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Tax Credits and Programs



Coal Waste Removal and Ultraclean Fuels Tax Credit
 
A tax credit is available for qualifying capital expenditures on facilities producing fuels from coal, culm or silt. The credit can be used against sales and use tax, corporate net income tax and capital stock/foreign franchise tax.

Community-Based Service Credit

Effective July 1, 2013, this program will provide tax credits for contributions made by business firms to non-profit providers of community-based services to individuals with intellectual disabilities or mental illness.

Qualified businesses may apply the credit against the following state taxes:

  • Capital Stock/Foreign Franchise Tax
  • Corporate Net Income Tax
  • Bank Shares Tax
  • Title Insurance & Trust Company Shares Tax
  • Insurance Premiums Tax (excluding surplus lines, unauthorized, domestic/foreign marine)
  • Mutual Thrift Tax
  • Personal Income Tax
  • Gross Receipts Tax

For more information or to apply for a Community-Based Services Tax Credit, visit the Department of Community and Economic Development’s website at www.newpa.com, or call the DCED Customer Service Center at 1-800-379-7448.

Educational Improvement Tax Credit (EITC)
 
This program provides tax credits to eligible businesses contributing to scholarship organizations (including pre-kindergarten scholarship organizations) and educational improvement organizations, in order to promote expanded educational opportunities for students in Pennsylvania. 

Qualified businesses, including pass-through entities, may apply the credit against the following state taxes:

  • Capital Stock/Foreign Franchise Tax
  • Corporate Net Income Tax
  • Bank Shares Tax
  • Title Insurance & Trust Company Shares Tax
  • Insurance Premiums Tax (excluding unauthorized, domestic/foreign marine)
  • Mutual Thrift Tax
  • Personal Income Tax

For more information and to apply for an Educational Improvement Tax Credit, visit the Department of Community and Economic Development’s website at www.newpa.com, or call the DCED Customer Service Center at 1-800-379-7448.
 
For tax questions, please contact the Department of Revenue at 717-772-3896.
 
To make an irrevocable election to pass-through an EITC to partners, members or shareholders, a business should visit the Department of Revenue’s website at www.revenue.state.pa.us and complete Form REV-1123 CT. A separate election must be completed for each year the credit is awarded and not used in whole or in part.

Film Production Tax Credit
 
This tax credit provides an incentive for filmmakers to produce films and television shows in Pennsylvania. 

Qualified businesses, including pass-through entities, and individuals may apply the credit against the following state taxes:

  • Capital Stock/Foreign Franchise Tax
  • Corporate Net Income Tax
  • Personal Income Tax
  • Bank Shares Tax
  • Insurance Premiums Tax (excluding surplus lines, unauthorized, domestic/foreign marine)

For more information, to apply for a Film Production Tax Credit or to sell/assign/pass-through a credit, visit the Department of Community and Economic Development’s website at www.newpa.com, or call the DCED Customer Service Center at 1-800-379-7448.

For tax questions, please contact the Department of Revenue at 717-772-3896.

Special rules apply for taxpayers that sell/assign restricted credits. For specific information regarding these rules, review Tax Bulletin 2011-03 on the Department of Revenue’s website, www.revenue.state.pa.us. 

Keystone Innovation Zone (KIZ) Tax Credit

The KIZ Program creates designated geographic zones to foster innovation and create entrepreneurial opportunities by aligning the combined resources of educational institutions and the private sector.

Qualified businesses, including pass-through entities, and individuals with business activity in a KIZ may claim this credit against the following state taxes:

  • Capital Stock/Foreign Franchise Tax
  • Corporate Net Income Tax
  • Personal Income Tax

For more information, to apply for a Keystone Innovation Zone Tax Credit or to sell/assign/pass-through a credit, visit the Department of Community and Economic Development’s Web site at www.newpa.com, or call the DCED Customer Service Center at 1-800-379-7448.

Special rules apply for taxpayer’s that sell/assign restricted credits. For specific information regarding these rules, review Tax Bulletin 2011-03 on the Department of Revenue’s Web site, www.revenue.state.pa.us

Keystone Special Development Zone (KSDZ)

The Keystone Special Development Zone (KSDZ) is an incentive-based tax credit program to foster the redevelopment of abandoned, deteriorated commercial and industrial sites. Eligible businesses that are established within and/or relocate to a KSDZ have the opportunity to earn restricted tax credits in exchange for job creation within the zone.

Qualified businesses, including pass-thorugh entities, and individuals with business activity in a KSDZ may claim this credit against the following state taxes:

  • Corporate Net Income Tax
  • Capital Stock/Foreign Franchise Tax
  • Personal Income Tax
  • Title Insurance Tax
  • Bank Shares Tax
  • Mutual Thrift Taxes 

For more information to apply for a Keystone Special Development Zone (KSDZ) or to sell/assign/pass-through a credit, visit the Department of Community and Economic Development’s Web site at www.newpa.com, or call the DCED Customer Service Center at 1-800-379-7448.

