HB1703

HB1703 amends Pennsylvania's personal income tax to introduce an elective tax at the pass-through entity level for partnerships and S corporations.

HB1703 amends Pennsylvania's personal income tax code to introduce an elective tax at the pass-through entity level for partnerships and S corporations. Pass-through entities can elect to pay the tax on their income, with the tax applied to the share of each owner. Owners can claim a credit for the tax paid by the entity on their individual tax returns. The bill also modifies the taxability of partners and S corporation shareholders, ensuring they are subject to tax on their share of the entity's income. The provisions apply to taxable years beginning after December 31, 2025.