What is Pennsylvania Income Tax? Rates & Tax Brackets

Updated for tax year 2025.

If you live or work in Pennsylvania, you’ll likely need to file a Pennsylvania state income tax return along with your federal return. Pennsylvania uses a flat income tax system, so the same rate applies to your taxable income regardless of filing status.

This guide explains Pennsylvania’s 2025 income tax rate, standard deduction rules, available exemptions, deductions, and credits, and the updates for the current tax year. When you’re ready to file, TaxAct® automatically applies Pennsylvania’s tax rules to help you accurately prepare your Pennsylvania return alongside your federal return.

What is the Pennsylvania state income tax?

Pennsylvania state income tax is a tax on income earned by individuals. It is collected by the Pennsylvania Department of Revenue and helps fund state services.

Pennsylvania taxes individual income on a flat-rate basis rather than using progressive brackets. For tax year 2025, the Pennsylvania individual income tax rate is 3.07%, unchanged since 2004.

Pennsylvania taxes eight classes of income under its own rules rather than starting from federal taxable income:

Compensation

Interest

Dividends

Net profits from the operation of a business, profession, or farm

Net gains or income from selling property

Rental, royalty, patent, and copyright income

Income from estates or trusts

Gambling and lottery winnings

Pennsylvania income tax rates and tax brackets

Pennsylvania imposes one of the lowest flat income tax rates among states with a broad personal income tax. The flat income tax rate for 2025 is 3.07% and applies to all filers regardless of income level or filing status:

Filer TypeTax RateSingle3.07%Married Filing Separately3.07%Married Filing Jointly3.07%Head of Household3.07%

If you need more information on how federal tax brackets work, you can use our tax bracket calculator for federal taxes.

Pennsylvania standard deduction

Pennsylvania does not offer a standard deduction or personal exemption for dependents on your PA-40 return. The state allows only limited deductions against income — including contributions to certain savings accounts — along with specific credits and exclusions (see next section)

Pennsylvania exemptions, deductions, and credits

Pennsylvania offers several deductions and credits that may reduce what you owe. Common items include:

Health Savings Account contributions

Medical Savings Account contributions

IRC Section 529 tuition account program contributions — contributions to a Pennsylvania 529 College and Career Savings Program or other qualifying IRC Section 529 plan may be deductible on your Pennsylvania return.

Tax Forgiveness — depending on income and family size, you may qualify for partial or full forgiveness of Pennsylvania income tax by filing PA Schedule SP with your Pennsylvania return.

Working Pennsylvanians Tax Credit (WPTC) — for tax year 2025, qualifying taxpayers who receive the federal earned income tax credit may claim a refundable Pennsylvania credit equal to 10% of the federal credit, up to $805.

Credit for income tax paid to another state — Pennsylvania residents who pay income tax to another state on income also taxed by Pennsylvania may qualify for a credit on their PA-40.

For a full list of Pennsylvania income tax deductions and credits, see the Pennsylvania Department of Revenue.

Pennsylvania local income tax

In addition to Pennsylvania’s 3.07% state income tax, you may also owe a local Earned Income Tax (EIT), based on where you live or work. Rates vary by municipality and school district. In most cases, your employer will withhold whichever rate is higher: your resident EIT rate or the nonresident rate for the area where you work. However, Philadelphia follows different rules because it charges its own wage tax instead of a local EIT.

You can look up your PSD code, EIT rate, and local tax collector using the Pennsylvania Department of Community and Economic Development’s address search tool.

Pennsylvania tax changes for 2025

Pennsylvania created the new Working Pennsylvanians Tax Credit (WPTC) for tax year 2025. This refundable credit is worth 10% of your federal earned income tax credit, up to $805.

The estimated payment income threshold for tax year 2025 increased to $11,000 (up from $9,500 for 2024) for Pennsylvania taxpayers with taxable income not subject to PA withholding.

FAQs

Does Pennsylvania have a state income tax?

