An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, providing for National Guard service tax credit.

PRINTER'S NO. 877
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 821
Session of
2025
INTRODUCED BY BROOKS, CULVER, COSTA, SANTARSIERO, MILLER AND
KANE, JUNE 3, 2025
REFERRED TO FINANCE, JUNE 3, 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," providing for National Guard service tax credit.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
the Tax Reform Code of 1971, is amended by adding an article to
read:
ARTICLE XVIII-I
NATIONAL GUARD SERVICE TAX CREDIT
Section 1801-I. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Department." The Department of Revenue of the Commonwealth.
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"Qualified tax liability." The liability for taxes imposed
under Article III for the taxable year beginning after December
31, 2026, and each taxable year thereafter. The term does not
include amounts withheld or required to be withheld from
employees under Article III.
"Tax credit." The tax credit authorized under this article.
"Taxpayer." An individual subject to payment of taxes under
Article III who is a member of the Pennsylvania National Guard.
Section 1802-I. Eligibility.
(a) Application to department.--A taxpayer may claim a tax
credit against the qualified tax liability of the taxpayer by
submitting an application for the tax credit in a manner
required by the department. The application shall contain the
following information:
(1) The name and tax identification number of the
taxpayer.
(2) Documentation that the taxpayer meets the
eligibility criteria specified in section 1803-I.
(3) Any other information that the department deems
appropriate.
(b) Procedure.--The application shall be attached to the
applicant's annual tax return required to be filed under Article
III.
Section 1803-I. Taxpayer eligibility.
(a) Criteria.--A taxpayer who is an active member of the
Pennsylvania National Guard shall be eligible for a tax credit
if the taxpayer meets the following criteria:
(1) Is a resident of this Commonwealth.
(2) Has at least two full years of service in the
Pennsylvania National Guard by December 31 of the taxable
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year. For purposes of this paragraph, two full years of
service means two full calendar years in which the taxpayer
has met all obligations required of the taxpayer as a result
of military service in the Pennsylvania National Guard,
including any obligations not met but excused by the
taxpayer's chain of command.
(3) Is an active member of the Pennsylvania National
Guard on the date on which the taxpayer files the tax return.
(b) Maximum credit.--A taxpayer who qualifies under
subsection (a) may claim a tax credit of $500.
Section 1804-I. Carryover and carryback prohibited.
A taxpayer may not carry over, carry back, obtain a refund
of, sell or assign an unused tax credit under this article.
Section 1805-I. Self certification.
The making or filing by a taxpayer of any return,
declaration, statement or other document required to be made or
filed under this article shall constitute a certification by the
taxpayer that the statements, including the taxpayer's residency
status and years of service as an active member of the
Pennsylvania National Guard, contained in the return,
declaration, statement or other document are true and that any
copy filed is a true copy.
Section 1806-I. Guidelines.
(a) Guidelines.--The department shall adopt guidelines,
including forms, necessary to administer this article.
(b) Joint income.--A tax credit granted under this article
may be applied to the tax liability of the spouse of an eligible
taxpayer if both the eligible taxpayer and the spouse report
income on a joint income tax return.
Section 1807-I. Report to General Assembly.
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No later than December 31, 2027, and each December 31
thereafter, the department shall submit a report on the tax
credits granted under this article. The report shall include the
number of active members of the Pennsylvania National Guard who
utilized the tax credit as of the date of the report and the
amount of credits approved. The report may include
recommendations for changes in the calculation or administration
of the tax credit. The report shall be submitted to the
chairperson and minority chairperson of the Appropriations
Committee of the Senate, the chairperson and minority
chairperson of the Appropriations Committee of the House of
Representatives, the chairperson and minority chairperson of the
Veterans Affairs and Emergency Preparedness Committee of the
Senate and the chairperson and minority chairperson of the
Veterans Affairs and Emergency Preparedness Committee of the
House of Representatives. The report may include other
information that the department deems appropriate.
Section 1808-I. Penalty.
A taxpayer who claims a credit under this article but fails
to meet the standards under this article shall repay the full
amount of the tax credit to the Commonwealth plus interest as
prescribed under section 351.
Section 2. This act shall take effect immediately.
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