In tax credit and tax benefit administration, further providing for definitions; providing for Internship Tax Credit Program; and promulgating regulations.
HB2507 would create a new Internship Tax Credit Program in Pennsylvania’s Tax Reform Code. The program would allow certain qualifying small businesses to claim a tax credit for employing a qualified intern in a structured internship that provides work experience or school credit, lasts at least six weeks, pays at least minimum wage, and averages 20 hours per week. To qualify, the intern must be a Pennsylvania resident, have completed at least 30 college credit hours, and maintain at least a 2.5 GPA. The bill applies to taxable years beginning after December 31, 2026, and the Department of Revenue would be responsible for administering the program, issuing forms, maintaining a waiting list, and adopting regulations and interim guidelines.
The credit would be available against certain business taxes, but not against employer withholding taxes. A qualified business could claim up to $2,000 per intern and no more than $10,000 per tax year, with a statewide cap of $2.5 million per fiscal year. The bill also bars carryforwards, carrybacks, refunds, and sale or assignment of the credit. The program would expire for taxable years beginning after December 31, 2032, unless extended by future legislation.
The bill’s impact on state law is to add a new article to the Tax Reform Code establishing a targeted tax incentive for internship hiring, while also amending the definition of “tax credit” to include this new program. It would affect small businesses operating primarily in Pennsylvania, eligible higher education students, and the Department of Revenue, which would need to administer applications, verify eligibility, and manage the annual credit cap and waiting list process.
No committee transcript or recorded votes were provided, so there is no direct evidence of legislative debate or formal support/opposition in the materials supplied. Based on the bill text alone, the measure appears designed to encourage paid internships and workforce development, suggesting a generally pro-business and pro-education policy approach. Potential points of contention likely include the cost of the tax expenditure, the limited eligibility rules for both businesses and interns, and the administrative burden of verifying qualifications and allocating credits under a capped program.
Overall, the bill is a temporary, capped tax incentive aimed at expanding paid internship opportunities for Pennsylvania students while giving qualifying small businesses a modest tax benefit for participation.
HB2507 would amend the Tax Reform Code of 1971 to create a new Article XIX-L establishing an Internship Tax Credit Program. It would authorize eligible small businesses to claim a nonrefundable tax credit against specified business taxes for employing qualifying Pennsylvania-resident interns in structured, paid internships, subject to annual and per-intern caps and a statewide fiscal-year cap. The Department of Revenue would be required to administer the program, issue regulations and guidelines, verify eligibility, maintain a waiting list when credits are exhausted, and enforce compliance rules; the credit would apply beginning with taxable years after December 31, 2026, and would sunset for taxable years beginning after December 31, 2032.
No committee discussion or vote history was provided, so there is no recorded legislative sentiment in the supplied materials. From the bill text, the measure appears to have a generally positive policy orientation toward workforce development, higher education, and small business support. The structure of the credit, the statewide cap, and the expiration date suggest an attempt to balance incentive goals with fiscal restraint.
Because there are no transcripts or votes, specific objections are not documented. Likely areas of contention include whether the $2.5 million annual cap is sufficient or too costly, whether the eligibility criteria are too narrow by limiting the program to small businesses and interns with at least 30 credits and a 2.5 GPA, and whether the Department of Revenue can efficiently administer verification, waiting lists, and allocation of credits. Some stakeholders may also question the exclusion of employer withholding taxes and the prohibition on carryforward, refund, or transfer of unused credits.