Pennsylvania Income Tax: The Lowest Flat Rate in the Nation
Pennsylvania levies a flat 3.07% income tax on all earned income — the lowest flat rate of any state that has a broad-based income tax. What makes PA unique is that this flat rate applies universally: whether you earn $25,000 or $2.5 million, the state takes 3.07%. There are no graduated brackets, no phase-outs, and no surtaxes on high earners.
Pennsylvania Tax Brackets (2026)
| Taxable Income | Rate |
|---|---|
| All income | 3.07% flat |
Local Earned Income Tax (EIT): The Hidden Layer
The 3.07% state rate is only part of the story. Pennsylvania municipalities levy their own Earned Income Tax (EIT) through local taxing authorities — and these local rates vary dramatically depending on where you live and work. Philadelphia has the highest local earned income tax of any major U.S. city.
| Location | PA State Rate | Local EIT | Combined Rate |
|---|---|---|---|
| Most of PA (suburban/rural) | 3.07% | 1.0–2.0% | 4.07–5.07% |
| Philadelphia (residents) | 3.07% | 3.75% | 6.82% |
| Pittsburgh (residents) | 3.07% | 3.0% | 6.07% |
| Allentown | 3.07% | 1.6% | 4.67% |
Real Scenario: Linda vs. Tom in the Philadelphia Suburbs
Same employer, very different tax bills
Linda earns $68,000 and lives in a suburb just outside Philadelphia city limits. Her PA state tax: $68,000 × 3.07% = $2,088. Her local EIT: $68,000 × 1.0% = $680. Total state + local: $2,768.
Her colleague Tom earns the same $68,000 but lives inside Philadelphia. Tom pays $68,000 × 3.75% = $2,550 in city wage tax alone — on top of the 3.07% state tax ($2,088). Tom’s total: $4,638 — $1,870 more than Linda for identical income.
This is why Philadelphia’s city wage tax has historically driven higher-income residents to the suburbs.
PA’s Biggest Tax Advantages
- Retirement income is fully exempt. Pennsylvania does not tax 401(k) distributions, IRA withdrawals, Social Security benefits, or most pension income. This makes PA one of the most retirement-friendly states in the country, especially for those living outside Philadelphia or Pittsburgh.
- Tax Forgiveness Program. Low-income earners may qualify for PA’s Tax Forgiveness program, which provides up to 100% forgiveness of state income tax owed. A family of four with income under ~$34,000 may owe nothing in PA state tax. Source: Pennsylvania Department of Revenue (revenue.pa.gov).
- Inheritance tax varies by relationship. PA levies no inheritance tax on transfers to spouses (0%), 4.5% for direct descendants and ancestors, 12% for siblings, and 15% for all others. This is a separate tax from income tax but relevant to overall tax planning.
Pennsylvania Tax Authority
For official PA tax rates, forms, and the Tax Forgiveness worksheet, visit the Pennsylvania Department of Revenue at revenue.pa.gov. PA income tax returns are due April 15.
Pennsylvania State Income Tax: What You Need to Know
Pennsylvania levies a state income tax on its residents. The state uses flat rate: 3.07% with a top marginal rate of 3.07%. This state tax is in addition to the federal income tax, which has seven brackets ranging from 10% to 37% for the 2026 tax year.
Pennsylvania has one of the lowest flat income tax rates in the nation. However, many municipalities also levy local income taxes.
To calculate your total income tax burden in Pennsylvania, you need to consider both federal and state taxes. Your federal tax is calculated on your taxable income after the standard deduction ($15,000 for single filers, $30,000 for married filing jointly in 2026). Your Pennsylvania state tax is then calculated separately based on Pennsylvania's own brackets and rules.
How Pennsylvania Income Tax Compares
Pennsylvania's top rate of 3.07% is below the national average for states that levy an income tax. For context, the highest state income tax rate in the nation is California's 13.3%, while the lowest non-zero flat rate is Pennsylvania's 3.07%.
9 states currently have no broad-based state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming. If you're comparing tax burdens across states, remember to also consider sales tax, property tax, and the overall cost of living.
Federal Income Tax Brackets for 2026
Regardless of which state you live in, all U.S. residents are subject to federal income tax. The 2026 federal tax brackets for single filers are:
- 10% — Income up to $11,600
- 12% — $11,601 to $47,150
- 22% — $47,151 to $100,525
- 24% — $100,526 to $191,950
- 32% — $191,951 to $243,725
- 35% — $243,726 to $609,350
- 37% — Over $609,350
The standard deduction for 2026 is $15,000 for single filers and $30,000 for married filing jointly. Use our federal income tax calculator to see exactly how much you owe and how your income is taxed across each bracket.
Tips to Reduce Your Pennsylvania Tax Bill
- Maximize retirement contributions — 401(k) and IRA contributions reduce your taxable income for both federal and most state returns.
- Use tax-advantaged accounts — HSAs and FSAs lower your taxable income while covering healthcare and dependent care costs.
- Claim all deductions — Review Pennsylvania's specific deductions and credits, which may differ from federal rules.
- Consider filing status — Married Filing Jointly often results in lower taxes thanks to wider brackets and a larger standard deduction.
Frequently Asked Questions
Does Pennsylvania have a state income tax?
Yes, Pennsylvania has a state income tax with flat rate: 3.07% and a top rate of 3.07%.
How do I calculate my total income tax in Pennsylvania?
Calculate your federal income tax using our calculator, then add your Pennsylvania state tax based on Pennsylvania's brackets and rates. The combined amount is your total income tax obligation.