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PA HB1610
Bill
Status
6/25/2025
Primary Sponsor
Elizabeth Fiedler
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AI Summary
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Requires corporations that are members of a unitary business to file combined annual tax reports beginning January 1, 2026, using water's-edge basis reporting that includes income from U.S. entities and controlled foreign corporations with Subpart F income
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Accelerates corporate net income tax rate reductions: 7.24% for 2026, 6.49% for 2027, 5.74% for 2028, and 4.99% for 2029 and thereafter (previously scheduled to reach 4.99% by 2031)
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Creates a Working Pennsylvanians Tax Credit equal to 30% of the federal Earned Income Tax Credit, fully refundable, for taxable years beginning after December 31, 2024
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Exempts overtime pay from Pennsylvania personal income tax by allowing taxpayers to deduct overtime wages when calculating taxable income, and excludes tips and gratuities from the definition of compensation subject to tax
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Allows retroactive tax credits for income taxes paid to other states on pass-through entity income, applying to taxable years beginning after December 31, 2021
Legislative Description
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.
Last Action
Referred to Finance
6/25/2025