Budget & Taxes (Income Tax)

in committee · Pennsylvania · Senate Mar 12, 2026

SB 1208: An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in corporate net income tax, further providing for definitions, for imposition of tax, for reports and payment of tax and for consolidated reports; and, in general provisions, further providing for underpayment of estimated tax.

This bill modifies Pennsylvania's corporate net income tax law to update how taxable income is calculated for corporations, particularly those operating across state lines. It clarifies definitions for taxable income and adjusts rules for dividend deductions, restricting additional deductions for dividends between companies in the same unitary group after December 31, 2026. The legislation also introduces stricter limits on deductions for intangible and interest expenses related to transactions with affiliated entities, while providing tax credits to offset taxes paid by related companies in other jurisdictions. Additionally, the bill updates provisions for underpayment of estimated taxes and establishes requirements for consolidated tax reporting.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill strengthens corporate tax code by clarifying definitions and restricting certain deductions, promoting fiscal responsibility and closing potential loopholes.75% confidence

Sub-Topics Business Taxes Income Tax

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in committee · Pennsylvania · House Mar 24, 2026

HB 141: 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 imposition of tax.

This bill amends Pennsylvania's Tax Reform Code to increase personal income tax rates for taxable years beginning after December 31, 2025. It raises the tax rate for residents and nonresidents from 3.7% to 9.7% on all income, while maintaining a 3.7% rate for specific income categories. The legislation also clarifies how trust income is taxed by aligning Pennsylvania rules with federal Internal Revenue Code provisions regarding grantor trusts.

Topics ✗ Budget & TaxesOpposes Budget & TaxesBill increases personal income tax rates from 3.7% to 9.7%, directly raising taxes on residents and nonresidents, which opposes fiscal relief and increases tax burden.95% confidence

Sub-Topics Income Tax

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in committee · Pennsylvania · Senate Mar 30, 2026

SB 1255: 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 classes of income and providing for exclusion of tips from taxable income.

This bill amends Pennsylvania's Tax Reform Code to exclude tips from taxable personal income. It directly affects employees who receive tips, such as restaurant and hospitality workers, by removing these earnings from their taxable income calculations. The legislation defines tips as voluntary customer payments and explicitly excludes employer-mandated fees or service charges from this exclusion. The Department of Revenue will create regulations to implement the change and prevent fraud or misclassification of wages as tips. The law takes effect 60 days after passage and applies to the next fiscal year following that date.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill excludes tips from taxable income, providing tax relief to service workers and reducing their tax burden.85% confidence ✓ Labor & EmploymentSupports Labor & EmploymentBill excludes tips from taxable income, directly increasing take-home pay for tipped workers and protecting their earnings.85% confidence

Sub-Topics Income Tax Gig Economy

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in committee · Pennsylvania · House Feb 9, 2026

HB 2201: 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 and providing for physical health improvement tax credit.

HB 2201 creates a new tax credit for Pennsylvania residents who pay qualified fitness expenses, such as gym memberships or in-person exercise classes at eligible facilities. It defines "qualified sports and fitness expenses" to exclude virtual instruction (unless live), books, and one-on-one training, and specifies that fitness facilities must not offer golf/hunting/sailing and must comply with anti-discrimination laws. The credit allows single filers to claim up to $500 and joint filers up to $1,000 annually, but it is non-refundable and cannot be carried forward to future tax years. This provision applies to taxable years beginning after December 31, 2024, directly affecting residents who incur qualifying physical health-related expenses.

Topics ✓ Budget & TaxesSupports Budget & TaxesCreates new tax credit for fitness expenses, providing direct tax relief to residents under personal income tax code, aligning with tax relief indicators for middle/lower income.95% confidence

Sub-Topics Income Tax Tax Credits

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in committee · Pennsylvania · Senate Jan 30, 2026

SB 1153: An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in corporate net income tax, further providing for imposition of tax; and abrogating a regulation.

SB 1153 modifies Pennsylvania's corporate net income tax rules to clarify when remote work performed by employees affects tax liability. It states that work by Pennsylvania-resident employees who work remotely in Pennsylvania less than 50% of their time (and whose primary work location is outside Pennsylvania) is no longer subject to Pennsylvania corporate tax. The bill replaces an existing regulation (61 Pa. Code § 153.23(b)) that conflicted with this change. The amendment applies to tax years beginning after December 31, 2023.

Topics ✗ Budget & TaxesOpposes Budget & TaxesReduces corporate tax liability for remote workers in PA <50% time, decreasing state tax revenue. Explicitly changes tax rules to exclude certain income.90% confidence

Sub-Topics Business Taxes Income Tax

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in committee · Pennsylvania · House Jan 29, 2026

HB 2170: An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in tax credit and tax benefit administration, further providing for definitions; and establishing the employer blood donation tax credit.

