Pennsylvania State Income Tax

Pennsylvania has one of the country’s most complicated state and local tax codes. Pennsylvania State Income Tax is 3.07%, and municipalities can add up to 2% in local earned income taxes. There are also sales taxes, property taxes, and a few other special taxes. Some items are exempt from tax, including diapers and feminine hygiene products. Other items are taxable, such as alcohol and some clothing.

Residents and nonresidents are required to file a PA tax return even if they do not owe any taxes. Pennsylvania State Income Tax is levied on taxable gross income, which includes wages, business profits, net gain or loss from the sale of assets and rent income. If you are behind on your Pennsylvania state income taxes, you can apply for a deferred payment plan through the Department of Revenue. The DOR typically requires that you file all your taxes up to this point and that you make a down payment of 20 percent of what you owe. The DOR will then work with you to negotiate different terms. This process can be complex, but a financial advisor can help you understand your options and meet your goals.

Pennsylvania State Income Tax Exemption

Individuals can reduce their tax liability by claiming deductions and credits. They can deduct expenses that are ordinary, necessary, reasonable and related to their employment or occupation. Taxpayers can also use their health savings account contributions to reduce their taxable income. In addition, they can claim a credit for state and local taxes paid in other states. They can also use their state-only e-file system to submit their returns online.

Certain items, including food, clothing, and some feminine hygiene products, are exempt from the state sales tax. Some services, such as funeral and cremation services (but caskets are taxed), are also exempt.

In Pennsylvania, you can also save on gas taxes by using a credit card. Pennsylvania doesn’t tax Social Security or railroad retirement benefits unlike many states. However, it does tax contributions to 401(k)s and other retirement accounts.

Pennsylvania State Income Tax Due Dates

Pennsylvania has different due dates depending on whether you file electronically or by mail, and whether you have a federal filing extension

The due date you need to remember is October 15th if you’re filing electronically and want to take advantage of the extension offered by Pennsylvania for taxpayers who file a federal extension (and have no tax due in Pennsylvania).

If you don’t have a federal extension or owe tax in Pennsylvania, you need to file by the earlier deadline of April 15th.

These deadlines apply to tax year 2023 tax returns that are due in 2024.