![]() ![]() For starters, unlike many other states that collect an income tax, Pennsylvania has no standard deduction or exemption. That does not mean that taxpayers in Pennsylvania have lower tax bills, however. This means that every taxpayer in the state, regardless of their level of income, pays the same percentage of their taxable income in state income taxes. Pennsylvania utilizes a “flat tax” system. If you’re ready to find an advisor who can help you achieve your financial goals, get started now. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. However, in many larger cities, including Pittsburgh and Philadelphia, you'll encounter higher rates.Ī financial advisor can help you understand how taxes fit into your overall financial goals. In smaller municipalities, this tax is capped by state law at 2%. Many cities in Pennsylvania collect a Local Earned Income Tax which is typically 1%, but can be as high as almost 3.9%. In addition to these two state taxes, Pennsylvania residents will also face local taxes on real estate, sales and income. Pennsylvania receives tax revenue from two primary sources: a statewide income tax of 3.07% and a statewide sales tax of 6%. ![]() Property tax: 1.36% average effective rate. ![]()
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