An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, providing for phoenix employee and returnship tax credits; and imposing penalties.

HB 775 creates tax credits for Pennsylvania businesses hiring "phoenix employees" (workers who were out of the workforce for two years or received a 50%+ pay increase) in high-demand occupations. Companies can claim a credit equal to twice the state personal income tax rate on qualifying employees' earnings, applied against corporate, franchise, or personal income taxes. The bill limits annual credits to $150,000 in the first year, $300,000 in the second, and $450,000 thereafter, with $15 million allocated for the first year. Businesses must commit to retaining employees for three years and maintaining operations in Pennsylvania for five years to qualify. The credit directly affects employers in high-demand fields and workers reentering the workforce after extended gaps.