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Philadelphia, Pennsylvania reduces wage and net profits tax — PENNSYLVANIA — Withholding and Reporting
A Philadelphia ordinance amends the city’s wage and net profits tax by decreasing rates for residents and nonresidents. Specifically, for residents the tax on salaries, wages, commissions and other compensation is decreased from 3.9004% to 3.8907% beginning July 1, 2017. For nonresidents, the tax is reduced from 3.4741% to 3.4654%. Further, for residents the tax on net profits earned in businesses, professions or other activities is reduced from 3.9004% to 3.8907% for January 1, 2017 and thereafter. For nonresidents, the tax is reduced from 3.4741% to 3.4654%.
The wage and net profits tax is imposed on Philadelphia residents in addition to the 1.5% Pennsylvania Intergovernmental Cooperation Authority tax, which is included in the resident rates above. (Philadelphia Bill No. 170198, Philadelphia City Council, effective June 14, 2017.)