Pennsylvania’s Working Pennsylvanians Tax Credit Has Delivered Nearly $217 Million

Pennsylvania has delivered $216.7 million through its new Working Pennsylvanians Tax Credit, reaching more than 876,000 residents during the 2026 filing season for 2025 tax returns.

The Pennsylvania Department of Revenue reported July 20 that roughly 64,000 additional taxpayers could still benefit as remaining 2025 returns are filed and processed, including returns from taxpayers who requested extensions. The department estimates the program could reach as many as 940,000 Pennsylvanians and distribute approximately $220 million by the end of 2026.

That projected total has not been reached. The $216.7 million figure reflects payments already distributed, while the additional recipients and dollars remain estimates tied to returns still being processed.

How the credit works

The Working Pennsylvanians Tax Credit is a refundable state credit modeled on the federal Earned Income Tax Credit, or EITC. Under Pennsylvania Act 45 of 2025, the state credit equals 10% of the federal EITC received for the same taxable year. The maximum state credit is $805.

Because the credit is refundable, an eligible taxpayer can receive the credit even if the amount exceeds the taxpayer’s Pennsylvania income-tax liability. It can reduce the amount owed or increase a refund.

Act 45 applies the credit to taxable years beginning after December 31, 2024, making the 2025 tax year the first one covered by the program.

Who may qualify

According to the Revenue Department’s eligibility guidance, a taxpayer may qualify if the person has earned income in Pennsylvania, qualifies for the federal EITC and files both a federal Form 1040 and a Pennsylvania PA-40 state income-tax return.

Eligibility is tied to the federal credit. The program is not a universal payment, and residents should not assume they qualify based only on income or employment. The federal EITC has its own income, filing-status and dependent rules.

The amount of the Pennsylvania credit follows the federal EITC amount. The Revenue Department says the calculation uses the same basic structure as the federal credit, including filing status, income and the number of dependents.

Why some payments are still pending

The July 20 distribution update said the state was continuing to process 2025 tax returns, including returns from taxpayers who requested extensions. Those filings may add to the number of recipients and the total dollars distributed later in 2026.

Residents who filed late, filed by mail or used an extension may need to wait for the Pennsylvania return to be reviewed before the credit appears in their refund information. The department’s estimate of up to 940,000 recipients reflects ongoing processing rather than completed payments.

Taxpayers should distinguish between a federal filing and a Pennsylvania filing. Filing a federal return alone is not enough to receive the state credit. A PA-40 must also be filed, and the Revenue Department must have the federal EITC information needed to determine the credit.

What taxpayers should check

For residents who filed online, the Revenue Department generally calculates the credit automatically when it has the required federal and state filing information. The credit is then applied to reduce Pennsylvania tax or increase the refund.

People who filed their federal return through a different service may need to enter the federal EITC amount and upload a copy of Form 1040 with the Pennsylvania filing. Paper filers are instructed to include a copy of the federal Form 1040 with the PA-40 so the department can verify eligibility.

Married taxpayers who filed a joint federal return but determine their Pennsylvania taxes separately should review the state’s guidance. Under Act 45, when both spouses are eligible, the credit may be used only by the spouse with the greater tax otherwise due, calculated before the credit.

Residents checking on a possible payment should review their federal EITC claim, confirm that a Pennsylvania PA-40 was filed and check their state refund records. The Revenue Department also provides an online calculator and taxpayer assistance through its online service center, district offices and telephone support.

A statewide program created by law

The Working Pennsylvanians Tax Credit applies statewide because it was created in Pennsylvania law, not through a county or local program. The state’s 2026-27 budget signing release also cited the $216.7 million already provided to more than 876,000 working Pennsylvanians.

For now, the confirmed result is $216.7 million distributed during the 2026 filing season. The approximately $220 million total and as many as 940,000 recipients are year-end projections that could increase as remaining 2025 returns, including extension filings, are processed.

Sources

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