What Is the Pennsylvania Income Tax Rate?
Pennsylvania tax law determines who is an individual, what is a corporation and what is income. Pennsylvania taxes individual income and corporate income at different standard rates.
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Tax Rate
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The Pennsylvania tax rate on individual income is 3.07 percent. The Pennsylvania corporate income is taxed 9.99 percent.
Legal Status
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Pennsylvania considers the following to be individuals: resident and non-resident individuals, estates, trusts, partnerships, S corporations, business trusts and limited liability companies not federally taxed as corporations.
Pennsylvania taxes the income of domestic corporations (incorporated in Pennsylvania) and foreign corporations (incorporated outside of Pennsylvania) that do business in Pennsylvania or that have capital or property in Pennsylvania.
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Income Defined
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Wages, interest and dividends are the most common income sources for an individual. Other categories of individual income include: income from estates and trusts, gambling winnings (other than Pennsylvania lottery winnings), business revenue, profession or farm profits, gains on the disposition of property or from rents, royalties, patents and copyrights. Deductions, credits and exclusions are allowed for some items. Preference is given to items related to health, school and income level.
The amount of Pennsylvania corporate income is the amount reported on the federal tax returns.
Exemptions
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The following entities do not need to file corporate income taxes: not-for-profit organizations, homeowners' associations, membership organizations, agricultural cooperatives and business trusts.
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References
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