Yes, Pennsylvania has a state income tax. The state charges a flat tax rate.

What is the Pennsylvania income tax rate?

Pennsylvania’s individual income tax rate is 3.07% for tax year 2025. Because Pennsylvania uses a flat tax, the same rate applies regardless of your income level or filing status.

What are the Pennsylvania income tax brackets for 2025?

Pennsylvania does not have income tax brackets and instead uses a flat rate of 3.07% for all filers. See the Pennsylvania income tax rates table above for filing-status details.

How does Pennsylvania state income tax work?

Pennsylvania uses a flat 3.07% income tax rate, which means the same rate applies no matter how much taxable income you earn. The state taxes eight types of income, including wages, interest, dividends, business profits, and gains from selling property.

You’ll report your Pennsylvania income on Form PA-40, subtract any eligible deductions, and apply available tax credits. Credits such as Tax Forgiveness or the Working Pennsylvanians Tax Credit may help lower your tax bill or increase your refund.

Do I have to file a Pennsylvania state tax return?

You may need to file a Pennsylvania state tax return if you’re a full-year resident, part-year resident, or nonresident who earned income from Pennsylvania sources. Whether you need to file depends on the type and amount of Pennsylvania taxable income you received. Because filing requirements can vary, check the Commonwealth of Pennsylvania’s guidance for rules that apply to your situation.

What is the Pennsylvania standard deduction for 2025?

Pennsylvania does not offer a standard deduction or personal exemptions for dependents for tax year 2025. However, certain deductions and tax credits may still help reduce your Pennsylvania tax bill.

How much is Pennsylvania state income tax?

The amount of Pennsylvania state income tax you owe depends on your taxable income, eligible deductions, and available credits. Pennsylvania applies a flat 3.07% tax rate to taxable income across its eight income categories.

Why is my Pennsylvania tax return different from my federal return?

Pennsylvania does not use federal taxable income as a starting point for personal income tax. Instead, Pennsylvania taxes eight classes of income under its own rules, so federal tax law changes — including personal deductions in the Working Families Tax Cut Act (One Big Beautiful Bill or OBBB) — do not automatically apply to your Pennsylvania return unless Pennsylvania enacts specific legislation. As a result, your Pennsylvania taxable income, deductions, or credits may differ from your federal return.

The good news is that our tax software automatically applies Pennsylvania’s current tax rules when preparing your state return, so you don’t have to calculate these differences yourself.

For more information on Pennsylvania personal income tax, visit the Pennsylvania Department of Revenue. If you’d like to learn more about recent federal tax law changes, see our OBBB tax changes guide.

The bottom line

Pennsylvania has a flat 3.07% income tax rate for tax year 2025 and does not offer a standard deduction or personal exemption. However, certain deductions and credits may help lower your tax bill or increase your refund. You may also owe a local earned income tax based on where you live or work.

When you’re ready to file, TaxAct can help you prepare your federal and Pennsylvania returns in one place so you can file with confidence.

Already filed your taxes and waiting for your refund? Learn more about where your Pennsylvania state tax refund is.

This article is for informational purposes only and not legal or financial advice.

All TaxAct offers, products and services are subject to applicable terms and conditions.

The OBBB is now also being referred to by lawmakers as the Working Families Tax Cut Act. You may see one or both names used here, but they refer to the same set of tax changes.

Citations

Pennsylvania Department of Revenue. “Personal Income Tax.” Accessed 27 July 2026.Pennsylvania Department of Revenue. “Tax Forgiveness.” Accessed 27 July 2026.Pennsylvania Department of Revenue. “Working Pennsylvanians Tax Credit.” Accessed 27 July 2026.Pennsylvania Department of Community and Economic Development. “Local Income Tax Information.” Accessed 27 July 2026.TaxAct. “Working Families Tax Cuts Act: 2025 Tax Reform Explained.” TaxAct Blog.TaxAct. “Where Is My Pennsylvania State Tax Refund?” TaxAct Blog.

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