Overview of Pennsylvania Taxes
Pennsylvania has a flat income tax rate of 3.07%, the lowest of all the states with a flat tax. The statewide sales tax rate is 6%, though two counties charge an additional sales tax above this rate.
Number of State Personal Exemptions
Your Income Taxes Breakdown
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|Total Income Taxes|
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* These are the taxes owed for the 2021 - 2022 filing season.
Your 2021 Federal Income Tax Comparison
- Your marginal federal income tax rate
- Your effective federal income tax rate
- Your federal income taxes
Total Estimated 2021 Tax Burden
Total Estimated Tax Burden $
Percent of income to taxes = %
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Our income tax calculator calculates your federal, state and local taxes based on several key inputs: your household income, location, filing status and number of personal exemptions. Also, we separately calculate the federal income taxes you will owe in the 2020 - 2021 filing season based on the Trump Tax Plan.
How Income Taxes Are Calculated
- First, we calculate your adjusted gross income (AGI) by taking your total household income and reducing it by certain items such as contributions to your 401(k).
- Next, from AGI we subtract exemptions and deductions (either itemized or standard) to get your taxable income. Exemptions can be claimed for each taxpayer as well as dependents such as one’s spouse or children.
- Based on your filing status, your taxable income is then applied to the the tax brackets to calculate your federal income taxes owed for the year.
- Your location will determine whether you owe local and / or state taxes.
- Last Updated: January 1, 2021...read more
When Do We Update? - We regularly check for any updates to the latest tax rates and regulations.
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Taxes in Pennsylvania
Pennsylvania State Tax Quick Facts
- State Income tax: 3.07% flat rate
- Local Income tax: 0% - 3.8398%
- Sales tax: 6% - 8%
- Property tax: 1.50% average effective rate
- Gas tax: None
Pennsylvania receives tax revenue from two primary sources: a statewide income tax of 3.07% and a statewide sales tax of 6%. In addition to these two state taxes, Pennsylvania residents will also face local taxes on real estate, sales and income.
Many cities in Pennsylvania collect a Local Earned Income Tax which is typically 1%, but can be as high as almost 3.9%. In smaller municipalities, this tax is capped by state law at 2%. However, in many larger cities, including Pittsburgh and Philadelphia, you'll encounter higher rates.
A financial advisor in Pennsylvania can help you understand how taxes fit into your overall financial goals. Financial advisors can also help with investing and financial planning - including retirement, homeownership, insurance and more - to make sure you are preparing for the future.
Pennsylvania Income Tax
Pennsylvania utilizes a “flat tax” system. This means that every taxpayer in the state, regardless of their level of income, pays the same percentage of their taxable income in state income taxes. That rate is 3.07%.
That does not mean that taxpayers in Pennsylvania have lower tax bills, however. For starters, unlike many other states that collect an income tax, Pennsylvania has no standard deduction or exemption. Additionally, itemized deductions (which reduce your taxable income) are limited to just four categories: medical savings account contributions, health savings account contributions, 529 college savings plan contributions and IRC Section 529A Pennsylvania ABLE Savings Account Program contributions.
The net effect is that while Pennsylvania’s actual tax rate is lower than in many other states, its effective tax rate (the actual amount paid as a percentage of income) may be higher for many taxpayers.
Local Earned Income Tax
Municipalities in Pennsylvania can collect income taxes of their own, called a “Local Earned Income Tax.” While small cities collect a tax of no more than 2% (in many places, the rate is just 1%), larger cities typically collect more. Below are the local earned income tax rates for Pennsylvania’s largest cities.
Pennsylvania Municipal Income Taxes
Pennsylvania Sales Tax
The statewide base sales tax rate in Pennsylvania is 6%. This is the rate charged in most places around the state, with two exceptions. The first is Allegheny County (which includes the city of Pittsburgh), where there is an additional 1% sales tax. The other exception is in Philadelphia, where there is a local surcharge totaling 2%, bringing the total sales tax rate there to 8%.
Numerous items are excluded from sales taxes in Pennsylvania, including clothing and footwear, textbooks, most groceries, internet service, toilet paper, fitness club fees, most medicine and residential fuels including firewood, natural gas and electricity.
Pennsylvania Alcohol Tax
Alcoholic beverages are subject to additional excise taxes in Pennsylvania, although that tax is often included in the price. All liquor sold by the Pennsylvania Liquor Control Board (LCB) is taxed at 18%. The tax is eight cents per gallon for beer.
Pennsylvania Property Tax
The average effective property tax rate in Pennsylvania is 1.50%, but that varies greatly depending on where you live. In Philadelphia County, for example, the average rate is 0.99%. In Allegheny County, the rate is 2.01%. These rates are based on the median annual tax payment as a percentage of median home value.
Seniors, adults with disabilities and widows or widowers over age 50 may also be eligible for a property tax rebate of up to $975, depending on the city of residence and income level.
If you’re considering buying a property in Pennsylvania or are looking into refinancing a current home loan, our Pennsylvania mortgage rates guide lays out important information you’ll need to get started on the process of getting a mortgage.
Pennsylvania Inheritance Tax
Inheritances given to state residents is taxed depending on the relation of the deceased to the person receiving the inheritance. There is no tax on transfers to a surviving spouse or to a parent from a child aged 21 or younger. The tax is 4.5% for direct descendants (children, grandchildren, etc.), 12% for siblings and 15% for other heirs.
Pennsylvania Gas Tax
Pennsylvania does not levy an excise tax on gasoline or diesel purchases.
Pennsylvania Small Games of Chance Tax
Games sold in taverns (like computerized blackjack) are subject to a state tax of 60% of net revenue earned by the game. The host municipality will also charge a tax of 5% of net revenue.
- Pennsylvania is named after William Penn, to whom the state land was given as payment for a debt owed him by King Charles II of England.
- The name Philadelphia comes from the Greek words “philos,” which means love, and “adelphos,” which means brothers.