On November 12, 2025 the Pennsylvania governor signed the state's 2025-2026 budget into law. This budget includes the Working Pennsylvanians Tax Credit (WPTC), a new refundable credit modeled after federal EIC. If the taxpayer qualifies, they can receive 10% of the federal EIC included on their 2025 tax return.
Qualifying for the WPTC
The WPTC has three qualifications:
- Have earned income in Pennsylvania.
- File a federal tax return and a Pennsylvania tax return.
- Qualify for federal EIC.
The WPTC in tax year 2025
Due to the legislation's passage being late in the year, the WPTC will not be added to the 2025 tax year Form PA-40. The state will calculate and remit the WPTC for tax year 2025, and the state anticipates no processing delays due to the WPTC calculation. The WPTC will be included on Form PA-40 in 2026 and subsequent years.
The following points apply to tax year 2025 only:
- For a taxpayer receiving a refund, the state will calculate the WPTC and add it to their refund.
- A taxpayer with a balance due should pay the balance due as calculated in the return that was filed. The DOR will calculate and pay the WPTC separately.
- For a taxpayer who has neither a refund nor balance due, the DOR will calculate and pay the WPTC.
- If the taxpayer qualifies for the WPTC, at the time the DOR processes a taxpayer's return, if they qualify for the WPTC the DOR will send the taxpayer a letter notifying them of the WPTC.
Additional Information: