HB 959 — 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, further providing for refund or credit of overpayment and providing for interest on refund or credit of overpayments; in general provisions, providing for interest on taxes due the Commonwealth and for interest on overpayments; and making repeals.

PRINTER'S NO.   1033

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 959
                                               Session of
                                                 2025

     INTRODUCED BY GLEIM, HAMM, M. MACKENZIE, GROVE, KAUFFMAN, ROWE,
        ZIMMERMAN AND FINK, MARCH 18, 2025

     REFERRED TO COMMITTEE ON FINANCE, MARCH 18, 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, further providing for
11      refund or credit of overpayment and providing for interest on
12      refund or credit of overpayments; in general provisions,
13      providing for interest on taxes due the Commonwealth and for
14      interest on overpayments; and making repeals.
15      The General Assembly of the Commonwealth of Pennsylvania
16   hereby enacts as follows:
17      Section 1.    Section 346 of the act of March 4, 1971 (P.L.6,
18   No.2), known as the Tax Reform Code of 1971, is amended to read:
19      Section 346.    Refund or Credit of Overpayment.--(a)   In the
20   case of any payment of tax not due under this article, the
21   department may credit the amount of such overpayment against any
22   liability in respect of the tax imposed by this article on the
23   part of the person who made the overpayment and shall refund any
24   balance to such person.
 1         [(b)    The department is authorized to prescribe regulations
 2   providing for the crediting against the estimated tax for any
 3   taxable year of the amount determined to be an overpayment of
 4   the tax for a preceding taxable year.]
 5         (c)    If the taxpayer has paid as an installment of estimated
 6   tax more than the correct amount of such installment, the
 7   overpayment shall be credited against the unpaid installments,
 8   if any. If the amount paid, whether or not on the basis of
 9   installments, exceeds the amount determined to be the correct
10   amount of the tax, the overpayment shall be credited or refunded
11   as provided in subsection (a) [or (b)].
12         Section 2.    The act is amended by adding sections to read:
13         Section 346.1.    Interest on Refund or Credit of
14   Overpayments.--Any tax paid by a taxpayer under this article
15   determined to be an overpayment shall be awarded interest in
16   accordance with Article XXX.
17         Section 3003.26.    Interest on Taxes Due the Commonwealth.--
18   (a)    All taxes due the Commonwealth shall bear simple interest
19   from the date the taxes become due and payable until paid. The
20   interest rate per annum during each calendar year shall be the
21   interest rate established by the Secretary of the Treasury of
22   the United States under the provisions of the Internal Revenue
23   Code of 1954 (68A Stat. 3), effective January 1 of that calendar
24   year without regard to any change or changes in the Federal
25   interest rate during that calendar year. Penalties shall not
26   bear any interest.
27         (b)    The payment of interest under this section shall not
28   relieve a person from the penalties, commissions or additional
29   tax prescribed by law for neglect or refusal to furnish timely
30   returns or reports to the Department of Revenue or to pay a

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 1   claim due the Commonwealth from the person.
 2      (c)   The Secretary of Revenue shall transmit notice of the
 3   rate of interest for each calendar year to the Legislative
 4   Reference Bureau for publication in the next available issue of
 5   the Pennsylvania Bulletin.
 6      (d)   (1)   In the case of a tentative tax, estimated tax or
 7   installment payment, interest shall run on any unpaid amount
 8   from the last day the payment is due to the date paid.
 9      (2)   In the case of tax which is resettled as a result of a
10   final change or correction of taxable income by the Commissioner
11   of the Internal Revenue Service or an agency or court of the
12   United States, interest shall be computed on any additional tax
13   due from thirty days after the corporation receives notice of
14   the final change or correction until paid.
15      (e)   Whenever the tax liability of a person is so affected by
16   any payment or credit, settlement or resettlement, assessment or
17   reassessment or determination or redetermination as to change
18   the interest liability of the person, the interest liability
19   shall be recomputed and adjusted by the Department of Revenue
20   and approved by the Department of the Auditor General in cases
21   in which the latter department is required to approve
22   settlements and resettlements, so as to correspond to the tax
23   liability as changed, without the necessity for the filing of a
24   petition or request by the person or by the Department of
25   Revenue and the Department of the Auditor General.
26      Section 3003.27.   Interest on Overpayments.--(a)    Simple
27   interest shall be allowed and paid by the Commonwealth upon an
28   overpayment to the Commonwealth of any tax. The interest shall
29   be allowed and paid for the period during which the Commonwealth
30   retained the overpayment, beginning with the date of the

