SB 392 — 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 classes of income.

PRINTER'S NO.    338

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                        SENATE BILL
                        No. 392
                                                Session of
                                                  2025

     INTRODUCED BY BOSCOLA, MARCH 6, 2025

     REFERRED TO FINANCE, MARCH 6, 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      classes of income.
12      The General Assembly of the Commonwealth of Pennsylvania
13   hereby enacts as follows:
14      Section 1.     Section 303 of the act of March 4, 1971 (P.L.6,
15   No.2), known as the Tax Reform Code of 1971, is amended by
16   adding a subsection to read:
17      Section 303.    Classes of Income.--* * *
18      (a.13)   (1)   An amount paid as real property taxes that
19   exceeds the amount of the deduction for real property taxes
20   permitted under 26 U.S.C. § 164(b)(6)(B) (relating to taxes)
21   shall be deductible from taxable income on the annual personal
22   income tax return. The deduction shall not result in taxable
23   income being less than zero.
 1      (2)    For purposes of this subsection:
 2      (i)    The term "homestead" means the owner-occupied, primary
 3   residence and the parcel of land within this Commonwealth on
 4   which the residence is located and other improvements located on
 5   the parcel. If a portion of the structure is used for a
 6   nonresidential purpose, the homestead is equal to that portion
 7   of the property used as the primary residence of the owner-
 8   occupant.
 9      (ii)     The term "real property tax" means the total real
10   property tax imposed by a school district on a homestead for the
11   tax year. Real property tax imposed by a city of the first class
12   shall constitute taxes imposed by a school district for the
13   purposes of this definition. The term does not include payments
14   made in lieu of taxes or any penalties or interest paid in
15   connection with the tax.
16      (iii)    The term "residence" means a structure used as a place
17   of habitation by the owner of the structure.
18      * * *
19      Section 2.    The addition of section 303(a.13) of the act
20   shall apply to taxable years beginning after December 31, 2025.
21      Section 3.    This act shall take effect immediately.




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