Nearly one Million Pennsylvanians too Receive New State Tax Credit in 2025
HARRISBURG, PA – Approximately 940,246 working Pennsylvanians are set to benefit from a new state tax credit begining with tax filings in 2025, offering substantial relief to low-to-moderate income families. Teh credit, a first of its kind in Pennsylvania in over half a century, is designed to supplement the federal Earned income Tax Credit (EITC) and directly address financial hardship for working individuals and families.
The new “Working Pennsylvanians Tax Credit” will provide a state tax break to those who already qualify for the federal EITC. The amount of the state credit varies based on the number of qualifying dependents claimed, ranging from a maximum of $65 for those with no dependents to $805 for those with three or more. Maximum federal credit amounts range from $649 (no dependents) to $8,046 (three or more dependents).
“For the last 54 years, the state government has not advanced a new initiative in the tax system to address poverty and assist all working families until this year,” explained Pennsylvania Revenue Secretary Pat Browne.Governor Josh Shapiro (D) emphasized the simplicity of accessing the benefit: “All you have to do to qualify for this relief is to file your taxes, and if you get the federal break, you’re now going to get the state tax break.”
The credit received bipartisan support in the state legislature, with Senate President Pro Tempore Kim Ward (R) stating, “Helping the working poor people that are going to work, we should be so proud of that, all of us on both sides of the aisle.” Advocates highlight the broader impact of the credit, noting that many beneficiaries are children living in poverty. “LetS not forget that children who are just riding along in their circumstance, they have no control over their circumstance,” said an advocate, emphasizing the need to consider the impact on vulnerable youth.
The estimated cost of the program is $193 million. The Department of Revenue is preparing to implement the credit for the current tax year,meaning eligible Pennsylvanians will be able to claim the benefit when filing their taxes in the coming months. As State Representative Sara McClinton noted, the credit addresses a critical need: “People will judge you and say, ‘Well, why don’t you have savings? Why don’t you have a little extra?'” she said. “well, the truth of the matter is, when you’re working paycheck to paycheck, there isn’t any extra, there isn’t any savings.”