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 1   overpayment, except that:
 2      (1)    A tax actually deducted and withheld at the source shall
 3   be deemed to have been overpaid on the last day prescribed for
 4   filing the return or report for the taxable year, determined
 5   without regard to any extension of time for filing.
 6      (2)    An amount overpaid as estimated tax, tentative tax or
 7   installment payment for a taxable year shall be deemed to have
 8   been overpaid on the last day prescribed for filing the final
 9   return or report for the taxable year, determined without regard
10   to any extension of time for filing.
11      (3)    An overpayment made before the last day prescribed for
12   payment shall be considered made on the last day.
13      (4)    An amount claimed to be overpaid with respect to which
14   an administrative review or appellate procedure is initiated in
15   the manner provided by law by the taxpayer shall be deemed to
16   have been overpaid sixty days following the date of initiation
17   of the review or procedure.
18      (5)    (i)   If an overpayment of tax is refunded or credited
19   within sixty days after the last date prescribed for filing the
20   final return or report of the tax, determined without regard to
21   any extension of time for filing, or, in case the final return
22   or report is filed after the last day, and is refunded or
23   credited within sixty days after the date the final return or
24   report is filed, no interest shall be allowed on the
25   overpayment.
26      (ii)    For the purposes of this paragraph, a final return or
27   report shall be deemed to have been filed only if, when the
28   final return or report is received by the Department of Revenue,
29   the final return or report has been submitted on a permitted
30   form containing:

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 1      (A)     the taxpayer's name, address and identifying number and
 2   the required signature; and
 3      (B)     sufficient required information, either on the permitted
 4   form or attachments to the form, to permit the verification of
 5   tax liability shown on the return.
 6      (6)     A tax paid to an officer, licensee or collector shall be
 7   deemed to have been overpaid no earlier than the first date that
 8   the tax is required by law to be reported and transmitted to the
 9   Department of Revenue by the officer, licensee or collector.
10      (7)     Overpayment of interest or penalty shall not bear any
11   interest.
12      (b)     Interest on overpayments shall be allowed and paid at
13   the rate as is prescribed for underpayments under section 346.1
14   less two per cent.
15      (c)     Interest on overpayments of the tax imposed under this
16   article shall be allowed and paid at the same rate as is
17   prescribed for overpayments under section 346.1.
18      (d)     Interest on overpayments shall be allowed and paid as
19   follows:
20      (1)     In the case of a cash refund, from the date of the
21   overpayment to a date preceding the date of the Commonwealth's
22   refund check by not more than thirty days.
23      (2)     In the case of a credit for an overpayment, from the
24   date of the overpayment to:
25      (i)     the date of the Commonwealth's notice to the taxpayer of
26   the final determination of the credit; or
27      (ii)     the date as of which the credit is applied, whichever
28   first occurs, except that in the case of a cash refund of a
29   previously determined credit, interest shall be allowed and paid
30   on the amount of the credit from a date ninety days after the

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 1   filing of a petition for a cash refund to a date preceding the
 2   date of the refund check by not more than thirty days whether or
 3   not the refund check is accepted by the taxpayer after tender to
 4   the taxpayer.
 5      (3)   The taxpayer's acceptance of the Commonwealth's check
 6   shall be without prejudice to any right of the taxpayer to claim
 7   any additional overpayment and interest thereon. Tender of a
 8   refund check shall be deemed acceptance thereof for the purposes
 9   of this section.
10      (e)   Interest on overpayment shall not be allowed or paid if
11   a taxpayer indicates an intent to carry forward a refund or
12   credit to be applied in a succeeding taxable year.
13      (f)   For purposes of this section, the term "overpayment"
14   means a payment of tax which is determined in the manner
15   provided by law not to be legally due.
16      Section 3.    Repeals are as follows:
17            (1)   The General Assembly finds that the repeals under
18      paragraph (2) are necessary to effectuate this act.
19            (2)   Sections 806 and 806.1 of the act of April 9, 1929
20      (P.L.343, No.176), known as The Fiscal Code, are repealed.
21      Section 4.    A reference in any other act to former section
22   806 or 806.1 of the act of April 9, 1929 (P.L.343, No.176),
23   known as The Fiscal Code, shall be deemed to be a reference to
24   section 3003.26 or 3003.27, respectively, of the act of March 4,
25   1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
26      Section 5.    This act shall take effect in 60 days.




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