HB 2170 creates a new employer blood donation tax credit in Pennsylvania. It allows employers who provide paid time off for employees to donate blood at nonprofit-organized blood drives to claim a $20 tax credit per verified donation. The credit applies to tax years 2025 through 2029 and can be used against state income tax, but it cannot reduce tax below zero and is capped at $500,000 total annually. This policy directly affects employers who partner with nonprofit blood banks to host blood drives for their employees.

Topics ✓ Budget & TaxesSupports Budget & TaxesCreates employer tax credit reducing state tax burden, aligning with tax relief support indicators for targeted fiscal incentives.95% confidence ✓ HealthcareSupports HealthcareCreates tax credit to incentivize employer-sponsored blood donations, directly supporting public health blood supply initiatives and access to critical medical resources.90% confidence ✓ Labor & EmploymentSupports Labor & EmploymentCreates tax credit for employers providing paid time off for blood donations, expanding a specific worker benefit (paid time for health-related activities) without mandating it.75% confidence

Sub-Topics Income Tax Tax Credits

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passed · Pennsylvania · House Jan 30, 2026

HB 1129: An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in corporate net income tax, repealing provisions relating to penalties and to repealer and effective date; establishing the Net Operating Loss Transfer Program; and imposing penalties.

HB 1129 amends Pennsylvania's corporate tax code to establish a new program allowing businesses to transfer unused net operating losses to other corporations, directly affecting companies with tax losses they previously couldn't utilize. The bill repeals outdated penalty provisions and a repealer clause from the 1971 tax code while adding new penalties for non-compliance. Key provisions include creating a formal mechanism for loss transfers and updating tax enforcement rules. This bill is pending in the legislature (last reported as committed on 2025-09-10) and would change how corporations manage tax liabilities under Pennsylvania law.

Topics ✓ Budget & TaxesSupports Budget & TaxesAmends tax code to establish loss transfer program and update enforcement, promoting fiscal responsibility through modernized tax administration.95% confidence

Sub-Topics Business Taxes Income Tax

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passed · Pennsylvania · House Jun 25, 2025

HB 1610: 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 and for income taxes imposed by other states and providing for provisions for overtime pay; in corporate net income tax, further providing for definitions, for determination of net loss deduction, for imposition of tax, for reports and payment of tax, for timely mailing treated as timely filing and payment and for additional withholding requirements, repealing provisions relating to consolidated reports, further providing for extension of time to file reports, for changes made by Federal Government, for limitations on assessments, for definitions, for manufacturing innovation and reinvestment deduction, for enforcement, rules and regulations, inquisitorial powers of the department, for retention of records and for penalties; in tax credit and tax benefit administration, further providing for definitions and providing for application of tax credits or tax benefits to a unitary business; providing for working Pennsylvanians tax credit; and, in general provisions, further providing for estimated tax, for underpayment of estimated tax and for restatement of tax liability under treaties.

HB 1610 amends Pennsylvania's corporate tax rules to change how businesses with multiple related entities (unitary businesses) calculate their state tax liability. Starting in 2026, these businesses will determine Pennsylvania tax based on their total sales within the state relative to their nationwide sales, using a new "water's-edge" apportionment method. The bill specifically revises definitions and tax calculation rules for corporations, including adjustments to how income from intercompany transactions is treated and how nonbusiness income is allocated. This primarily affects large corporations operating across state lines as unified business groups. The changes aim to align Pennsylvania's tax calculation with federal reporting requirements for such entities.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill amends corporate tax rules with 'water's-edge' apportionment and adds Working Pennsylvanians tax credit, promoting fiscal responsibility and tax relief for workers.85% confidence

Sub-Topics Business Taxes Income Tax Tax Credits

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in committee · Pennsylvania · House Jan 22, 2025

HB 217: 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 classes of income.

HB 217 amends Pennsylvania's tax code to require businesses to deduct start-up costs (like initial expenses for new ventures) entirely in the year incurred, rather than spreading deductions over multiple years as permitted under federal rules. This change affects new businesses and entrepreneurs with start-up expenses by altering how they calculate state personal income tax. The bill also allows business net losses to offset other income in the same tax year. These provisions apply to tax years beginning after December 31, 2025.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill allows immediate deduction of business start-up costs, reducing taxable income for new businesses and providing tax relief.90% confidence

Sub-Topics Business Taxes Income Tax

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in committee · Pennsylvania · House Jan 22, 2025

HB 218: 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 classes of income.

HB 218 would allow Pennsylvania taxpayers to deduct mortgage insurance premiums from their personal income tax. The deduction applies to premiums paid for residential mortgage insurance, including coverage against loan default or nonpayment on home loans. Taxpayers can claim this deduction on their annual tax return, but it cannot reduce taxable income below zero. This change would take effect for tax years beginning after December 31, 2025.

Topics ✓ Budget & TaxesSupports Budget & TaxesProvides tax deduction for mortgage insurance, offering relief to homeowners by reducing taxable income under personal income tax rules.90% confidence

Sub-Topics Income Tax

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