Pennsylvania passed its budget for the 2022 – 23 fiscal year on July 8, 2022. While the main purpose of the annual budget is to allow the state to continue to pay its bills, it is also the primary source of tax law changes in Pennsylvania. The recently passed budget brings a long-sought reduction to the Corporate Net Tax Income Tax (CNIT)
Reducing Pennsylvania’s 9.99% Corporate Net Tax Income Tax (CNIT) has been a matter of concern among policymakers for the past decade. The recently passed budget includes a reduction of the corporate tax rate to 8.99% for the 2023 tax year. This rate will continue to drop by half a percent each year until it reaches 4.99% in 2031.
For an in-depth analysis of the recent CNIT cut and what it means for the future of corporations in the commonwealth, click here.
Additionally, the new budget increases the amount of fixed assets that individuals can immediately expense from $25,000 per year to $1,080,000, which matches the federal limit for 2022. The federal expense amount is adjusted annually for inflation.
Please reach out to your RBF tax professional with any questions regarding these or any other recent PA state tax legislation changes. We are always happy to help!