Do you qualify for Philly's income-based Wage Tax refund

Did you know you can get a Wage Tax refund if your income is below a certain threshold? Here's what you need to know if you're a Philadelphia resident or employee with Philadelphia's Wage Tax withheld from your paycheck:

Who's eligible for an income-based Wage Tax refund?

You can find out in two ways:

1. Review the State's income and household size eligibility tables to see if you qualify.
2. Find out more about Philadelphia's income-based Wage Tax refunds on our website.

How does the income-based refund program work?

It provides qualifying taxpayers with a lower Wage Tax rate and a refund of taxes paid over the fixed rate. Philadelphia's 2025 Wage Tax rate is 3.74% for residents and 3.43% for nonresidents. But if you apply for an income-based refund, submit the required paperwork, and get approved, the City considers you to only be subject to a 1.5% rate. That way, you get back all the money you paid over 1.5%.

Residents and nonresidents can benefit from this relief. However, you must first file and be approved for Pennsylvania tax forgiveness.

What do I need to apply?

You'll need to fill out an income-based refund petition. With it, you must submit:

• A copy of your W-2, showing Philadelphia local wages withheld and Medicare withholding,
• A copy of your PA-40 Personal Income Tax Return, and
• A copy of your Special Tax Forgiveness form, PA Schedule SP.

You must file the State forms with the Commonwealth first, then attach copies with your refund petition. We can't process your petition without these forms. Similar documents apply if you reside outside of Pennsylvania.

Where can I apply?

You can fill out a petition online. It's the easiest, quickest, and most secure way to request a refund. You don't need a username and password to access the form:

• Just go to tax-services.phila.gov,
• Find the "Refunds" panel on the homepage,
• Select "Request Employee Wage Tax Refund" and follow the on-screen instructions.

Who else qualifies for a Wage Tax refund?

Wage Tax refunds aren't available to everyone. Other reasons a taxpayer may get a refund include:

• A non-resident who works outside Philly

If a Philadelphia employer requires their non-resident employee to work outside the city, the employee may qualify for a refund. Taxpayers must provide their W-2s showing local wages; a schedule showing when and where they work outside Philadelphia using this template; and this employer certification letter without alteration. Your supervisor or HR person must sign the letter, and it must be on company letterhead.

• A resident employee who pays taxes to another city

Wage Tax refunds are available to Philadelphia residents who pay income taxes to other municipalities. Visit our website to learn more about this type of refund.

• Business expenses you can deduct

A Philly resident can deduct expenses directly related to and incurred while performing their job. For example, you can get a refund for unreimbursed business travel and lodging expenses. You must first file the PA Schedule UE with the Commonwealth. Then, attach this form to your Philly petition.

Please note: The best way to request a Philly refund is to submit a petition online. It ensures fewer errors and faster processing.

Here are more refund resources:

• Don't wait for your refund, get it faster with direct deposit!
• No need to call; get refund updates on the go!
• Skip the payment hassle and get your taxes done for free!