Pennsylvania State Tax Rate Guide – Pennsylvania’s tax system features a flat personal income tax, a competitive corporate rate that continues to decline, and a straightforward sales tax with limited local add-ons. Whether you’re a resident, business owner, retiree, or relocating to the state, this comprehensive Pennsylvania state tax rate guide breaks down current 2026 rates, who pays what, key exemptions, and filing deadlines. All information comes directly from the Pennsylvania Department of Revenue and trusted sources like the Tax Foundation.
Pennsylvania Personal Income Tax Rates
Pennsylvania imposes a flat 3.07% personal income tax (PIT) on taxable income. This rate has remained unchanged since 2004 and applies equally to all income levels—no brackets or graduated rates.
The tax covers eight classes of income for residents, nonresidents, estates, trusts, partnerships, S corporations, and certain LLCs:
- Compensation (wages, salaries)
- Interest
- Dividends
- Net business or farm profits
- Net gains from property sales
- Rents, royalties, patents, and copyrights
- Income from estates or trusts
- Pennsylvania Lottery winnings (cash prizes only)
Key notes:
- Losses in one class cannot offset gains in another.
- No standard deduction or personal exemption.
- Allowable deductions include unreimbursed employee expenses, contributions to HSAs, MSAs, and 529 plans.
- Senior citizens (age 60+) may exclude certain retirement income and pension income.
Local earned income taxes (up to 3.74% in Philadelphia) may also apply in some municipalities.
Pennsylvania Sales and Use Tax Rates
Pennsylvania’s statewide sales and use tax rate is 6%. This applies to most retail sales of tangible personal property, digital goods, and certain services.
Local add-ons:
- Allegheny County (Pittsburgh area): +1% → total 7%
- Philadelphia: +2% → total 8%
Combined state + local rates range from 6% to 8%, with an average around 6.34%.
Common exemptions include:
- Most unprepared food and groceries
- Clothing (except certain accessories)
- Prescription drugs and many over-the-counter medicines
- Textbooks and certain educational materials
- Residential heating fuels
Hotel occupancy tax follows the same base rate (6% + local) on short-term stays under 30 days.
Pennsylvania Corporate Income Tax Rates
Pennsylvania’s corporate net income tax (CNIT) continues its multi-year phasedown. For tax years beginning January 1, 2026 through December 31, 2026, the flat rate is 7.49%.
Recent schedule:
- 2025: 7.99%
- 2026: 7.49%
- Further reductions planned annually until reaching 4.99% in 2031.
This makes Pennsylvania increasingly attractive for businesses compared to higher-rate states.
Property Taxes in Pennsylvania
Pennsylvania has no statewide property tax. Instead, county, municipal, and school district taxes fund local services. The statewide average effective property tax rate is approximately 1.26%–1.30% of assessed home value (ranking around 12th highest nationally).
- Median annual property tax bill: Roughly $3,000–$3,500 depending on home value.
- Rates vary significantly by county. Higher in suburban Philadelphia areas (Delaware, Chester, Bucks); lower in rural counties.
- Property is assessed at 100% of market value in most counties.
Homeowners should check their county assessment office for exact millage rates, as they can change annually.
Pennsylvania Inheritance Tax Rates
Pennsylvania levies an inheritance tax (not a traditional estate tax) on transfers of property at death. Rates depend on the beneficiary’s relationship to the decedent:
- 0%: Surviving spouse or parent receiving from a child under age 21
- 4.5%: Direct descendants (children, grandchildren) and lineal heirs
- 12%: Siblings
- 15%: All other heirs (with exemptions for charities, government entities, etc.)
There is no federal-style estate tax at the state level.
Other Notable Pennsylvania Taxes
- Realty Transfer Tax: 1% state rate on the value of real estate transferred (plus any local add-ons in certain counties).
- Cigarette Tax: $2.60 per pack of 20.
- Fuel Taxes: Vary by type (gasoline, diesel, etc.)—check current motor fuel rates for 2026.
- Other business taxes: Bank shares tax, gross receipts taxes on utilities, etc.
Pennsylvania Tax Filing Deadlines for 2026
2025 Personal Income Tax Returns (PA-40) are due April 15, 2026.
- File electronically via the free myPATH portal for fastest refunds.
- Extensions: Automatic 6-month extension to October 15, 2026 (taxes still due April 15).
- Estimated tax payments (if required): Quarterly due dates—April 15, June 15, September 15, January 15.
- Corporations and partnerships have separate schedules.
Tax Credits, Deductions, and Relief Programs
Pennsylvania offers several relief options:
- Tax Forgiveness Program for low-income families and individuals.
- Credit for taxes paid to other states (residents only).
- Child and Dependent Care Credit, Working Pennsylvanians Tax Credit, and others.
- Senior citizens and veterans may qualify for additional property tax relief or income exclusions.
Always review the latest PA-40 instructions for eligibility.
Recent Changes and 2026 Outlook
The biggest 2026 change is the corporate net income tax reduction to 7.49%. Personal income and sales tax rates remain stable. No major new taxes are scheduled, though local property tax millage rates adjust annually based on budgets.
Pennsylvania’s flat 3.07% PIT and declining corporate rate position the state favorably for individuals and businesses in 2026.
Pennsylvania Taxpayer Resources and Next Steps
- Official source: Pennsylvania Department of Revenue
- Free filing: myPATH portal
- Tax forms and instructions: Search “PA-40” or corporate forms on revenue.pa.gov
- Local tax lookup: Your county assessment office or municipality website
For personalized advice, consult a tax professional or use the Department of Revenue’s customer service line. Rates can change, so always verify the latest information directly from official sources before filing.
This Pennsylvania state tax rate guide is current as of April 2026. Bookmark it and check back for updates as new forms and rates are released. Filing accurately and on time helps you avoid penalties and maximize any available credits or refunds.