Budget & Taxes (Income Tax)

in committee · Pennsylvania · Senate Mar 6, 2025

SB 392: 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.

SB 392 amends Pennsylvania's Tax Reform Code to allow a new deduction for real property taxes paid on a homeowner's primary residence (defined as "homestead") that exceed the federal limit under 26 U.S.C. § 164(b)(6)(B). This deduction applies only to taxes paid to school districts or equivalent city taxes, excluding payments in lieu of taxes or penalties. The deduction cannot reduce taxable income below zero and applies to tax years beginning after December 31, 2025. It directly affects Pennsylvania homeowners with property taxes exceeding the federal cap, providing a limited tax benefit for their primary residence.

Topics ✓ Budget & TaxesSupports Budget & TaxesProvides tax deduction for homeowners' property taxes, reducing taxable income and offering relief per Tax Reform Code amendment.95% confidence

Sub-Topics Income Tax

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in committee · Pennsylvania · Senate Jan 29, 2025

SB 206: 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, for when withholding not required, for returns and liability and for return of Pennsylvania S corporation.

SB 206 modifies Pennsylvania's personal income tax by setting a 3.07% rate for taxable years ending in 2025, after which no personal income tax will be collected for years beginning in 2026 or later. It also eliminates employer withholding requirements starting in 2026 if employees certify they had no prior-year tax liability and expect none for the current year. Additionally, the bill repeals the requirement for residents to file personal income tax returns and for Pennsylvania S corporations to submit annual returns for taxable years starting in 2026. These changes directly affect Pennsylvania residents, employees, employers, and S corporations.

Topics ✓ Budget & TaxesSupports Budget & TaxesEliminates personal income tax for all taxpayers after 2025, providing direct tax relief and reducing government revenue collection from individual income.95% confidence

Sub-Topics Business Taxes Income Tax

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in committee · Pennsylvania · House Mar 5, 2025

HB 814: 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, providing for tax credit for spouses of first responders killed in line of duty.

HB 814 creates a tax credit for Pennsylvania residents who are spouses of first responders (including police, firefighters, EMTs, or emergency rescue personnel) killed while performing their duties. The credit equals 100% of the real property tax paid on the couple's primary residence, up to the amount of personal income tax due for the year. Spouses who remarry after their partner's death or who claim other property tax rebates are ineligible. The Department of Revenue may require documentation to verify the residence qualifies as the principal home. This bill directly affects surviving spouses of eligible first responders by reducing their state income tax liability.

Topics ✓ Budget & TaxesSupports Budget & TaxesCreates tax credit reducing income tax liability for spouses of fallen first responders, providing targeted tax relief aligned with middle-income support.95% confidence

Sub-Topics Income Tax Property Tax Tax Credits

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in committee · Pennsylvania · House Mar 18, 2025

HB 422: 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 422 creates a new tax deduction for Pennsylvania residents who donate human organs. It allows taxpayers to deduct up to $12,000 annually for unreimbursed expenses directly related to organ donation, including travel, lodging, lost wages, and medical costs. The deduction applies only to the year the transplantation occurred, may be claimed just once in a lifetime, and cannot reduce taxable income below zero. This provision affects organ donors who incur qualifying out-of-pocket costs while living. The change takes effect for tax years beginning after December 31, 2025.

Topics ✓ Budget & TaxesSupports Budget & TaxesCreates tax deduction for organ donation expenses, providing relief to donors by reducing taxable income per Tax Reform Code amendment.90% confidence

Sub-Topics Income Tax

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in committee · Pennsylvania · House Mar 10, 2025

HB 833: A Joint Resolution proposing an amendment to the Constitution of the Commonwealth of Pennsylvania, further providing for exemptions and special provisions.

HB 833 proposes a constitutional amendment to add a 4% tax on Pennsylvania residents with annual taxable income exceeding $1 million. This tax would apply only to income above the $1 million threshold, directly affecting high-income earners in the state. The amendment includes an annual cost-of-living adjustment for the income threshold, aligning it with federal tax bracket methodology. This is a policy change to the state constitution, not an immediate law, requiring approval through the constitutional amendment process.

Topics ✓ Budget & TaxesSupports Budget & TaxesImposes 4% tax on high earners ($1M+ income), creating new revenue stream for state fiscal management. Targets top bracket, aligns with progressive tax policy.90% confidence

Sub-Topics Income Tax

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in committee · Pennsylvania · Senate Mar 31, 2025

SB 207: 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.

