|
Pennsylvania has the lowest maximum rate of any state that imposes a personal income tax. The current tax rate is 3.07% and Pennsylvania taxes the following eight classes of income: Compensation; Net
profits from the operation of a business,
profession, or farm; Net gains or income less net losses from dispositions of property; Net gains or income from rents, royalties, patents, and copyrights; Dividends; Interest; Gambling and lottery winnings (except Pennsylvania Lottery winnings won on or after July 21, 1983); Net gains or income derived through estates or trusts
A loss in one class of income cannot be offset against income in another class, nor may gains or losses be carried backward or forward from year to year.
For more information, call: Department of Revenue - Personal Income Tax--717-787-8210
CREDITS AND EXEMPTIONS
Corporations defined as S Corporations for federal tax purposes may elect to be treated as a partnership for Pennsylvania tax purposes and pay the 3.07% Personal Income Tax rather than the 9.99% Corporate Net Income Tax.
Limited Liability Companies which qualify as
partnerships for federal tax purposes are treated as partnerships for Pennsylvania tax purposes and pay the state 3.07% Personal Income Tax rather than the 9.99% Corporate Net Income Tax.
Payments from a cafeteria-style benefit plan are exempt from the Personal Income Tax.
Some unreimbursed business expenses (union dues, work clothes and uniforms, and small tools and supplies) are deducted from taxable income for personal income tax purposes.
Job Creation Tax Credits of $1,000 may be applied against the Personal Income Tax. (Small business set-aside - 25% of the funding for this program is set aside for business with 25 or fewer employees.) For more information, contact the Grants Office in the Department of Community and Economic Development at 717-787-7120.
Research and Development Tax Credits may also be applied against the Personal Income Tax.
For more information, call:
Department of Revenue - Corporation Taxes--717-783-6035
|
