If you are a resident of the state of Pennsylvania and you accumulated more than $35 in taxable income then you will be required to file a state income tax return. The same rules apply to residents as they do to non-residents and part-time residents. Having said that, it should be noted that there are some cases for a resident of Maryland, Virginia, West Virginia, New Jersey, or Ohio may not have to pay Pennsylvania taxes. This would happen under what’s called a reciprocity agreement which only affects employee compensation so there might still be some types of taxes that you’re responsible to pay.
Pennsylvania is an unusual state as far as state tax laws go. It implements a flat tax rate of 3.07% on its single status tax payers and its married filing jointly tax payers. Along with this unusual measure Pennsylvania also allows its tax payers to select a different status on their state returns than they did on their federal returns.
There are no personal exemptions allowed and there is not standard deduction on state returns. You may be surprised to learn that on top of all this Pennsylvania also doesn’t allow any itemized deductions. Retirement income in Pennsylvania isn’t taxed after the age of 59 ½ .
Property taxes are levied by local governments which means municipalities, counties, and school districts. Retired military pay is not taxable but there are some cases where retired military disability pay can be taxed. The state of Pennsylvania also implements both the inheritance tax and the estate tax. The inheritance tax rate depends upon the type of relationship between the heir and the decedent and even the decedent’s date of death. However, property that is jointly owned by a husband and wife is exempt from the tax.
Like most states, Pennsylvania suggests that you try e-filing your state taxes this year. It saves everyone time and money and drastically reduces the amount of paper we’d otherwise waste.