Historic Preservation Tax Credit

Effective July 2, 2013, this program will provide tax credits for qualified taxpayers to rehabilitate a qualified historic structure that is approved by the PA Historical & Museum Commission.

Qualified taxpayers may apply the credit against the following state taxes:

  • Capital Stock/Foreign Franchise Tax
  • Corporate Net Income Tax
  • Bank Shares Tax
  • Title Insurance & Trust Company Shares Tax
  • Insurance Premiums Tax (excluding surplus lines, unauthorized, domestic/foreign marine)
  • Mutual Thrift Tax
  • Personal Income Tax
  • Gross Receipts Tax

For more information, to apply for a Historic Preservation Tax Credit or to sell/assign/pass-through a credit, visit the Department of Community and Economic Development’s website at www.newpa.com, or call the DCED Customer Service Center at 1-800-379-7448.

For tax questions, please contact the Department of Revenue at 717-772-3896.

Job Creation Tax Credit (JCTC)
 
The Job Creation Tax Credit is a $1,000-per-job tax credit to approved businesses that agree to create jobs within three years in Pennsylvania. Beginning July 2, 2013, the tax credit amount increases from $1,000 to $2,500 per job for employers who create a new job that is filled by an unemployed individual. 
 
Qualified businesses, including pass-through entities, and individuals may claim this credit against the following state taxes:

  • Capital Stock/Foreign Franchise Tax
  • Corporate Net Income Tax
  • Mutual Thrift Institutions Tax
  • Bank Shares Tax
  • Insurance Premiums Tax
  • Gross Receipts Tax
  • Title Insurance & Trust Company Shares Tax
  • Personal Income Tax

For more information and to apply for a Job Creation Tax Credit, visit the Department of Community and Economic Development’s website at www.newpa.com, or call the DCED Customer Service Center at 1-800-379-7448.

For tax questions, please contact the Department of Revenue at 717-772-3896. 

Neighborhood Assistance Program
 
This program encourages taxpayers to contribute to neighborhood organizations and charitable food programs and engage in activities that promote community economic development in impoverished areas. 

Qualified businesses, including pass-through entities, and individuals may apply the credit against the following state taxes:

  • Capital Stock/Foreign Franchise Tax
  • Corporate Net Income Tax
  • Bank Shares Tax
  • Title Insurance & Trust Company Shares Tax
  • Insurance Premiums Tax
  • Mutual Thrift Institutions Tax
  • Excise Tax on Foreign Corporations
  • Personal Income Tax

For more information, to apply for a Neighborhood Assistance Program Tax Credit or to sell/assign/pass-through a credit, visit the Department of Community and Economic Development’s website at www.newpa.com, or call the DCED Customer Service Center at 1-800-379-7448.

Special rules apply for taxpayers that sell/assign restricted credits. For specific information regarding these rules, review Tax Bulletin 2011-03 on the Department of Revenue’s website, www.revenue.state.pa.us or call 717-772-3896.

Opportunity Scholarship Tax Credit 

The Opportunity Scholarship Tax Credit Program will allow businesses to contribute to IRC 501C opportunity scholarship organizations approved by the Department of Community and Economic Development. Opportunity Scholarship Organizations can provide scholarships to eligible students living within the boundary of the lowest-achieving 15 percent of elementary and lowest-achieving 15 percent of secondary schools as published by the Department of Education.

The program will give low- and moderate-income students in low-achieving schools the option to obtain a scholarship to attend a participating public or nonpublic school.

Qualified businesses, including pass-through entities, may apply the credit against the following state taxes:

  • Capital Stock/Foreign Franchise Tax
  • Corporate Net Income Tax
  • Bank Shares Tax
  • Title Insurance & Trust Company Shares Tax
  • Insurance Premiums Tax (excluding surplus lines, unauthorized, domestic/foreign marine)
  • Mutual Thrift Tax
  • Personal Income Tax
  • Gross Receipts Tax

For more information, to apply for an Opportunity Scholarship Tax Credit, visit the Department of Community and Economic Development’s website at www.newpa.com/ostc  , or call the DCED Customer Service Center at 1-800-379-7448. 

For tax questions, please contact the Department of Revenue at 717-772-3896.

Organ and Bone Marrow Donor Tax Credit
 
This tax credit expired Dec. 31, 2010. Although no new tax credits are being issued, carry forward of unused tax credits is allowed for three taxable years until 2013.

