Philadelphia to Reduce Wage Tax Rates for Low-Income Employees

Philadelphia is to reduce city wage tax rates for low-income employees starting July 1 under an ordinance that took effect March 12 without Mayor Jim Kenney’s (D) signature.

The ordinance (No. 200016) reduces wage tax rates to zero for low-income residents, meaning those employees have an effective tax rate of 1.5% when combined with the Pennsylvania Intergovernmental Cooperation Authority (PICA) tax on residents, and to 1.5% for low-income nonresidents, effective July 1. The ordinance maintains for the first half of 2020 the system of reducing the standard wage tax rates by 0.5 percentage points for low-income employees.

The ...