Pennsylvania Code › Title 61 - REVENUE › Part I - Department of Revenue › Subpart A - General Provisions › Chapter 4 - INTEREST › Section 4.6 - Overpayment

Current through Register Vol. 54, No. 28, July 13, 2024
The Commonwealth is liable to pay interest on overpayments
					 of tax originally due and payable on or after January 1, 1982 at the rate
					 established for underpayments of the same tax for the same period. The
					 overpayment will accrue interest at the rate in effect on the date the
					 overpayment is deemed by the act to have occurred as described by the following
					 paragraphs, subject to adjustments of the rate on January 1 of each succeeding
					 year as in the case of underpayments under section 806.1(b) of the FC
					 (72
					 P. S. §
											806.1(b)).
					 Interest will cease to accrue under §
										4.7 (relating to termination of
					 interest).
(1)
Overpayment of
				  tax.
An overpayment is a payment of tax which is determined in the
				  manner provided by statute not to be legally due.
(2)
Overpayment of interest or
				  penalty.
An overpayment of interest or penalty may not bear interest
				  under section 806.1(a)(7) of the FC (72 P. S. §
											806.1(a)(7)).
(3)
Date of overpayment.
Interest will be allowed and paid for the period during which the Commonwealth
				  retained the overpayment, beginning with the date of overpayment, except that
				  the following applies:
(i)
Withheld
				  taxes.
Taxes which are actually deducted and withheld at the source
				  are deemed to be overpaid by the employe on the last day prescribed by law for
				  filing the return for the taxable year, determined without regard to an
				  extension of time for filing. Taxes withheld by the employer are deemed
				  overpaid by the employer on the last day prescribed by statute for filing the
				  return for the taxable period or the actual payment date, whichever is later
				  under section 806.1(a)(1) of the FC (72 P. S. §
												806.1(a)(1)).
(ii)
Installments.
An amount
				  of tax overpaid as an installment payment, tentative tax or estimated tax is
				  deemed to be overpaid on the last day prescribed by statute for filing the
				  final return or report for the taxable year determined without regard for an
				  extension of time for filing, or the actual payment date, whichever is later,
				  under section 806.1(a)(2) of the FC (72 P. S. §
												806.1(a)(2)).
(iii)
Payments before due
				  date.
An overpayment made before the due date prescribed by statute
				  for payment of the tax is deemed to have been made on the due date under
				  section 806.1(a)(3) of the FC (72 P. S. §
												806.1(a)(3)).
(iv)
Taxes collected.
Taxes
				  collected by an officer, licensee or collector will be deemed to have been
				  overpaid on the first date that the tax is required by statute to be reported
				  and transmitted to the Department by the officer, licensee or collector, or on
				  the date the tax is actually reported and transmitted to the Commonwealth,
				  whichever is later, under section 806.1(a)(6) of the FC (72 P. S. §
												806.1(a)(6)).
(v)
Administrative or appellate
				  review procedure.
If a taxpayer commences an administrative or
				  appellate review procedure by claiming to have made an overpayment, or
				  contesting the Department's refusal or denial of its claim, the claimed
				  overpayment is deemed to have been made on the 60th day following the date of
				  initiation of the review or appellate procedure.
Example.
A corporation files its 1982
					 annual corporate tax report on April 15, 1983, reporting and paying its capital
					 stock tax liability at $5,000. No tentative tax payment was made or required to
					 be made. Settlement of this liability as reported is made on July 15,
					 1983.
Taxpayer files a petition for resettlement with the Board
					 of Appeals on August 15, 1983, claiming an exemption for certain assets. The
					 Board of Appeals refuses the petition on December 20, 1983.
Taxpayer files a petition for review with the Board of
					 Finance and Revenue on December 31, 1983. The Board of Finance and Revenue
					 resettles the tax liability at $4,000, granting a tax credit of $1,000. The
					 initiation date of the administrative review procedure is August 15, 1983-the
					 filing date of the petition for resettlement with the Board of Appeals-not
					 December 31, 1983. Therefore, interest accrues on the $1,000 tax credit
					 beginning October 14, 1983, the 60th day following the initiation of the
					 administrative review.