SB 1314
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.
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Sign in to take action- Introduced
- Passed Senate
- Passed House
- To Governor
- Became Law
Bill overview
This bill amends Pennsylvania’s tax law, specifically the Tax Reform Code of 1971, to adjust income tax rates. It increases the tax rate for most income types to nine and seven-tenths percent, effective for taxable years beginning after December 31, 2025. Certain income types, such as those specified in section 303(a)(1), (2), and (4), are taxed at a lower rate of three and seven-tenths percent for those years. The bill also clarifies how income received by trusts is taxed.
Key provisions
- Increases the general income tax rate to nine and seven-tenths percent, effective 2026.
- Specifies a reduced income tax rate of three and seven-tenths percent for certain income types.
- Addresses the taxation of income received by trusts, aligning with Internal Revenue Code sections.
- Applies the increased rates to residents and nonresidents receiving income within Pennsylvania.
- Defines the classes of income subject to taxation as outlined in section 303.
Who is affected
- Pennsylvania residents
- Pennsylvania nonresidents receiving income within the state
- Trusts (resident and nonresident)
- Estate tax payers
Notable changes
- Changes income tax rates for both residents and nonresidents.
- Introduces a tiered tax rate system based on specific income categories.
- Clarifies the taxation of trust income, referencing relevant Internal Revenue Code sections.
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