Pennsylvania State Taxes
Quick Tax Facts
Income Tax: 3.07%
State Sales Tax: 6%
Median Property Tax: $3,527
Overview
Pennsylvania is known as the birthplace of American democracy and Philly cheesesteaks. It is also home to the sweetest place on Earth – Hershey’s chocolate! What’s not so sweet are the taxes in the state. Although its flat income tax of 3.07% is fairly modest, property taxes and sales tax are on the higher end. Additionally, local governments can levy income taxes on residents’ incomes.
Pennsylvania Income Tax
Pennsylvania has a flat income tax rate of 3.07%. Local municipalities and school districts can also levy income taxes. The state taxes eight classes of income:
- Compensation
- Interest
- Dividends
- Net profits from the operation of a business, profession, or farm
- Net gains or income from the dispositions of property
- Net gains or income from rents, royalties, patents, and copyrights
- Income derived through estates or trusts
- Gambling and lottery winnings (excluding non-cash PA Lottery prizes)
A loss in one income class cannot offset income in another. Gains and losses may not be carried backward or forward from year to year.
Pennsylvania does not have a standard deduction or a personal exemption. Individuals, however, may reduce their tax liabilities through certain credits, deductions, and exclusions.
Who Must File?
Every resident, including part-year and non-residents, must file a Pennsylvania income tax return (PA-40) if they have income generating $1 or more in tax, even if no tax is due. Non-residents are only taxed on income they receive from Pennsylvania sources and do not qualify for the credit for taxes paid to other states.
Pennsylvania Sales Tax
Pennsylvania’s state sales tax rate is 6%. By law, an additional 1% local sales tax is added to purchases in Allegheny County. Purchases made in Philadelphia have an additional 2% local sales tax added.
Pennsylvania Property Taxes
Pennsylvania has one of the highest property tax burdens in the United States. Although it’s not as high as its neighbors, New Jersey and New York, it’s still above the national average.
On average, the median property tax bill in Pennsylvania is approximately $3,527. Delaware County has the highest property tax at an average of $5,947. The lowest amount is $1,108 in Forest County.
| Highest | $5947 |
|---|---|
| Median | $3527 |
| Lowest | $1108 |
Yearly Cost Per Resident
Pennsylvania Tax Holidays
There are no sales tax holidays scheduled in Pennsylvania at this time.
Pennsylvania Tax Relief
Dealing with unpaid Pennsylvania income taxes can become more challenging the longer your balance remains unresolved. Penalties and interest may continue to add to what you owe, and the Pennsylvania Department of Revenue may pursue collection efforts to recover delinquent taxes. Whether your tax issue resulted from missed filings, financial difficulties, or outstanding business tax obligations, addressing the problem early may help prevent additional complications.
If paying your Pennsylvania tax debt in full isn’t possible, you may have options for resolving your balance. Depending on your circumstances and eligibility, you may be able to establish a payment plan, pursue an Offer in Compromise, or explore other available tax resolution options. Taking action before collections progress may also help you avoid or address enforcement measures such as tax liens, wage garnishments, and levies.
Understanding Pennsylvania’s collection process and the relief options that may be available can help you determine an appropriate path forward. Taking steps to resolve your outstanding balance can help you work toward getting your Pennsylvania tax account back on track.
Common Pennsylvania State Tax Problems
Back Taxes
If you owe unpaid Pennsylvania taxes, addressing your balance early may help you avoid additional penalties and collection actions.
Unfiled Tax Returns
Filing past-due Pennsylvania tax returns is often the first step toward resolving your state tax issues.
Tax Notices
Notices from the PA Department of Revenue shouldn’t be ignored, as they often require prompt action to prevent further collections.
Liens & Levies
Unresolved tax debt may lead to liens against your property or levies on your assets as the state works to collect what is owed.
Garnishment
Pennsylvania may garnish your wages to collect unpaid taxes, reducing the amount of each paycheck you receive.
Tax Penalties
Unpaid taxes can continue to accrue penalties and interest until your balance is resolved.
How Pennsylvania Collects Tax Debt
If you have unpaid Pennsylvania income taxes, the state will send a Notice of Assessment. It explains the amount due, as well as penalties and interest fees. Failure to pay or respond to this notice within 90 days will result in the state sending a collection (dunning) notice. The Delinquent Tax Call Center will also attempt to contact you by telephone.
If the Call Center is unsuccessful in reaching you or getting you to pay your tax debt, it will move forward with the enforcement tools at its disposal, which may include:
- Wage garnishment
- Tax liens
- Bank levies
- Asset seizure
- Tax refund offset
- Case sent to a third-party collection company
Notice of Assessment sent to taxpayer
Collection or Dunning Notice issued
Collection actions commence
Pennsylvania State Tax Relief Options
Pennsylvania offers several tax relief options, including:
- Payment Plans – If you can’t pay in full, you can request a payment plan online, by email, or by phone.
- Voluntary Disclosure Program – The Voluntary Disclosure Program allows eligible individuals to voluntarily come forward to resolve their tax issues and have all penalties waived.
- Offer in Compromise – If there is a Doubt as to Liability or Collectability, a taxpayer may attempt to settle their tax debt for less through an Offer in Compromise.
If you’re experiencing financial hardship and can’t pay your Pennsylvania income tax bill, contact the Department of Revenue as soon as possible to discuss your options.
When to Seek Tax Relief Help
If you’re experiencing any of the following, it may be time to explore your tax relief options:
You’re Receiving Collection Notices
Ignoring Pennsylvania tax notices can lead to more serious collection actions, so it’s often best to address the issue early.
You Can’t Afford to Pay Your Taxes
If paying your Pennsylvania state tax bill in full isn’t realistic, there may be payment or resolution options available.
Collection Actions Have Started
If you’re facing wage garnishments, bank levies, or tax liens, professional guidance may help you understand your options.
The sooner you address your tax debt, the more options you may have available to resolve your balance and minimize additional collection actions.
Pennsylvania Tax Relief FAQs
Pennsylvania Tax Resources
If you need assistance preparing your Pennsylvania state taxes, you can speak with a tax professional from Tax Defense Network by calling 855-476-6920.
You can also visit the Pennsylvania Department of Revenue website for additional resources.
- Find a Form
- Request an Extension
- Make a Payment
- Taxpayer Assistance: 717-787-8201
