An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in personal income tax, further providing for imposition of tax, for when withholding not required, for returns and liability and for return of Pennsylvania S corporation.

PRINTER'S NO. 2144
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1742
Session of
2025
INTRODUCED BY BOROWICZ, HAMM, KUTZ, BERNSTINE, ZIMMERMAN, ROWE
AND BANTA, JULY 15, 2025
REFERRED TO COMMITTEE ON FINANCE, JULY 16, 2025
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," in personal income tax, further providing for
imposition of tax, for when withholding not required, for
returns and liability and for return of Pennsylvania S
corporation.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Sections 302(a), 323, 330(a) and 330.1(a) of the
act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code
of 1971, are amended to read:
Section 302. Imposition of Tax.--(a) Except as provided in
subsection (c), every resident individual, estate or trust shall
be subject to, and shall pay for the privilege of receiving each
of the classes of income hereinafter enumerated in section 303,
a tax upon each dollar of income received by that resident
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during that resident's taxable year at the rate of three and
seven hundredths per cent[.] until December 31, 2025. For
taxable years beginning on or after January 1, 2026, no tax may
be imposed under this article.
* * *
Section 323. When Withholding Not Required.--Notwithstanding
any provision of this code to the contrary, an employer on and
after January 1, [1975] 2026, shall not be required to withhold
any tax upon payment of wages to an employe. [if such employe
can certify:
(1) that he incurred no personal income tax liability for
the preceding tax year; and
(2) that he anticipates no liability for personal income tax
for the current taxable year.]
Section 330. Returns and Liability.--(a) [On] (1) Subject
to clause (2), on or before the date when the taxpayer's Federal
income tax return is due or would be due if the taxpayer were
required to file a Federal income tax return, under the Internal
Revenue Code of 1954, a tax return under this article shall be
made and filed by or for every taxpayer having income for the
taxable year.
(2) This section shall not apply to taxable years beginning
on or after December 31, 2025.
* * *
Section 330.1. Return of Pennsylvania S Corporation.--(a)
[Every] (1) Subject to clause (2), every Pennsylvania S
corporation shall make a return for each taxable year, stating
specifically all items of gross income and deductions, the names
and addresses of all persons owning stock in the corporation at
any time during the taxable year, the number of shares of stock
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owned by each shareholder at all times during the taxable year,
the amount of money and other property distributed by the
corporation during the taxable year to each shareholder, the
date of each distribution, each shareholder's pro rata share of
each item of the corporation for the taxable year and such other
information as the department may require.
(2) This section shall not apply to taxable years beginning
on or after December 31, 2025.
* * *
Section 2. All acts and parts of acts are repealed insofar
as they are inconsistent with this act.
Section 3. All regulations are abrogated to the extent of
any inconsistency with this act.
Section 4. This act shall take effect immediately.
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