In personal income tax, further providing for income taxes imposed by other states.
HB1471 amends Pennsylvania’s Tax Reform Code to revise the state personal income tax credit for taxes paid to other jurisdictions. Under current law, a Pennsylvania resident may claim a credit for certain income, wage, or similar taxes imposed by another state on income that is also taxed by Pennsylvania. This bill clarifies and broadens that credit to expressly include taxes imposed on a taxpayer’s distributive share or other share of income from a Pennsylvania S corporation, limited liability company, or partnership when another state taxes that income.
The bill also updates the definition of “state” for purposes of the credit to include a U.S. state, the District of Columbia, Puerto Rico, and U.S. territories and possessions. In addition, it allows pass-through entities or their owners to submit a certified statement in lieu of filing copies of each out-of-state return, so long as the statement includes each owner’s share of taxable income, the amount of state income tax paid, and any other information required by the Department of Revenue. The changes to subsections (a) and (c) apply retroactively to taxable years beginning after December 31, 2021, and the act takes effect immediately.
The bill’s impact is primarily on Pennsylvania resident taxpayers with income taxed by other jurisdictions, especially owners of pass-through businesses such as partnerships, LLCs, and S corporations. It would affect how the Department of Revenue administers the credit and the documentation required to claim it, potentially simplifying compliance for taxpayers who have multi-state income and reducing the need to gather multiple state return copies.
Because there are no committee transcripts or recorded votes provided, there is no documented debate or formal vote history to gauge sentiment. Based on the bill text, the measure appears technical and taxpayer-relief oriented, aimed at clarifying existing law and easing administration rather than creating a new tax benefit. No specific points of contention are identified in the available materials, though the retroactive effective date and the expansion of credit eligibility for pass-through income could be areas of administrative or fiscal interest.
HB1471 would amend section 314 of the Tax Reform Code of 1971 to expand and clarify Pennsylvania’s credit for income taxes paid to other states or jurisdictions. It would expressly cover taxes imposed on distributive shares from pass-through entities, broaden the definition of qualifying jurisdictions, and permit certified statements as documentation instead of copies of each out-of-state return. The bill would affect resident taxpayers, partnerships, LLCs, S corporations, and the Department of Revenue, and it applies retroactively to taxable years beginning after December 31, 2021.
No committee discussion or vote record is provided, so there is no direct evidence of support or opposition from legislative debate. The bill’s text suggests a generally favorable, technical tax-administration measure intended to clarify credits for taxes paid to other jurisdictions and reduce compliance burdens for taxpayers with multi-state income. The absence of recorded controversy indicates it may be viewed as a routine correction or simplification rather than a major policy change.
There are no transcripts, amendments, or votes in the provided materials, so no specific points of contention can be identified from the record. Potential issues that could arise from the text include the retroactive application to tax years beginning after December 31, 2021, the fiscal effect of expanding credit eligibility for pass-through income, and the administrative standards the Department of Revenue may require for certified statements in place of full state return copies.