HB 820 — 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; and providing for working Pennsylvanians tax credit.

PRINTER'S NO.    824

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 820
                                               Session of
                                                 2025

     INTRODUCED BY SAPPEY, WAXMAN, GUENST, KENYATTA, PIELLI,
        MALAGARI, KHAN, GIRAL, PROBST, SANCHEZ, NEILSON, HOWARD,
        SAMUELSON, FREEMAN, DAVIDSON, CIRESI, OTTEN, CERRATO AND
        D. WILLIAMS, MARCH 3, 2025

     REFERRED TO COMMITTEE ON FINANCE, MARCH 3, 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 tax credit and tax benefit administration,
11      further providing for definitions; and providing for working
12      Pennsylvanians tax credit.
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      * * *
 1      "Tax credit."     A tax credit authorized under any of the
 2   following:
 3             * * *
 4             (8.2)   Article XVIII-I.
 5             * * *
 6      Section 2.     The act is amended by adding an article to read:
 7                               ARTICLE XVIII-I
 8                      WORKING PENNSYLVANIANS TAX CREDIT
 9   Section 1801-I.     Scope of article.
10      This article relates to the working Pennsylvanians tax
11   credit.
12   Section 1802-I.     Definitions.
13      The following words and phrases when used in this article
14   shall have the meanings given to them in this section unless the
15   context clearly indicates otherwise:
16      "Department."     The Department of Revenue of the Commonwealth.
17      "Federal earned income tax credit."        The earned income tax
18   credit provided under 26 U.S.C. § 32 (relating to earned
19   income).
20      "Qualified taxpayer."     A taxpayer eligible to receive a tax
21   credit under section 1804-I.
22      "Tax credit."     The working Pennsylvanians tax credit provided
23   under this article.
24      "Tax liability."     Tax liability under Article III.
25      "Taxpayer."     An individual subject to the tax under Article
26   III.
27   Section 1803-I.     Working Pennsylvanians tax credit.
28      (a)     Application of tax credit.--A qualified taxpayer may
29   apply the tax credit against the qualified taxpayer's tax
30   liability.

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 1      (b)   Spouses who file separately.--In the case of spouses who
 2   are both eligible to receive the tax credit and who file a joint
 3   Federal tax return but who elect to determine their taxes
 4   separately, the tax credit may only be used by the spouse with
 5   the greater tax otherwise due, computed without regard to the
 6   tax credit.
 7      (c)   Amount of tax credit.--The tax credit shall be equal to
 8   30% of the Federal earned income tax credit received by the
 9   taxpayer for the same taxable year.
10      (d)   Credit refundable.--If the amount of credit which the
11   qualified taxpayer is eligible to receive under this section
12   exceeds the qualified taxpayer's tax liability, the department
13   shall refund the excess amount to the qualified taxpayer.
14   Section 1804-I.    Eligibility.
15      A taxpayer is eligible to receive a tax credit if the
16   taxpayer claimed the Federal earned income tax credit during the
17   same taxable year.
18   Section 1805-I.    Regulations.
19      (a)   Rules and regulations.--The department may promulgate
20   rules and regulations to administer and enforce this article.
21      (b)   Guidelines.--The department may develop written
22   guidelines for the implementation of this article. The
23   guidelines shall be in effect until the department promulgates
24   rules and regulations for the implementation of the provisions
25   of this article.
26   Section 1806-I.    Applicability.
27      This article shall apply to taxable years beginning after
28   December 31, 2024.
29      Section 3.     This act shall take effect immediately.



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