Pennsylvania Tweaks Tax Provision of Irrevocable Grantor Trusts

Grantors of irrevocable trusts in Pennsylvania can retain their obligation to pay state income tax on the trust’s income, after Gov. Josh Shapiro (D) signed a bill late Thursday authorizing the tax code change.

Pennsylvania was the only state not offering grantors, or trust creators, that option, which prompted some people to establish their trusts in other states, according to a memo from the sponsor of S.B. 815, state Sen. Lisa Baker (R). “There is no good reason to sustain a system that makes Pennsylvania noncompetitive,” she wrote.

• The measure, which applies to tax years starting on or ...