Pennsylvania HB 1610: An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in personal income tax, further providing for definitions and for income taxes imposed by other states and providing for provisions for overtime pay; in corporate net income tax, further providing for definitions, for determination of net loss deduction, for imposition of tax, for reports and payment of tax, for timely mailing treated as timely filing and payment and for additional withholding requirements, repealing provisions relating to consolidated reports, further providing for extension of time to file reports, for changes made by Federal Government, for limitations on assessments, for definitions, for manufacturing innovation and reinvestment deduction, for enforcement, rules and regulations, inquisitorial powers of the department, for retention of records and for penalties; in tax credit and tax benefit administration, further providing for definitions and providing for application of tax credits or tax benefits to a unitary business; providing for working Pennsylvanians tax credit; and, in general provisions, further providing for estimated tax, for underpayment of estimated tax and for restatement of tax liability under treaties.

Bill Text

PRIOR PRINTER'S NO. 1914 PRINTER'S NO. 2012
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1610
Session of
2025
INTRODUCED BY FIEDLER, DALEY, SAMUELSON, KRAJEWSKI, SCOTT,
DELLOSO, N. NELSON, SANCHEZ, PROBST, HANBIDGE, PIELLI, GIRAL,
KHAN, NEILSON, CIRESI, HOHENSTEIN, SHUSTERMAN, FREEMAN,
DONAHUE, HILL-EVANS, OTTEN, CERRATO, GREEN, WAXMAN, T. DAVIS
AND WEBSTER, JUNE 12, 2025
AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES,
JUNE 24, 2025
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," in corporate net income tax, further providing
for definitions, for determination of net loss deduction, for
imposition of tax, for reports and payment of tax, for timely
mailing treated as timely filing and payment and for
additional withholding requirements, repealing provisions
relating to consolidated reports, further providing for
extension of time to file reports, for changes made by
Federal Government, for limitations on assessments, for
definitions, for manufacturing innovation and reinvestment
deduction, for enforcement, rules and regulations,
inquisitorial powers of the department, for retention of
records and for penalties; in tax credit and tax benefit
administration, providing for application of tax credits or
tax benefits to a unitary business; and, in general
provisions, further providing for estimated tax, for
underpayment of estimated tax and for restatement of tax
liability under treaties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
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Section 1. Section 401(3)1(a) and (b), (3)2(a)(17)(E) and
(5) of the act of March 4, 1971 (P.L.6, No.2), known as the Tax
Reform Code of 1971, are amended, (3)1 is amended by adding a
phrase, (3)1(t) is amended by adding a paragraph, (3)2(a)(1) is
amended by adding a subparagraph, (3)2(a)(9)(A) is amended by
adding a unit, (3)4 is amended by adding phrases and the section
is amended by adding clauses to read:
Section 401. Definitions.--The following words, terms, and
phrases, when used in this article, shall have the meaning
ascribed to them in this section, except where the context
clearly indicates a different meaning:
* * *
(3) "Taxable income." 1. (a) In case the entire business
of the corporation is transacted within this Commonwealth, for
any taxable year which begins on or after January 1, 1971,
taxable income for the calendar year or fiscal year as returned
to and ascertained by the Federal Government before special
deductions provided for in 26 U.S.C. Ch. 1 Subch. B Pt. VIII
(relating to special deductions for corporations), not including
the deductions provided for in 26 U.S.C. § 243 (relating to
dividends received by corporations), or in the case of a
corporation participating in the filing of consolidated returns
to the Federal Government or that is not required to file a
return with the Federal Government, the taxable income which
would have been returned to and ascertained by the Federal
Government before special deductions provided for in 26 U.S.C.
Ch. 1 Subch. B Pt. VIII, not including the deductions provided
for in 26 U.S.C. § 243, if separate returns had been made to the
Federal Government for the current and prior taxable years,
subject, however, to any correction thereof, for fraud, evasion,
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or error as finally ascertained by the Federal Government.
(b) Additional deductions shall be allowed from taxable
income on account of any dividends received from any other
corporation but only to the extent that such dividends are
included in taxable income as returned to and ascertained by the
Federal Government. For tax years beginning on or after January
1, 1991, additional deductions shall only be allowed for amounts
included, under [section 78 of the Internal Revenue Code of 1986
(Public Law 99-514, 26 U.S.C. § 78)] 26 U.S.C. § 78 (relating to
gross up for deemed paid foreign tax credit), in taxable income
returned to and ascertained by the Federal Government and for
the amount of any dividends received from a foreign corporation
included in taxable income to the extent such dividends would be
deductible in arriving at Federal taxable income if received
from a domestic corporation. For taxable years beginning after
December 31, 2025, the additional deduction with respect to
dividends shall not be allowed for dividends between members of
a unitary busin