The average resident of Pennsylvania has an annual tax bill of $11,199.82, which just about the median level for all states. Of that, $6,289.40 goes to federal income taxes, leaving just under $5,000 you can attribute to state taxes — be they income, sales or property taxes.
Understanding the basics of the tax code in the Keystone State is important to understanding what to expect when it comes to the tax you’ll pay come April or at the register with each sale, so here’s a closer look at Pennsylvania state tax.
|Pennsylvania State Taxes|
|Rate Range of Taxes||0% to 15%|
|Sales Tax Rate Range||6-8%|
|Income Tax Rate Range||3.07%|
|Inheritance Tax Rate Range||0% to 15%|
|Effective Property Tax||1.506%|
Pennsylvania State Income Tax
Pennsylvania’s state income tax is a flat tax, meaning the income tax rate is 3.07 percent across all income levels with no tax brackets. That same Pennsylvania tax rate for everyone makes it just one of eight states that don’t have a progressive income tax.
The state does offer a Tax Forgiveness Program that can allow people with incomes on the lower end of the scale to eliminate their income tax burden. Qualifications vary based on the number of dependents you have and your income. You can ultimately reduce your tax burden by 100 percent in some cases, so it’s important if you have children to consult with a tax professional or look up what you can receive back.
A married couple with three children will be eligible for at least some tax forgiveness as long as they earn less than $43,750 a year. And, if their combined income is under $41,500, they can get back the entirety of what they pay toward Pennsylvania income taxes.
Pennsylvania State Sales Tax
The average sales tax across the state of Pennsylvania is 6.34 percent — the 16th-lowest in the country — and costs the average Pennsylvanian about $2,000 a year.
|Pennsylvania Sales Tax|
|Statewide Pennsylvania Sales Tax Rate||6%|
|Highest Effective Sales Tax Rate||8%|
|Lowest Effective Sales Tax Rate||6%|
Whereas many states have an array of different sales tax rates from county to county, Pennsylvania keeps things simple: Alleghany County (home to Pittsburgh) charges an additional 1 percent, and 2 percent in Philadelphia County.
Pennsylvania Property Tax
Property tax in Pennsylvania is mostly collected at local levels, so the rate paid by Pennsylvanians will vary based on where they live, but the effective rate statewide is 1.506 percent on a range from 0.9 percent in Bedford County to 2.41 percent in Monroe County. The average amount paid comes to just under $2,500 a year.
Pennsylvanians with relatively low incomes can reduce their tax burden some with the Property Tax/Rent Rebate program. Pennsylvanian homeowners earning less than $35,000 a year and renters earning under $15,000 can get back as much as $650 from their tax bill.
|Pennsylvania Property Taxes|
Pennsylvania Inheritance Tax
Pennsylvania does have an inheritance tax that can be as high as 15 percent, but it depends entirely on who is receiving the funds in question. Transfers to a spouse or child under the age of 21 are untaxed, but once your child is over 21, the transfer comes with a 4.5 percent tax rate. Transfers to siblings are taxed at 12 percent, and any other person will pay a 15 percent rate with the exception of charitable organizations, for which there’s no tax.
Pennsylvania does not have an estate tax.
Click here to learn about the death tax.
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