An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in personal income tax, further providing for definitions.

HB 1537 amends Pennsylvania's Tax Reform Code of 1971 to clarify the definition of "compensation" for personal income tax purposes. The bill explicitly includes certain deferred compensation (like 409A plan distributions) while excluding specific payments such as disability benefits, retirement payments, public assistance, and employer-provided health benefits. This definition affects how Pennsylvania taxes income from employment, ensuring consistent application of tax rules for taxpayers and employers. The change aligns Pennsylvania's tax code with specific federal provisions but does not alter tax rates or create new taxes. The bill is currently referred to the Finance committee.