SB 207 gradually reduces Pennsylvania's corporate net income tax rate over time. It lowers the tax rate from 9.99% (for 1995-2022) to 4.99% by 2031, with incremental reductions each year (e.g., 8.99% for 2023, 8.49% for 2024, 7.99% for 2025). This bill directly affects corporations operating in Pennsylvania that pay state corporate income tax. The key mechanism is a scheduled, multi-year reduction in the tax rate for corporate net income, as specified in Section 402(b) of the Tax Reform Code of 1971.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill reduces corporate tax rate from 9.99% to 4.99% by 2031, providing direct tax relief for corporations under Tax Reform Code.90% confidence

Sub-Topics Business Taxes Income Tax

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in committee · Pennsylvania · House Apr 1, 2025

HB 1092: An Act establishing the Taxpayer Dividend Program; imposing powers and duties on the State Treasurer and Department of Revenue; and providing for payment of certain taxpayer dividends.

HB 1092 establishes a program to refund a portion of Pennsylvania's state budget surplus directly to eligible taxpayers. It requires the State Treasurer and Department of Revenue to identify resident individuals who filed 2024 tax returns and paid their liabilities, then calculate payments based on the General Fund surplus (capped at the June 2024 surplus amount) and the Budget Stabilization Reserve Fund (capped at the fund balance minus 6% of 2024-2025 General Fund revenues). The bill specifies that payments must be made within 45 days of a funding appropriation, with any unused funds returned to the Budget Stabilization Reserve Fund. This program directly affects Pennsylvania residents who filed 2024 individual income tax returns and paid their tax liability.

Topics ✓ Budget & TaxesSupports Budget & TaxesProvides direct tax refunds from state surplus to eligible taxpayers, constituting tax relief per bill summary.95% confidence

Sub-Topics Income Tax State Budget

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in committee · Pennsylvania · House Jan 17, 2025

HB 207: 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 207 amends Pennsylvania's Tax Reform Code to clarify the definition of "compensation" for personal income tax purposes, specifically adding an exception for certain military and emergency-related income. The bill explicitly excludes income earned by active-duty U.S. military members (including their spouses living outside Pennsylvania) and income from active state emergency duty under Pennsylvania's emergency management laws. This change directly affects Pennsylvania taxpayers who receive such income, ensuring it is not taxed as regular compensation. The amendment becomes effective 60 days after enactment.

Topics ✓ Budget & TaxesSupports Budget & TaxesExcludes military/emergency income from PA personal income tax, providing tax relief to affected taxpayers per bill's explicit definition change.95% confidence

Sub-Topics Income Tax

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in committee · Pennsylvania · House Jan 16, 2025

HB 152: 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 152 amends Pennsylvania's Tax Reform Code to exclude housing allowances provided by churches or religious organizations to ordained, commissioned, or licensed clergy from personal income tax. This applies to individuals who conduct religious worship, perform sacerdotal duties, and administer sacraments under their church's tenets, regardless of whether the housing is on church-owned property. The change affects clergy members receiving such housing allowances, making those amounts non-taxable for income tax purposes. The exclusion takes effect for taxable years beginning after December 31, 2023.

Topics ✓ Budget & TaxesSupports Budget & TaxesExcludes clergy housing allowances from taxable income, providing tax relief under Tax Reform Code amendment90% confidence

Sub-Topics Income Tax

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in committee · Pennsylvania · House May 12, 2025

HB 813: 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 813 amends Pennsylvania's Tax Reform Code of 1971 to exempt certain student loan discharges and employer educational assistance from personal income tax. Specifically, it excludes from taxation: (1) the discharge of eligible student loans under qualified federal forgiveness programs, and (2) employer-paid educational assistance that meets federal exclusion rules under Section 127 of the Internal Revenue Code. These exemptions apply to taxable years beginning after December 31, 2025. The bill directly affects Pennsylvania taxpayers who qualify for these specific student loan forgiveness or employer education benefits under federal programs.

Topics ✓ Budget & TaxesSupports Budget & TaxesExempts student loan forgiveness and employer education benefits from income tax, providing direct tax relief to eligible individuals under the Tax Reform Code.95% confidence ✓ EducationSupports EducationExempts student loan discharges and employer education benefits from tax, reducing financial barriers to higher education access and supporting educational affordability.92% confidence

Sub-Topics Income Tax Student Financial Aid

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