Bottom Line
Middle-Class Families: Least Tax-Friendly (Go to the Kiplinger Tax Map for Middle-Class Families)
Retirees: Not Tax-Friendly (Go to the Kiplinger Tax Map for Retirees)
For an East Coast, original 13-colonies state, Pennsylvania's state income tax rates aren't very high at a flat 3.07%. However, most cities and towns in Pennsylvania tack on their own local income tax (school districts, too).
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Like neighboring New Jersey, property taxes in the Keystone State are rather high (although they're not as bad in Pennsylvania as they are in New Jersey). The state's median property tax rate is the 12th-highest in the U.S.
But sales taxes are below average in Pennsylvania. The state's modest 6% sales tax is all that's due, except in Allegheny County (home to Pittsburgh) and Philadelphia. That's certainly some good news for shoppers in most parts of the state.
Pennsylvania Income Taxes
Pennsylvania Income Tax Range
Pennsylvania has a flat rate of 3.07%. Municipalities and school districts can also impose taxes on wages or income.
Pennsylvania Taxation of Social Security Benefits
Social Security benefits are not taxed by the state.
Pennsylvania Tax Breaks for Other Retirement Income
Income from private employer, government, and military retirement plans paid after the taxpayer becomes eligible to retire is exempt.
Railroad Retirement benefits are also exempt.
Pennsylvania Sales Tax
6% state levy. Philadelphia has a local sales tax of an additional 2%, and Allegheny County (Pittsburgh's home county) adds a local sales tax of 1%. The combined average state and local rate is 6.34%, according to the Tax Foundation.
- Groceries: Exempt
- Clothing: Exempt
- Motor Vehicles: Taxable
- Prescription Drugs: Exempt
Pennsylvania Real Property Taxes
In Pennsylvania, the median property tax rate is $1,358 per $100,000 of assessed home value.
Pennsylvania Property Tax Breaks for Retirees
Homeowners and renters 65 or older and widow(er)s 50 or older may be eligible for property tax or rent rebates through the Property Tax/Rent Rebate Program. A maximum standard rebate of $650 is generally available, but supplemental rebates can boost the amount to $975 for homeowners with particularly high tax burdens. To qualify, annual household income must not exceed $35,000 ($15,000 for renters), although 50% of Social Security and Railroad Retirement benefit payments are excluded from eligibility income.
Public school districts can also offer property tax credits to seniors who volunteer in local schools. Credits are only allowed for people 60 years of age or older who (1) have been a Pennsylvania resident for at least 90 days, (2) own real property in the school district, and (3) participate in the school district's volunteer program.
Pennsylvania Motor Fuel Taxes
Gasoline: 58.7¢ per gallon (62.2¢ per gallon effective January 1, 2023).
Diesel: 75.2¢ per gallon (79.6¢ per gallon effective January 1, 2023).
Pennsylvania Sin Taxes
Cigarettes and little cigars: $2.60 per pack (Philadelphia levies an additional $2 local tax per pack of cigarettes)
Other tobacco products: 55 cents per ounce (additional taxes due in Philadelphia)
Vapor products: 40% of wholesale price
Beer: $0.08 per gallon
Wine: No excise tax on in-store sales
Liquor: $7.41 (the liquor tax is an estimate by the Distilled Spirits Council of the United States and published by the Tax Foundation)
Pennsylvania Estate and Inheritance Taxes
Pennsylvania has an inheritance tax, but it doesn't apply to property inherited by the decedent's spouse, parents (if the decedent is age 21 or younger), or child age 21 or younger. There's also no tax on property inherited from a member of the military who died as a result of an injury or illness received while on active duty. The tax is imposed at a 4.5% rate for the decedent's parents (except if the decedent is 21 years old or younger), grandparents, lineal descendants, son-in-law, or daughter-in-law. The rate is 12% for people who inherit property from a sibling and 15% for all other heirs. A 5% discount is allowed if the tax is paid within three months of the decedent's death.
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