HB 1514 — An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in personal income tax, providing for tax paid on tipped wages.

PRINTER'S NO.      1770

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 1514
                                               Session of
                                                 2025

     INTRODUCED BY HOGAN, WARNER, MARCELL, KAUFFMAN, COOK, DAVANZO,
        COOPER, ROAE, LEADBETER, STAATS, ARMANINI, KUTZ, ROWE, DAY,
        KOZAK, KRUPA, T. JONES AND SMITH, MAY 28, 2025

     REFERRED TO COMMITTEE ON FINANCE, MAY 29, 2025


                                    AN ACT
 1   Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
 2      act relating to tax reform and State taxation by codifying
 3      and enumerating certain subjects of taxation and imposing
 4      taxes thereon; providing procedures for the payment,
 5      collection, administration and enforcement thereof; providing
 6      for tax credits in certain cases; conferring powers and
 7      imposing duties upon the Department of Revenue, certain
 8      employers, fiduciaries, individuals, persons, corporations
 9      and other entities; prescribing crimes, offenses and
10      penalties," in personal income tax, providing for tax paid on
11      tipped wages.
12      The General Assembly of the Commonwealth of Pennsylvania
13   hereby enacts as follows:
14      Section 1.    The act of March 4, 1971 (P.L.6, No.2), known as
15   the Tax Reform Code of 1971, is amended by adding a section to
16   read:
17      Section 314.1.    Tax Paid on Tipped Wages.--(a)    A taxpayer
18   shall be entitled to a tax credit against the tax otherwise due
19   under this article equal to the amount of income which is in the
20   form of tipped wages multiplied by the tax rate under section
21   302.
22      (b)   A taxpayer shall calculate the amount of taxes paid on
 1   any tipped wages using the information furnished by the employer
 2   pursuant to 34 Pa. Code § 231.36 (relating to statement to
 3   employee).
 4      (c)     The tax credit shall be equal to one hundred per cent of
 5   any taxes paid pursuant to this article on tipped wages. If a
 6   taxpayer has received any tax forgiveness under section 304,
 7   that amount shall be deducted from the total amount of the tax
 8   credit.
 9      (d)     The tax credit shall be fully refundable.
10      (e)     The tax credit may not exceed the proportion of the tax
11   otherwise due under this article.
12      (f)     The Department of Revenue shall incorporate the filing
13   of the tax credit into the standard PA 40 form.
14      (g)     A taxpayer applying for a tax credit shall provide the
15   department with a copy of the taxpayer's paperwork under 34 Pa.
16   Code § 231.36 as proof of credit amount.
17      (h)     As used in this section:
18      "Tax credit" means the tax credit authorized under this
19   section.
20      "Tipped wages" means a form of compensation, taxable under
21   this article, where the payment is voluntary and made by a
22   customer to an employe and is not set by the employer or subject
23   to negotiation.
24      Section 2.     This act shall apply to taxable years beginning
25   after December 31, 2025.
26      Section 3.     This act shall take effect immediately.




20250HB1514PN1770                    - 2 -