Additions, Penalties and Fees

(a) In case of failure to file any return required under this article on the date prescribed therefor, determined with regard to any extension of time for filing, unless it is shown that such failure is due to reasonable cause and not due to wilful neglect, there shall be added to the amount required to be shown as tax on such return five per cent of the amount of such tax if the failure is for not more than one month, with an additional five per cent for each additional month or fraction thereof during which such failure continues, not exceeding twenty-five per cent, in the aggregate, but in no case shall the amount added be less than five dollars ($5). The amount of tax required to be shown on the return shall, for purposes of computing the additions for the first month, be reduced by the amount of any part of the tax which is paid on or before the date prescribed for payment of the tax and by the amount of any credit against the tax which may be claimed on the return. The amount of tax required to be shown on the return shall, for purposes of computing the addition for any subsequent month, be reduced by the amount of any part of the tax which is paid by the beginning of the subsequent month and by the amount of any credit against the tax which may be claimed on the return.

(b) (1) If any part of any underpayment of any tax imposed by Part II of this article is due to negligence or intentional disregard of rules and regulations, but without intent to defraud, there shall be added to the tax an amount equal to five per cent of the underpayment.

(2) If any part of any underpayment of any tax imposed by Part II of this article is due to negligence or intentional disregard of rules and regulations, but without intent to defraud, and the underpayment is from a taxpayer omitting from income an amount properly includable therein which is in excess of twenty-five per cent of the amount of income stated on the taxpayer's return, there shall be added to the tax an amount equal to twenty-five per cent of the underpayment.

((b) amended Aug. 4, 1991, P.L.97, No.22)

(c) If any part of any underpayment of tax required under this article to be shown on a return is due to fraud, there shall be added to the tax an amount equal to fifty per cent of the underpayment. This amount shall be in lieu of any amount determined under subsection (b) or (h).

(d) (1) If any taxpayer fails to pay all or any part of an installment of estimated tax, he shall be deemed to have made an underpayment of estimated tax. There shall be added to the tax for the taxable year an amount at the rate established pursuant to section 806 of the act of April 9, 1929 (P.L.343, No.176), known as "The Fiscal Code," upon the amount of the underpayment for the period of the underpayment but not beyond the fifteenth day of the fourth month following the close of the taxable year. The amount of the underpayment shall be the excess of the amount of the installment which would be required to be paid if the estimated tax were equal to ninety per cent of the tax (two-thirds in the case of an individual described in subsection (e) of section 325) shown on the return for the taxable year (or if no return was filed, of the tax for such year) over the amount, if any, of the installments paid on or before the last day prescribed for such payment. No underpayment shall be deemed to exist with respect to an installment otherwise due on or after the taxpayer's death or, in the case of a decedent's estate or a trust created by the decedent to receive the residue of the decedent's estate, for a period of two years after the decedent's death.

(2) No addition to tax shall be imposed if the total amount of all payments of estimated tax made on or before the last date prescribed for the payment of such installment equals or exceeds the lesser of:

(A) The amount which would have been required to be paid on or before such date if the estimated tax were an amount equal to the tax computed after consideration of the special tax provisions for poverty, at the rates applicable to the taxable year, but otherwise on the basis of the facts shown on his return for, and the law applicable to, the preceding taxable year; or

(B) An amount equal to ninety per cent of the tax computed, at the rates applicable to the taxable year, on the basis of the actual income for the months in the taxable year ending before the month in which the installment is required to be paid, or, in the case of a trust or estate, an amount equal to ninety per cent of the applicable percentage of the tax for the taxable year as determined pursuant to section 6654(d)(2)(C)(ii) of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 6654), as amended, at rates applicable to the taxable year, computed on an annualized basis in accordance with United States Treasury regulations, based upon the actual income for the months of the taxable year ending with the last day of the second preceding month prior to the month in which the installment is required to be paid.

((2) amended July 2, 2012, P.L.751, No.85)

((d) amended July 7, 2005, P.L.149, No.40)

(e) Any person required to collect, account for and pay over any tax imposed by this article who wilfully fails to collect such tax or truthfully account for and pay over such tax, or wilfully attempts in any manner to evade or defeat any such tax or the payment thereof, shall, in addition to other penalties provided by law, be liable to a penalty equal to the total amount of the tax evaded or not collected or not accounted for and paid over. No penalty shall be imposed under subsection (b), (c) or (h) for any offense to which this subsection (e) is applicable. The term "person" as used in this subsection includes an officer or employe of a corporation, or a member or employe of a partnership, who as such officer, employe or member is under a duty to perform the act in respect of which the violation occurs.

(f) (1) Any person required under the provisions of section 317 to furnish a statement to an employe who wilfully furnishes a false or fraudulent statement, or who wilfully fails to furnish a statement in the manner, at the time, and showing the information required under section 317 and the regulations prescribed thereunder, shall, for each such failure, be subject to a penalty of fifty dollars ($50) for each employe.

