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.

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.