Pennsylvania Lawmakers Pass Trust Bill, Delay Broader Tax Measure

Pennsylvania lawmakers on Thursday sent Gov. Josh Shapiro (D) a bill that, if enacted, would allow grantors of irrevocable trusts to maintain their legal obligation to pay state income tax on the trust’s earnings.

The measure (SB 815), introduced by state Sen. Lisa Baker (R)—which received overwhelming support in both chambers—would incorporate federal grantor trust provisions into Pennsylvania’s tax code. In a sponsorship memo, Baker wrote Pennsylvania is the only state that doesn’t provide grantors, or creators of trusts, that option.

An irrevocable trust is an arrangement in which the person establishing the trust forfeits their ...