Pennsylvania Tax Changes 2026: WPTC and PA-40 | HelloBooks The new Working Pennsylvanians Tax Credit, the student loan interest deduction, a redesigned Schedule OC and higher estimated payment thresholds.
Pennsylvania’s flat rate did not move, but the PA-40 now carries a state version of the earned income credit and several form changes.
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Working Pennsylvanians Tax Credit
10% of federal EITC
Applies: Tax years 2025 and 2026From IRS.gov · checked October 10, 2026
The Working Pennsylvanians Tax Credit equals 10% of the client’s federal EITC and is claimed on the PA-40, starting with the 2026 tax season. The department says anyone who qualifies for the federal EITC qualifies for the state credit, so it should be automatic for those clients.
The return is due by midnight, April 15, 2026.
Pennsylvania still does not follow federal bonus depreciation, and tips remain taxable compensation. Neither is new for 2025, but both matter more now that the federal return treats them differently.
General information for tax professionals, not advice on a specific return. Figures are from IRS.gov on the date shown; check the current IRS instructions before filing.
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