Pennsylvania’s Governor announced a New Tax Credit under the state’s 2025-26 budget to support the working class in the state who are not earning that much. If you are a Pennsylvania resident, you can learn about this seventh tax cut and see how you can save more money.
The state estimates that the Working Pennsylvanians Tax Credit (WPTC) will support 1 million residents, and it will deliver $193 million in tax relief to them. For 54 years, the state government has not addressed poverty in the tax system until this year, and has not supported families.
The legislation for the new tax credit was passed last week, as it is supported by all the lawmakers and advocates. The residents will receive the highest WPTC up to $805 for three or more children.
Who will receive the New Tax Credit in Pennsylvania?
If you are wondering what makes you eligible for the New Tax Credit in Pennsylvania, here you can check the eligibility requirements:
- The new tax credit of Pennsylvania is modeled after the Earned Income Tax Credit, and it is 10% of the federal credit, so if you wish to qualify for the new tax credit, you must qualify for the EITC.
- You must meet the income threshold based on the family size to qualify for the credit. The income threshold for the new tax credit is the same as the EITC for the 2025 tax year:
| Number of Children | Single, head of household, married but filing separately | Married filing jointly |
| 0 | $19,104 | $26,214 |
| 01 | $50,434 | $57,554 |
| 02 | $57,310 | $64,430 |
| 03 or more | $61,555 | $68,675 |
How much will you receive under the New Tax Credit?
The residents who qualify for the new tax credit will receive it based on the number of dependent children, just like EITC. Here, you can check the maximum Pennsylvania tax credit depending on the number of dependent children with the federal EITC credit:
| Number of Children | Pennsylvania Tax Credit | Federal Tax Credit (EITC) |
| 01 | $65 | $649 |
| 01 | $433 | $4,328 |
| 02 | $715 | $7,152 |
| 03 or more | $805 | $8,046 |
The tax credit payout will depend on your earnings as well as your filing status, hence it may change, for instance:
- As a single parent with two children and earning $50,000 a year, you can receive the $154 credit.
- As a single parent with three children and an annual income of $23,300 a year, you will receive a credit of $154.
- Single parent with three children with annual earnings of $45,000, you can receive credit up to $349.
- A married couple with two children, annual earnings of $30,470, can receive credit up to $715.
- A married couple filing a tax return jointly, with annual earnings of $60,000, the credit will be up to $183.
How will you receive the Pennsylvania New Tax Credit?
Now, if you are wondering how you can claim or ensure that you received the credit, you should take the following actions:
- Residents who qualify for the federal EITC credit and claim it on their tax return for the 2025 tax year will automatically qualify for the state’s new tax credit.
- You should file the state (Personal Income Tax Return PA-40), and the Department of Revenue will automatically determine your credit based on your federal EITC claim.
When will the residents receive the WPTC?
The Working Pennsylvania Tax Credit will be effective for the 2025 tax year. The refundable tax credit timeline of distribution depends on when you file your taxes in the 2026 tax season and claim your EITC. The federal 2026 tax season began in January last week.
When you file your state tax return, the filing will determine when you will receive your state tax credit with your tax return. You should file the federal return early and then the state return to receive the tax refund with a refundable credit.
The state estimates that 940,000 families in Pennsylvania will benefit from the new tax credit; hence, if you are eligible, do not forget to file your federal and state tax returns correctly. The new tax credit will support families and reduce child poverty.
Disclaimer: The new Pennsylvania tax credit approval is for informational purposes only. Eligibility, amounts, and application details are determined by official state authorities.