Corporate Net Income Tax
Domestic and foreign corporations are subject to the corporate net income tax for the privilege of doing business; carrying on activities; having capital or property employed or used in Pennsylvania; or owning property in Pennsylvania.
This tax is levied on federal taxable income, without
the federal net operating loss deduction and special deductions, and modified
by certain additions and subtractions. For tax years beginning January 1, 1995
through December 31, 2022, a tax rate of 9.99 percent is in effect. The
following rate reduction schedule applies to subsequent tax years
January 1, 2023 through December 31, 2023
| 8.99 percent
|
January 1, 2024 through December 31, 2024
| 8.49 percent
|
January 1, 2025 through December 31, 2025
| 7.99 percent
|
January 1, 2026 through December 31, 2026
| 7.49 percent
|
January 1, 2027 through December 31, 2027
| 6.99 percent
|
January 1, 2028 through December 31, 2028
| 6.49 percent
|
January 1, 2029 through December 31, 2029
| 5.99 percent
|
January 1, 2030 through December 31, 2030
| 5.49 percent
|
January 1, 2031 and each taxable year thereafter
| 4.99 percent
|
Entities exempt from the corporate net income tax include certain qualifying:
- not-for-profit organizations
- homeowners’ associations
- membership organizations
- agricultural cooperatives
- business trusts
- non-PA companies that limit business activity to solicitation of sales of tangible personal property in PA
Further, corporations subject to bank and trust companies shares tax, gross premiums tax, mutual thrift tax and title insurance company shares tax are exempt from corporate net income tax.
Any entity classified as a corporation for federal income tax purposes is considered a corporation in Pennsylvania.
For detailed and historic Pennsylvania corporate net income tax information, please review the Tax Compendium.
Taxpayers subject to the corporate net income tax may also be subject to the gross receipts tax, corporate loans tax, surplus lines agent tax, and/or the gross premiums tax for premiums paid to unauthorized foreign insurance companies.