PA HB1514

Creates a 100% refundable tax credit against Pennsylvania personal income tax for all taxes paid on tipped wages, effectively eliminating state income tax on tips

Defines "tipped wages" as voluntary payments made by customers to employees that are not set by the employer or subject to negotiation

Requires taxpayers to calculate tipped wage amounts using employer-provided documentation under 34 Pa. Code § 231.36 and submit this paperwork as proof when claiming the credit

Reduces the credit amount by any tax forgiveness benefits already received under section 304, and caps the credit at the proportion of tax otherwise due

Applies to taxable years beginning after December 31, 2025, with the Department of Revenue required to incorporate the credit into the standard PA-40 tax form