In 2025, Pennsylvania introduced a major tax relief measure: the Working Pennsylvanians Tax Credit (WPTC).
Aimed at supporting low- and moderate-income workers, this credit mirrors the federal Earned Income Tax Credit (EITC) but adds an extra state-level benefit. For working families managing rising living costs, the WPTC offers a practical way to reduce tax liabilities or increase refunds.
What Is the Working Pennsylvanians Tax Credit?
The WPTC is a refundable state income tax credit created under the 2025–26 state budget. It provides financial support to working residents by granting a credit equal to 10% of their federal EITC, with a maximum credit of $805.
The program is expected to benefit nearly 940,000 Pennsylvanians, with approximately $193 million allocated in tax relief.
Why It Matters
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Boosts household income: Because it is refundable, even taxpayers who owe little or no state income tax can receive the credit as a refund.
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Simplified eligibility: Linking the credit to the federal EITC streamlines administration and makes qualification straightforward.
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Economic impact: This credit is part of a broader tax-cut agenda, aiming to reduce financial pressure on working families and support economic stability.
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Widespread coverage: Nearly a million residents are projected to benefit, making this one of the most significant state-level tax relief programs in recent years.
Who Qualifies for the Credit
To be eligible for the WPTC, individuals must:
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Be residents of Pennsylvania.
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Have earned income from wages, salary, or self-employment.
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Qualify for the federal EITC, meeting the same criteria regarding income, filing status, and number of dependents.
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File both federal (Form 1040) and Pennsylvania state (PA-40) tax returns.
If you already qualify for the federal EITC, you automatically qualify for the WPTC.
How the Credit Is Calculated
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The WPTC is 10% of your federal EITC, so the amount varies based on income, filing status, and the number of dependents.
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The maximum state credit is $805, typically for filers with three or more qualifying children.
Example scenarios:
| Scenario | Estimated WPTC |
|---|---|
| Single parent with 3 children, earning $23,300 | $805 (max) |
| Single parent with 2 children, earning $50,000 | $154 |
| Married couple with 2 children, earning $30,470 | $715 |
| Married couple with 3 children, earning $60,000 | $183 |
These examples illustrate the range of potential benefits depending on income and family size.
Using the Online WPTC Calculator
Pennsylvania has launched an online calculator to help residents estimate their WPTC:
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Select your filing status (Single or Joint).
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Enter the number of dependents.
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Input your annual earned income.
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The calculator provides an estimate of your likely credit.
It is important to note that the estimate is for guidance only; the final credit amount is determined when filing your tax return.
How to Claim the Credit
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Online Filing: Using Pennsylvania’s online filing system, you can submit your PA-40 along with the federal EITC information.
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Paper Filing: Include a copy of your federal 1040 when filing your PA-40 to verify eligibility.
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The Department of Revenue automatically computes the WPTC, so no separate claim form is required.
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Being refundable, the credit can reduce taxes owed or increase your refund.
Pros and Limitations
Pros:
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Meaningful financial support for working families.
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Easy eligibility through federal EITC alignment.
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Refundable credit accessible even to low-income workers.
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Broad coverage across all counties in Pennsylvania.
Limitations:
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Maximum cap of $805 may limit benefit for higher EITC earners.
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Estimates may differ from actual credit due to changes in income or family situation.
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Requires filing both federal and state tax returns.
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Applies only to the 2025 tax year and onwards.
Policy Context
The WPTC is part of a broader effort by the state to support working families and stimulate the local economy.
It represents a targeted investment in financial security, designed to help workers manage living costs while incentivizing employment and economic participation.
The program has received bipartisan support and reflects a growing focus on reducing poverty through refundable tax credits.
Tips for Maximizing Your Credit
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Accurately estimate your federal EITC, since the WPTC depends on it.
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Take advantage of free tax assistance programs to ensure correct filing.
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File federal and state returns early to secure your credit.
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Retain all relevant tax documents for verification purposes.
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Use the calculator to plan and adjust financial decisions accordingly.
Conclusion
The Working Pennsylvanians Tax Credit provides a substantial opportunity for residents to increase income and ease financial burdens. By leveraging the federal EITC framework, Pennsylvania has created a simple, scalable system that benefits nearly a million working residents.
Accurate filing, careful planning, and awareness of eligibility are key to ensuring you receive the maximum benefit available.
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