Qualified businesses, including pass-through entities, may apply the credit against the following state taxes:

  • Capital Stock/Foreign Franchise Tax
  • Corporate Net Income Tax
  • Bank Shares Tax
  • Title Insurance & Trust Company Shares Tax
  • Insurance Premiums Tax (excluding surplus lines, unauthorized, domestic/foreign marine)
  • Mutual Thrift Institutions Tax
  • Personal Income Tax

For more information, visit the Department of Revenue Web site at www.revenue.state.pa.us.

Pennsylvania Resource Manufacturing Tax Credit (PRM)

Beginning in 2017, any manufacturer purchasing natural gas containing ethane as a petrochemical feedstock at a facility within the Commonwealth could be eligible for a PRM Tax Credit equal to five cents per gallon ($2.10 per barrel) of ethane purchased and used in manufacturing ethylene, so long as the company makes a capital investment of at least $1 billion and creates the equivalent of at least 2,500 full-time jobs while constructing the manufacturing facility.  Effective for ethane purchased between Jan. 1, 2017 and Dec. 31, 2042.

This program provides a powerful incentive that will revitalize Pennsylvania’s manufacturing industry, create thousands of good-paying Pennsylvania jobs and secure long-term economic benefits for Pennsylvania residents and communities. 
                                                                                                                                                                                                                                   
For more information and to apply for the Pennsylvania Resource Manufacturing Tax Credit, contact the Department of Revenue’s Economic Development Coordinator at 717-772-3896.

Research & Development (R&D) Tax Credit
 
This tax credit is available to businesses and individuals performing qualified research in Pennsylvania, to encourage businesses in the commonwealth to conduct research, especially research of a technological or scientific nature.

Qualified businesses, including pass-through entities, and individuals may apply the credit against the following state taxes:

  • Capital Stock/Foreign Franchise Tax
  • Corporate Net Income Tax
  • Personal Income Tax

For more information, visit Revenue’s Online Customer Service Center at www.revenue.state.pa.us.  To apply for a Research and Development Tax Credit, complete form REV-545 and submit it to the Bureau of Corporation Taxes.
 
To sell/assign/pass-through an R&D tax credit, visit the Department of Community and Economic Development’s website at www.newpa.com, or call the DCED Customer Service Center at 1-800-379-7448.

Special rules apply for taxpayers that sell/assign restricted credits. For specific information regarding these rules, review Tax Bulletin 2011-03 on the Department of Revenue’s website, www.revenue.state.pa.us.

For tax questions, please contact the Department of Revenue at 717-772-3896.

Resource Enhancement and Protection (REAP) Tax Credit
 
This program provides a tax credit to farmers and businesses that invest in the implementation of best management practices in agricultural operations to enhance farm production and protect natural resources. 

Qualified businesses, including pass-through entities, and individuals may apply the credit against the following state taxes:

  • Capital Stock/Foreign Franchise Tax
  • Corporate Net Income Tax
  • Bank Shares Tax
  • Title Insurance & Trust Company Shares Tax
  • Insurance Premiums Tax
  • Mutual Thrift Institutions Tax
  • Personal Income Tax

For more information, to apply for a Resource Enhancement and Protection Tax Credit or to sell/assign/pass-through a credit, visit the Department of Agriculture’s Web site at www.agriculture.state.pa.us, or call 717-787-8821. 

Special rules apply for taxpayer’s that sell/assign restricted credits. For specific information regarding these rules, review Tax Bulletin 2011-03 on the Department of Revenue’s Web site, www.revenue.state.pa.us

Enterprise Zone (EZ) Program
 
This program broadened the scope of the Neighborhood Assistance Program, promoting job growth and helping municipalities take advantage of business expansion opportunities.

Qualified businesses may apply the credit against the following state taxes:

  • Capital Stock/Foreign Franchise Tax
  • Corporate Net Income Tax
  • Mutual Thrifts Institutions Tax
  • Insurance Bank Shares Tax
  • Insurance Premiums Tax

For more information, to apply for an Enterprise Zone Program Tax Credit or to sell/assign a credit, visit the Department of Community and Economic Development’s Web site at www.newpa.com, or call the DCED Customer Service Center at 1-800-379-7448.

Strategic Development Area (SDA) Program
 

This program provides tax benefits to eligible businesses whose business activities contribute to economic development and foster growth in designated areas.

Qualified businesses, including pass-through entities, may apply the tax benefit against the following state taxes:

  • Capital Stock/Foreign Franchise Tax
  • Corporate Net Income Tax
  • Personal Income Tax
  • Insurance Premiums Tax
  • Gross Receipts Tax
  • Bank Shares Tax
  • Mutual Thrift Institutions Tax
  • Title Insurance & Trust Company Shares Tax

For more information and to apply for the Strategic Development Area Program, visit the Department of Community and Economic Development’s Web site at www.newpa.com, or call the DCED Customer Service Center at 1-800-379-7448.