Tax Year 2026Updated July 19, 2026

Pennsylvania Income Tax Rate 2026

Q: What is Pennsylvania's income tax rate?

Pennsylvania has a flat income tax rate of 3.07% on all taxable income. Unlike most states, PA does not have graduated brackets; all income is taxed at the same rate regardless of amount. PA also has no standard deduction or personal exemption in its state tax system.

Q: What is the sales tax rate in Pennsylvania?

The state sales tax rate is 6.00% . Philadelphia adds 2% (total 8%) and Allegheny County adds 1% (total 7%). The statewide combined average is approximately 6.34% . Most grocery food items are exempt from PA sales tax.

Q: Does Pennsylvania conform to the OBBBA overtime and tips deductions?

Pennsylvania's income tax is structurally independent from the federal tax code. PA does not use federal AGI or federal deductions; the state taxes eight specific classes of income under its own rules. The federal OBBBA deductions for tips and overtime do not reduce your PA taxable compensation. These deductions still reduce your federal taxable income.

Q: Does Pennsylvania tax retirement income?

No (for eligible retirees). Pennsylvania does not tax retirement income for those who have reached retirement age. Social Security benefits, pensions, 401(k) distributions, and IRA withdrawals are exempt for eligible retirees.

Pennsylvania uses a flat income tax rate of 3.07% on all taxable income, one of the lowest flat rates in the nation. Unlike most states, PA does not use graduated brackets, a standard deduction, or personal exemptions. The state taxes eight specific classes of income under its own rules, independent of the federal tax code. The state sales tax rate is 6.00%.Use the calculators below to estimate your Pennsylvania tax liability for 2026.

Income Tax

Flat 3.07%

Sales Tax

State rate 6.00%

Capital Gains

Flat 3.07%

Supplemental Rate

3.07%

Pennsylvania Income Tax 2026

Pennsylvania levies a flat 3.07% income tax on all taxable income. There are no graduated brackets; all filers pay the same rate regardless of income level. PA has no standard deduction or personal exemption in its state system. The state taxes eight specific classes of income (compensation, interest, dividends, net profits, net gains, rents/royalties, estate/trust income, gambling/lottery) independently.

Pennsylvania Sales Tax

Pennsylvania's state sales tax rate is 6.00%. Philadelphia adds 2% (total 8%) and Allegheny County adds 1% (total 7%). The statewide combined average is approximately 6.34%.Most grocery food items are exempt from Pennsylvania sales tax.

OBBBA Conformity - Does Pennsylvania Follow Federal Deductions?

The One Big Beautiful Bill Act (OBBBA) introduced several new federal tax deductions. Pennsylvania's income tax is structurally independent from the federal tax code; PA does not use federal AGI or federal deductions. The state taxes specific classes of income under its own rules.

Tips Deduction: PA PIT does not use federal AGI or federal deductions; the federal tips deduction does not reduce PA taxable compensation. PA taxes eight specific classes of income independently; there is no mechanism to apply a federal above-the-line deduction.
Overtime Deduction: PA PIT does not use federal AGI or federal deductions; the federal overtime deduction does not reduce PA taxable compensation. PA taxes compensation as a class of income at the flat 3.07% rate with no federal-style deductions.
Senior Bonus Deduction: PA PIT does not use federal AGI or federal deductions; the federal senior bonus deduction does not reduce PA taxable income. PA already exempts most retirement income for eligible retirees under its own rules.

The federal OBBBA deductions still reduce your federal taxable income. Use our paycheck calculator to see the combined effect on both your federal and Pennsylvania returns.

Pennsylvania Retirement Tax

Pennsylvania does not tax retirement income for those who have reached retirement age. Social Security benefits, pensions, 401(k) distributions, and IRA withdrawals are exempt for eligible retirees. This makes PA one of the more retirement-friendly states.

Pennsylvania Tax Calculators

Pennsylvania Paycheck Calculator Pennsylvania Tips Tax Pennsylvania Overtime Tax

Frequently Asked Questions

Does Pennsylvania have a state income tax?

Yes. Pennsylvania imposes a flat state income tax rate of 3.07% on taxable income for TY2026.

What is Pennsylvania's income tax rate?

Pennsylvania has a flat income tax rate of 3.07% on all taxable income. Unlike most states, PA does not have graduated brackets; all income is taxed at the same rate regardless of amount. PA also has no standard deduction or personal exemption in its state tax system.

What is the sales tax rate in Pennsylvania?

The state sales tax rate is 6.00%. Philadelphia adds 2% (total 8%) and Allegheny County adds 1% (total 7%). The statewide combined average is approximately 6.34%. Most grocery food items are exempt from PA sales tax.

Does Pennsylvania conform to the OBBBA overtime and tips deductions?

Pennsylvania's income tax is structurally independent from the federal tax code. PA does not use federal AGI or federal deductions; the state taxes eight specific classes of income under its own rules. The federal OBBBA deductions for tips and overtime do not reduce your PA taxable compensation. These deductions still reduce your federal taxable income.

Does Pennsylvania tax retirement income?

No (for eligible retirees). Pennsylvania does not tax retirement income for those who have reached retirement age. Social Security benefits, pensions, 401(k) distributions, and IRA withdrawals are exempt for eligible retirees.

What local taxes apply in Pennsylvania?

Many PA municipalities impose an earned income tax (typically 1–2%). Philadelphia has a city wage tax of 3.75% for residents and 3.44% for non-residents. Some school districts levy additional income tax. These local taxes are in addition to the 3.07% state rate.