Reg-1-Earned-Income-and-Net-Profits-Tax-Regulations- 2025

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  1. Click ‘Get Form’ to open it in the editor.
  2. Begin by entering your name, current address, city, state, and zip code in the designated fields. Ensure all information is accurate.
  3. If applicable, indicate if you are requesting an extension or filing an amended return by checking the appropriate box.
  4. Complete the Part Year Resident Schedule on the reverse side if you moved during the tax year. Make sure to account for all 12 months.
  5. Enter your total gross earned income as indicated on your W-2(s) in Line 1. Remember to include copies of W-2(s) when submitting your return.
  6. For Line 2, enter total business expenses and ensure you attach supporting documentation as required.
  7. Continue filling out each line according to the instructions provided, ensuring accuracy and completeness before finalizing your submission.

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Rental income is taxable in Pennsylvania. Property owners can claim deductions such as mortgage interest, property management fees, and repairs.
Retirement and pension income: Payments from retirement accounts, like 401(k)s and IRAs are fully exempt. Pension income for seniors age 60 or older are also exempt. Investment income: Taxed at 3.07%, including dividends and capital gains​. Social Security income: Exempt from Pennsylvania state taxes​.
Both earned and unearned income are taxable, although the rates differ.
Philadelphia: Landlords face both the Net Profits Tax (NPT) and the Business Income and Receipts Tax (BIRT). The NPT applies to all unincorporated rental businesses, with rates of 3.74% for residents and 3.43% for non-residents. The BIRT is a dual tax: 0.1410% on gross receipts plus 5.71% on net income.
But do renters pay property taxes? Yes and no. Although the burden of property taxes falls on the homeowner, some landlords factor this expense into the monthly rental amounts they charge tenants. Some may charge a little more to pay their building and property expenses while turning a profit.

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Nonresidents are subject to tax on the eight classes of income from PA sources. Generally, PA source income is income derived from activity or property located in PA.

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