PA personal income taxes.

Let’s look at these Application of Credit Notice letters - and what to do if you receive one.

PA DOR online tax system generated notices
The PA DOR has a new online tax system, the Pennsylvania Tax Hub (PATH). This system enables the agency to generate new notices to keep taxpayers and tax practitioners well-informed.

One of the new notices that may be seen more frequently is the Application of Credit Notice.

The Application of Credit Notice is an informational notice sent to taxpayers any time they request a credit to the next tax period. A credit occurs when there is an overpayment on the Personal Income Tax Return, and it is elected to carry all or a portion of this overpayment to the next tax period.

What to do if you receive an Application of Credit Notice
Upon receipt of this notice, it is advised to compare the amount of the overpayment on the notice to the tax return from that period. Important note: This notice will not require action unless the credit does not match your tax return.

The PA DOR emphasizes that the new notices will contain standard language that may be misleading. For example, the Application of Credit notice contains standard language that reads “The department has conducted an examination of the Personal Income Tax return that you filed.” This standard language will be included on every notice, whether the department has reviewed the return, or it was processed as filed. It does not imply that changes were made to the return filed.

Please consult your Herbein tax advisor with additional questions regarding this notice at info@herbein.com.

Article prepared by Annika McKinney.