Pennsylvania state taxes at a glance
| Individual income tax | Flat-rate income tax |
|---|---|
| Rate structure | A flat personal income tax rate (3.07% as of our latest review) applied to defined “classes” of income. No standard or itemized deduction like the federal system. |
| Tax agency | Pennsylvania Department of Revenue |
| Main individual return | Form PA-40 |
| Local income taxes | Most localities levy an Earned Income Tax (EIT) on wages and net profits, and some levy a Local Services Tax. Philadelphia has its own wage tax. |
| Sales tax | A state rate with a few local add-ons (e.g., Philadelphia and Allegheny County). Many groceries and clothing items are exempt; check the Department. |
| Property tax | Locally administered by counties, municipalities and school districts. A rebate program helps eligible seniors and others. |
| Retirement & Social Security | Social Security benefits are not taxed, and qualifying retirement distributions after reaching the plan’s retirement age are generally not taxed by Pennsylvania. |
Verify current-year figures: state rates, brackets, credits and filing rules change. Treat this page as a starting orientation and confirm details on the Pennsylvania Department of Revenue website.
How Pennsylvania income tax works
Pennsylvania’s constitution requires uniform taxation, which is why the personal income tax is a single flat rate rather than brackets. Unlike most states, Pennsylvania does not start from federal taxable income. Instead it taxes eight classes of income — such as compensation, interest, dividends, net business profits and gambling or lottery winnings — and treats gains and losses within each class separately. In practice, that means losses in one class generally cannot offset gains in another, and you cannot take a standard or itemized deduction.
Because many federal deductions and adjustments do not apply, a Pennsylvania return can show more taxable income than your federal return in some situations — for example, employee contributions to certain plans may be treated differently from the federal rules. Read the PA-40 instructions rather than assuming your federal AGI carries over.
The flat rate is only part of the story. Most Pennsylvania localities charge an Earned Income Tax collected by local tax collectors, and some charge a flat Local Services Tax. Philadelphia residents pay a city wage tax that is higher than most other localities, and that rate depends on residency. Your employer typically withholds local tax by work and home address, so make sure your address is current with payroll.
Filing your Pennsylvania return and free options
Most residents file Form PA-40 by April 15. The Department of Revenue’s myPATH portal handles e-filing, payments and refund status, and Pennsylvania has explored its own free-filing options in recent years. Because offerings and eligibility change, check the Department’s current “free file” page and the free federal options; some federal free-file partners include a Pennsylvania return at no charge.
Pennsylvania also has a Tax Forgiveness credit for low-income filers and a Property Tax/Rent Rebate Program for eligible older adults, widows and widowers, and people with disabilities. Eligibility rules and income limits apply, so confirm them on the Department’s site. You file local EIT returns with your local collector if your employer did not withhold correctly.
For the federal side, see our guides to free federal filing options and the complete guide to filing taxes.
Things Pennsylvania residents often ask about
- Local taxes: look up your municipality and school district’s EIT rate through the state’s lookup tool.
- Working in Philadelphia: the wage tax can apply to nonresidents who work in the city at a different rate than residents.
- Retirees: Social Security and many qualifying retirement distributions are not taxed by the state; check class rules for other income.
- Refund status: use myPATH or the “Where’s My Refund?” tool on the state site; see state refund status.
Official Pennsylvania links
- PA Department of Revenue: personal income tax
- myPATH (online filing and payments)
- PA Department of Revenue: Do I need to file? (agency site)
- Federation of Tax Administrators: State tax agencies
Frequently asked questions
What is Pennsylvania’s state income tax rate?
A flat rate (3.07% as of our latest review). Local earned income taxes are additional. Verify on the Department of Revenue site.
Does Pennsylvania tax Social Security?
No. Pennsylvania does not tax Social Security benefits.
Why does my paycheck show a local tax?
Local earned income tax and local services tax are collected by municipalities and school districts and are usually withheld by employers.
General information only — not tax, legal or financial advice. Tax figures change every year; verify the current numbers at IRS.gov or with a qualified professional. Read the full disclaimer.