(2) Any person required to furnish an information return who furnishes a false or fraudulent return or who fails to file or provide an information return shall be subject to a penalty of two hundred fifty dollars ($250).

(3) Every partnership, estate, trust or Pennsylvania S corporation required to file a return with the department under the provisions of section 330.1 or 335(c) who furnishes a false or fraudulent return or who fails to file the return in the manner and at the time required under section 330.1 or 335(c) shall be subject to a penalty of $250 for each failure.

(4) Any person required to file a copy of form 1099-MISC or 1099-NEC with the department under the provisions of section 335(f) who wilfully furnishes a false or fraudulent form or who wilfully fails to file the form in the manner, at the time and showing the information required under section 335(f) shall, for each such failure, be subject to a penalty of fifty dollars ($50). ((4) amended June 30, 2021, P.L.124, No.25)

(5) Any person required under the provisions of section 335(f) to furnish a copy of form 1099-MISC or 1099-NEC to a payee who wilfully furnishes a false or fraudulent form or who wilfully fails to furnish a form in the manner, at the time and showing the information required by section 335(f) shall, for each such failure, be subject to a penalty of fifty dollars ($50). ((5) amended June 30, 2021, P.L.124, No.25)

(6) Any person required to file an annual statement with the department under the provisions of section 324.5 who wilfully furnishes a false or fraudulent statement or who wilfully fails to file the statement in the manner, at the time and showing the information required under section 324.5 and the regulations prescribed under section 324.5 shall, for each such failure, be subject to a penalty of fifty dollars ($50).

(7) Any person required under the provisions of section 324.5 to furnish an annual statement to a lessor who wilfully furnishes a false or fraudulent statement or who wilfully fails to furnish a statement in the manner, at the time and showing the information required by section 324.5 and the regulations prescribed under section 324.5 shall, for each such failure, be subject to a penalty of fifty dollars ($50).

((f) amended Oct. 30, 2017, P.L.672, No.43)

(h) If any amount of tax required to be withheld by an employer and paid over to the department under section 319 or 319.1 is not paid on or before the due date prescribed for filing the quarterly return under section 318 or 318.1, determined without regard to an extension of time for filing, there shall be added to the tax and paid to the department each month five per cent of such underpayment for each month or fraction thereof from the due date, for the period from the due date to the date paid; but the underpayment shall, for purposes of computing the addition for any month, be reduced by the amount of any part of the tax which is paid by the beginning of that month. The total of such additions shall not exceed fifty per cent of the amount of tax required to be shown on the return reduced by the amount of any part of the tax which is paid by the return due date and by the amount of any credit against the tax which may be claimed on the return. ((h) amended Oct. 30, 2017, P.L.672, No.43)

(i) If any individual, estate or trust files what purports to be a return required under section 330 but which does not contain information on which the substantial correctness of the self-assessment may be judged, or contains information that on its face indicates that the self-assessment is substantially incorrect and the self-assessment is due to a position which is frivolous or due to a desire (which appears on the purported return) to delay or impede the administration of Pennsylvania Income Tax laws, then such individual, estate or trust shall pay a penalty of five hundred dollars ($500). The penalty imposed by this subsection shall be in addition to any other penalty provided by law. ((i) added Aug. 4, 1991, P.L.97, No.22)

(j) If any amount of tax required to be withheld by a partnership, association, Pennsylvania S corporation or lessee and paid over to the department under section 324 or 324.4 is not paid on or before the date prescribed therefor, there shall be added to the tax and paid to the department each month five per cent of such underpayment for each month or fraction thereof from the due date, for the period from the due date to the date paid; but the underpayment shall, for purposes of computing the addition for any month, be reduced by the amount of any part of the tax which is paid by the beginning of that month. The total of such additions shall not exceed fifty per cent of the amount of such tax. ((j) amended Oct. 30, 2017, P.L.672, No.43)

(k) If a tax payment is made and the payment does not comply with section 332.1 when required, the taxpayer that is liable for the tax shall, in addition to any other penalty, interest or addition provided by law, be liable for a penalty of three per cent of the payment remitted not to exceed five hundred dollars ($500). ((k) added June 30, 2021, P.L.124, No.25)

(352 amended June 29, 1984, P.L.445, No.94) Compiler's Note: Section 40(3) of Act 25 of 2021 provided that the addition of subsection (k) shall apply to payments made after December 31, 2021. Compiler's Note: Section 30(2) of Act 85 of 2012, which amended subsec. (d)(2), provided that the amendment shall apply to tax years beginning on or after January 1, 2013. Compiler's Note: Section 24(11) of Act 40 of 2005, which amended subsection (d), provided that the amendment shall apply to payments made after January 30, 2006.