On July 8, 2022, Pennsylvania Governor Tom Wolf signed the Commonwealth’s $45.2 billion 2022-23 budget, which includes record investments in education and community safety as well as a significant tax relief provision for Pennsylvania businesses.
The Pennsylvania corporate net income tax (CNIT) rate has not been changed since 1995, and at 9.99%, was the highest flat rate in the country. The new PA budget cuts the CNIT rate in half over the course of the next nine years.
Effective January 1, 2023, the rate will decrease 1%, to 8.99%. The CNIT will be cut by 0.5% each subsequent year, until the rate is reduced to 4.99% in 2031 (see related post). This major tax reform will overhaul the business tax structure and provide some relief for corporations, in an effort to spur economic growth throughout the state.
The approved 2022-23 spending plan creates additional tax relief for individuals and businesses through a new state child tax credit, and provides more money for property tax and rent rebate programs for senior citizens. The budget also includes significant funding for public schools, long-term care facilities, environmental protection and public safety programs. (see Governor’s press release)
The tax professionals at Grossman Yanak & Ford LLP will continue to monitor the details of these and future changes in the coming months. If you need assistance with your individual or corporate tax needs, please be sure to reach out to us at 412-338-9300.