To qualify for an Income-based Wage Tax refund, you must pay Philadelphia Wage Tax and meet certain income eligibility requirements based on federal filing status and number of dependents. If you file your Pennsylvania tax return and request for Pennsylvania tax forgiveness through PA 40 Schedule SP and are approved, you may receive a refund for some of the employer-withheld Philadelphia Wage Tax you paid during the year because eligible applicants pay Wage Tax at a lower rate.
Total eligibility income
Your total eligibility income must be below the limits set by the Pennsylvania tax forgiveness program (40 Schedule SP). The full 2021 eligibility income table is located on the Pennsylvania Department of Revenue’s website: www.revenue.pa.gov.
| # dependent children | 0 | 1 | 2 | 3 | 4 | 5 | 6 |
| Unmarried/separated/deceased | $8,750 | $18,250 | $27,750 | $37,250 | $46,750 | $56,250 | $65,750 |
| Married | $15,250 | $24,750 | $34,250 | $43,750 | $53,250 | $62,750 | $72,250 |
Full instructions, along with a schedule of eligible income amounts and rate reductions, are included in the refund petition form. Applicants must use an additional petition if they have more than four W-2’s.
Sometimes tax accountants will help taxpayers complete the petitions as they file for the federal and/or state income tax returns. But if they do not, applicants can apply on their own using the online Wage Tax refund petition. Online submission is recommended as the city processes petitions submitted online faster, and with fewer errors. Applicants may use a paper income-based Wage Tax refund petition if taxpayers prefer.
