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 and for requirement of withholding tax.

PRINTER'S NO. 3159
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2370
Session of
2026
INTRODUCED BY ROWE, STENDER, PUGH, MIHALEK, OLSOMMER, KUTZ,
MARCELL, SMITH, PICKETT, LABS, KUZMA, HAMM, COOPER,
WEAKNECHT, WATRO AND GLEIM, APRIL 9, 2026
REFERRED TO COMMITTEE ON FINANCE, APRIL 9, 2026
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 and for requirement of withholding tax.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Sections 302(a) and (b) and 316.1(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
during that resident's taxable year at the rate of:
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(1) Except as provided under paragraph (2), three and seven
hundredths per cent.
(2) For the time period beginning the first day of the first
full month after the effective date of this paragraph and ending
on the first day after the end of the sixth full month after the
effective date of this paragraph, two and ninety-nine hundredths
per cent.
(b) Except as provided in subsection (c), every nonresident
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 from sources within this
Commonwealth, a tax upon each dollar of income received by that
nonresident during that nonresident's taxable year at the rate
of:
(1) Except as provided under paragraph (2), three and seven
hundredths per cent.
(2) For the time period beginning the first day of the first
full month after the effective date of this paragraph and ending
on the first day after the end of the sixth full month after the
effective date of this paragraph, two and ninety-nine hundredths
per cent.
* * *
Section 316.1. Requirement of Withholding Tax.--(a) Every
employer maintaining an office or transacting business within
this Commonwealth and making payment of compensation (i) to a
resident individual, or (ii) to a nonresident individual
taxpayer performing services on behalf of such employer within
this Commonwealth, shall deduct and withhold from such
compensation for each payroll period a tax computed in such
manner as to result, so far as practicable, in withholding from
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the employe's compensation during each calendar year, or
portions of calendar years for periods subject to section 302(a)
(2) or (b)(2), an amount substantially equivalent to the tax
reasonably estimated to be due for such year or portion of
calendar years with respect to such compensation. The method of
determining the amount to be withheld shall be prescribed by
regulations of the department.
* * *
Section 2. This act shall take effect July 1, 2026, or
immediately, whichever is later.
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