Pennsylvania tax forms & filing.

Things to know about filing in Pennsylvania

• Pennsylvania does not start from federal AGI — PA computes income separately under its own rules. Federal items like IRA contributions, HSA contributions, and student loan interest do NOT reduce PA taxable income. This is one of the most-misfiled state returns in DIY software because of the conformity gap.
• Pennsylvania exempts qualified retirement income (Social Security, qualified pensions, 401(k) and IRA distributions after retirement age) from state income tax — making PA one of the most retirement-friendly state tax environments.
• Pennsylvania municipalities and school districts levy a local Earned Income Tax (typically 1-3%) on wages and self-employment income, administered locally by collectors like Berkheimer Tax Administrator and Keystone Collections Group. This is separate from the state return.
• Pennsylvania has reciprocity with Indiana, Maryland, New Jersey, Ohio, Virginia, and West Virginia for wage income. Residents working in those states pay only PA tax on wages.
• Pennsylvania does not allow capital loss carryovers and treats capital gains as ordinary income at the flat rate.

Pennsylvania local Earned Income Tax — what you need to know

Pennsylvania's local Earned Income Tax (EIT) is the single biggest source of state-return confusion for new Pennsylvania residents. The state itself has a flat tax — but your school district and your municipality each levy their own EIT, which together typically total 1% to 3% of wages and self-employment income, withheld by employers and remitted by the local tax collector.

There are around 70 local tax collectors in Pennsylvania, with the two largest being Berkheimer Tax Administrator and Keystone Collections Group. Your collector is determined by your municipality — and the rate is determined by both your municipality and your school district, combined.

What new Pennsylvania residents need to do: complete a Residency Certification Form for your employer (so they withhold the correct local rate), file an annual local EIT return with your collector (in addition to the state PA-40), and reconcile any over- or under-withholding. If you move within Pennsylvania during the year, you may end up filing two local returns — one with each collector.

Pennsylvania doesn't start from federal AGI — what that means

Most state income tax returns start from your federal Adjusted Gross Income (AGI) or federal taxable income and add or subtract state-specific items. Pennsylvania doesn't. Pennsylvania computes income from scratch under its own definitions, which means many federal adjustments don't carry over to your state return.

Practical effect: items that reduce your federal AGI — traditional IRA contributions, HSA contributions, student loan interest, alimony paid under pre-2019 divorce agreements, the educator expense deduction — do NOT reduce your Pennsylvania taxable compensation. Pennsylvania taxes the gross wage figure essentially as it appears on the W-2.

This is the single most common DIY-software error we see on Pennsylvania returns. The federal calculation reduces AGI for IRA contributions; the Pennsylvania return should not. DIY software occasionally carries the federal subtraction over incorrectly, understating PA tax and triggering a state notice months later.

Pennsylvania-resident multi-state filing patterns we see most often

Pennsylvania resident, New Jersey or Ohio employer: Reciprocity applies — only Pennsylvania tax is owed on wages. Employer should withhold PA only; if NJ or OH is withheld in error, file a non-resident return in the work state to recover.

Pennsylvania resident, New York or Delaware employer: No reciprocity. File the work-state non-resident return and claim PA credit for taxes paid to another state.

Pennsylvania resident, multiple PA local tax collectors during the year: Common for clients who move within PA. File a separate local EIT return with each collector for the portion of the year you lived in that jurisdiction. We handle this as part of the engagement.

Where's my refund?

The Pennsylvania Department of Revenue runs the official refund-status tracker. You'll need your Social Security number, filing status, and exact refund amount (in some cases, the tax year and a return-amount input).

Check your Pennsylvania refund status →

Multi-state considerations

If you lived or worked in more than one state during the tax year, you typically file a part-year resident return in each state. If you live in one state and work in another, you usually file as a resident where you live and as a nonresident in the work state — claiming a credit on the resident return for taxes paid to the work state. Reciprocity agreements between some neighboring states change this default; we map this out at intake.

Pennsylvania-specific multi-state nuances are addressed in the quirks list above when they apply.

Get the current-year forms

State tax rates, brackets, and forms change every year. We point to the Pennsylvania Department of Revenue as the authoritative source for current-year information. Form numbers above are stable; rates, deduction amounts, and credit limits are not — always verify before relying on a specific dollar amount.

Open the Pennsylvania Department of Revenue website →