In personal income tax, further providing for classes of income.
Summary
HB1846 amends Pennsylvania’s Tax Reform Code to exclude from personal income tax any compensation received by an individual taxpayer who is under 18 years of age. In practical terms, the bill creates a new class of income that is not subject to state income tax when earned by minors, and it applies prospectively to taxable years beginning after December 31, 2025.
The bill is narrow in scope and does not change the overall structure of the personal income tax; instead, it adds a specific exemption within the existing list of income classes that are not taxable. Because the exemption is tied to the taxpayer’s age rather than the type of work or source of compensation, it would affect wages and other compensation earned by minors under the state income tax system. The act would take effect immediately upon enactment, though the tax exemption itself would not apply until the 2026 tax year.
Impact
HB1846 would amend section 303 of the Tax Reform Code of 1971 by adding a new exclusion from taxable income for compensation received by taxpayers under age 18. This would reduce the personal income tax base for Pennsylvania beginning with taxable years after December 31, 2025, and would require the Department of Revenue to administer the new exemption in future tax filings. The bill would primarily affect minor workers, employers who pay them, and tax preparers handling Pennsylvania personal income tax returns.
Sentiment
No committee transcript or recorded vote information is available, so there is no documented debate or formal legislative sentiment in the provided materials. Based on the bill text alone, the measure appears straightforward and targeted, with no visible amendments or competing provisions in the available record.
Contention
The main policy question raised by the bill is whether compensation earned by minors should be exempt from state income tax, which could be viewed as a tax relief measure for young workers or as a narrowing of the tax base. Potential points of concern may include revenue loss, administrative verification of age, and whether the exemption should apply to all compensation or only certain types of earnings. However, no specific objections or supporters are identified in the provided discussion materials.