SB396

Pennsylvania SB396 amends the Tax Reform Code of 1971 to redefine pass-through entities and alter tax responsibilities.

Pennsylvania SB396 amends the Tax Reform Code of 1971 to redefine pass-through entities, which now include partnerships and Pennsylvania S corporations. The bill introduces an elective tax at the pass-through entity level, allowing these entities to pay the tax on behalf of their owners. Owners, both resident and nonresident, can claim a credit for the tax paid by the entity on their individual tax returns. The bill also specifies that only one election can be made per taxable year and that it is irrevocable. The amendments apply to taxable years beginning after December 31, 2020.