Bill
Bill > HB1514
summary
Introduced
05/29/2025
05/29/2025
In Committee
05/29/2025
05/29/2025
Crossed Over
Passed
Dead
Introduced Session
2025-2026 Regular Session
Bill Summary
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," in personal income tax, providing for tax paid on tipped wages.
AI Summary
This bill introduces a new tax credit for workers who receive tips, providing relief for employees in industries like restaurants and hospitality where gratuities are a significant part of their income. Specifically, the bill allows taxpayers to claim a tax credit equal to the amount of income received in tips, multiplied by the applicable tax rate. The credit is fully refundable, meaning workers can receive the full tax credit even if it exceeds their tax liability. To claim the credit, taxpayers must provide documentation from their employer detailing their tip income, using a standardized form (34 Pa. Code § 231.36). The bill defines "tipped wages" as voluntary payments made by customers that are not set by the employer, and it stipulates that any previous tax forgiveness will reduce the total credit amount. The tax credit must be incorporated into the standard Pennsylvania tax form (PA 40), making it easy for workers to claim. The bill will apply to tax years beginning after December 31, 2025, giving employers and the Department of Revenue time to prepare for the new regulation, and it takes effect immediately upon passage.
Committee Categories
Budget and Finance
Sponsors (19)
Joe Hogan (R)*,
Mike Armanini (R),
Bud Cook (R),
Jill Cooper (R),
Eric Davanzo (R),
Gary Day (R),
Charity Grimm Krupa (R),
Tom Jones (R),
Rob Kauffman (R),
Roman Kozak (R),
Thomas Kutz (R),
Robert Leadbeter (R),
Kristin Marcell (R),
Brad Roae (R),
David Rowe (R),
Brian Smith (R),
Craig Staats (R),
K.C. Tomlinson (R),
Ryan Warner (R),
Last Action
Referred to Finance (on 05/29/2025)
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