HB 2511 — 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 exemption from tax for early withdrawals from certain accounts.

PRINTER'S NO.   3398

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 2511
                                               Session of
                                                 2026

     INTRODUCED BY INGLIS, McNEILL, HILL-EVANS, GIRAL, BIZZARRO,
        MERSKI, VENKAT, HAMM, SANCHEZ, CEPEDA-FREYTIZ, CERRATO,
        NEILSON, MALAGARI AND MAYES, MAY 12, 2026

     REFERRED TO COMMITTEE ON FINANCE, MAY 13, 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 personal income tax, providing for exemption
11      from tax for early withdrawals from certain accounts.
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 304.3.    Exception from tax for early withdrawals from
18   certain accounts.--(a)    In accordance with the current tax
19   exemption by the Federal Government, the following shall be
20   exempt from taxation as personal income in this Commonwealth, to
21   the limits under subsection (b):
22      (1)   Expenses related to the birth or adoption of a child.
 1      (2)   The purchase of a house by a first time homebuyer.
 2      (b)   The following amounts shall be excluded from tax:
 3      (1)   Each parent may withdraw up to five thousand dollars
 4   ($5,000) individually for each child born or adopted.
 5      (2)   The parents may withdraw up to ten thousand dollars
 6   ($10,000) together for each child born or adopted.
 7      (3)   Each first time homebuyer may withdraw up to ten
 8   thousand dollars ($10,000).
 9      Section 2.   This act shall apply to tax years beginning on or
10   after January 1, 2027.
11      Section 3.   This act shall take effect in 60 days.




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