HB 2507 — An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in tax credit and tax benefit administration, further providing for definitions; providing for Internship Tax Credit Program; and promulgating regulations.

PRINTER'S NO.   3393

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 2507
                                               Session of
                                                 2026

     INTRODUCED BY BERNSTINE, MAY 11, 2026

     REFERRED TO COMMITTEE ON FINANCE, MAY 11, 2026


                                    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 tax credit and tax benefit administration,
11      further providing for definitions; providing for Internship
12      Tax Credit Program; and promulgating regulations.
13      The General Assembly of the Commonwealth of Pennsylvania
14   hereby enacts as follows:
15      Section 1.    The definition of "tax credit" in section 1701-
16   A.1 of the act of March 4, 1971 (P.L.6, No.2), known as the Tax
17   Reform Code of 1971, is amended by adding a paragraph to read:
18   Section 1701-A.1.    Definitions.
19      The following words and phrases when used in this article
20   shall have the meanings given to them in this section unless the
21   context clearly indicates otherwise:
22      * * *
23      "Tax credit."    A tax credit authorized under any of the
 1   following:
 2          * * *
 3          (16.2)     Article XIX-L.
 4      * * *
 5      Section 2.     The act is amended by adding an article to read:
 6                               ARTICLE XIX-L
 7                       INTERNSHIP TAX CREDIT PROGRAM
 8   Section 1901-L.    Scope of article.
 9      This article relates to the Internship Tax Credit Program.
10   Section 1902-L.    Definitions.
11      The following words and phrases when used in this article
12   shall have the meanings given to them in this section unless the
13   context clearly indicates otherwise:
14      "Applicable taxes."     Any of the taxes due under Article III,
15   IV, VI, VII, VIII, IX or XV or a tax under Article XVI of the
16   act of May 17, 1921 (P.L.682, No.284), known as The Insurance
17   Company Law of 1921.
18      "Business firm."    An entity authorized to do business in this
19   Commonwealth and subject to taxes imposed under Article III, IV,
20   VI, VII, VIII, IX or XV.
21      "Department."    The Department of Revenue of the Commonwealth.
22      "Institution of higher education."       Any of the following:
23          (1)   A community college operating under Article XIX-A of
24      the act of March 10, 1949 (P.L.30, No.14), known as the
25      Public School Code of 1949.
26          (2)   A rural regional college established under Article
27      XIX-G of the Public School Code of 1949.
28          (3)   A university within the State System of Higher
29      Education under Article XX-A of the Public School Code of
30      1949.

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 1            (4)   A State-related institution as defined in section
 2      2001-C of the Public School Code of 1949.
 3            (5)   The Thaddeus Stevens College of Technology.
 4            (6)   An accredited private or independent college or
 5      university.
 6            (7)   A private licensed school as defined in section 2 of
 7      the act of December 15, 1986 (P.L.1585, No.174), known as the
 8      Private Licensed Schools Act.
 9      "Qualified business."    A business that:
10            (1)   operates primarily in this Commonwealth;
11            (2)   has been continuously operating for at least three
12      years; and
13            (3)   is a small business as defined in section 1702-B.
14      "Qualified intern."    An individual who:
15            (1)   has completed at least 30 credit hours at an
16      institution of higher education;
17            (2)   is a resident of this Commonwealth; and
18            (3)   has a minimum of a 2.5 grade point average on a 4.0
19      scale.
20      "Qualified internship."    A structured program that:
21            (1)   provides work experience or school credit for
22      students in their desired field;
23            (2)   pays at least minimum wage; and
24            (3)   is at least six weeks in length at an average of 20
25      hours per week.
26   Section 1903-L.    Internship Tax Credit.
27      (a)   Credit.--For taxable years beginning after December 31,
28   2026, a qualified business may claim the internship tax credit
29   in the taxable year in which the business employed a qualified
30   intern for a qualified internship and may apply the tax credit

