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.

PRINTER'S NO. 1667
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 1314
Session of
2026
INTRODUCED BY SAVAL, MUTH, L. WILLIAMS, KEARNEY, HAYWOOD, COSTA
AND CAPPELLETTI, MAY 1, 2026
REFERRED TO FINANCE, MAY 1, 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.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 302 of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971, is amended to read:
Section 302. Imposition of Tax.--(a) Except as provided in
subsection (c)[, every]:
(1) 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 three and seven
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hundredths per cent. This paragraph shall not apply to taxable
years commencing after December 31, 2025.
(2) Except as provided in paragraph (3), 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 nine and seven hundredths per cent. This
paragraph shall apply to taxable years commencing after December
31, 2025.
(3) 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)
(1), (2) and (4), a tax upon each dollar of income received by
that resident during that resident's taxable year at the rate of
three and seven hundredths per cent. This paragraph shall apply
to taxable years commencing after December 31, 2025.
(b) Except as provided in subsection (c)[, every]:
(1) 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 three and seven hundredths per cent.
This paragraph shall not apply to taxable years commencing after
December 31, 2025.
(2) Except as provided in paragraph (3), 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, a tax upon each dollar of
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income received by that nonresident during that nonresident's
taxable year at the rate of nine and seven hundredths per cent.
This paragraph shall apply to taxable years commencing after
December 31, 2025.
(3) 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(a)
(1), (2) and (4), a tax upon each dollar of income received by
that nonresident during that nonresident's taxable year at the
rate of three and seven hundredths per cent. This paragraph
shall apply to taxable years commencing after December 31, 2025.
(c) The classes of income under section 303 received by a
resident trust, and the classes of income received by a
nonresident trust from sources within this Commonwealth, shall
be taxable to the grantor of the trust or another person to the
extent the grantor or other person is treated as the owner of
the trust under sections 671, 672, 673, 674, 675, 676, 677, 678
and 679 of the Internal Revenue Code of 1986 (Public Law 99-514,
26 U.S.C. § 1 et seq.), as amended, whether or not [such] the
income is distributed or distributable to the beneficiaries of
the trust or accumulated.
Section 2. This act shall take effect immediately.
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