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 1   against the qualified business's applicable taxes.
 2      (b)   Application.--A qualified business applying to claim an
 3   internship tax credit must complete and submit to the department
 4   an internship tax credit application on a form and in a manner
 5   as determined by the department. The form shall require the
 6   qualified business to provide the following:
 7            (1)   The names and student identification numbers or the
 8      last four digits of the Social Security numbers of all
 9      qualified interns for which the business is claiming the tax
10      credit.
11            (2)   Proof that an employee is a qualified intern, which
12      may be verified through providing a transcript or enrollment
13      verification letter along with a grade point average from an
14      institution of higher education in this Commonwealth.
15            (3)   Objectives of a qualified internship that develops
16      the intern's skills in the intern's chosen career field.
17      (c)   Waiting list.--The department shall maintain a waiting
18   list consisting of each business firm that chooses to be
19   included on the list and whose application has not been approved
20   because all available tax credits have been awarded. A business
21   firm that was not awarded a tax credit due to a lack of
22   available tax credits shall be notified of and offered a place
23   on the waiting list. When tax credits become available, the
24   department shall award the tax credits to the business firms in
25   the order in which the business firms were placed on the waiting
26   list.
27      (d)   Temporary increase in maximum tax credit available.--
28            (1)   The following shall apply if all tax credits
29      authorized under this article have not been awarded as of
30      October 1 of a fiscal year:

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 1                  (i)    For applications accepted by the department from
 2            October 1 through November 30 of the fiscal year, the
 3            limitations under section 1905-L(e) shall not apply.
 4                  (ii)   The department may accept applications from
 5            October 1 through November 30. A business firm, including
 6            a business firm that already applied for the maximum tax
 7            credits available under section 1905-L(e), may apply for
 8            up to the total amount of tax credits remaining available
 9            for total qualified interns employed during the tax year.
10            (2)   Prior to the award of tax credits applied for under
11      paragraph (1), the department shall first award tax credits
12      applied for by a business firm during the period October 1
13      through November 30 in an amount no greater than the maximum
14      amount of tax credits for which a business firm is eligible
15      under section 1905-L(e).
16   Section 1904-L.       Carryover, carryback, refund and assignment of
17                  credit.
18      (a)     Carryover, carryback and refund.--A qualified business
19   is not entitled to carry forward, carry back or obtain a refund
20   of all or a portion of an unused tax credit granted to the
21   qualified business under this article.
22      (b)     Sale or assignment of tax credit.--A qualified business
23   may not sell or assign a tax credit granted to the qualified
24   business under this article.
25   Section 1905-L.       Regulations.
26      (a)     Promulgation.--The department shall promulgate
27   regulations necessary to implement the provisions of this
28   article.
29      (b)     Guidelines.--The department shall develop written
30   guidelines for the implementation of this article. The

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 1   guidelines shall be in effect until the department promulgates
 2   regulations for the implementation of the provisions of this
 3   article.
 4      (c)     Statewide credit cap.--The total amount of tax credits
 5   given to business firms under this article may not exceed
 6   $2,500,000 per fiscal year.
 7      (d)     Restriction on applicability of credits.--No credit
 8   granted under this article may be applied against a tax withheld
 9   by an employer from an employee under Article III.
10      (e)     Limitation on total tax credit claimed by a qualified
11   business.--
12            (1)   The tax credit shall not exceed $2,000 per qualified
13      intern.
14            (2)   The tax credit shall not exceed $10,000 total per
15      tax year.
16   Section 1906-L.    Tax compliance.
17      The provisions of Article XVII-A.1 apply to the application
18   of this article.
19   Section 1907-L.    Applicability.
20      (a)     Taxable year.--The provisions of this article shall
21   apply to taxable years beginning after December 31, 2026.
22      (b)     Expiration of tax credit.--The department may not
23   approve a tax credit under this article for a taxable year
24   beginning after December 31, 2032.
25      Section 3.     This act shall take effect in 60 days.




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