Legislation: Senate Bill 253 (Sen. Mastriano); House Bill 1471 (Rep. Sanchez); House Bill 1610 (Rep. Fiedler)

Issue: Corrects inequities in the taxation of resident partners in multistate partnerships.

Status: We’ve made strong progress in advancing this issue. Last June, the state House approved House Bill 1610, an omnibus tax bill. One of the provisions in HB 1610 included PICPA's resident partner credit fix. Senate Bill 253 was reported out of the Senate Finance Committee on April 1, 2025, and it awaits consideration by the full Senate. House Bill 1471 was referred to the House Finance Committee on May 21, 2025.

Summary: Pennsylvania resident partners who are subject to pass-through entity taxes (PTET) in other states may face unintended double taxation because Pennsylvania currently denies them a resident tax credit for those payments. The Pennsylvania Department of Revenue has taken the position that resident partners are not eligible for a personal income tax credit for PTET paid elsewhere. Notably, the department does permit resident S corporation shareholders to claim a comparable credit — creating an inconsistency in treatment among similarly situated taxpayers.

To address this inequity, the PICPA is urging passage of legislation introduced by Sen. Doug Mastriano (R-Franklin). Senate Bill 253 would extend equivalent resident tax credits to partners, aligning their treatment with that of S corporation shareholders and reducing the risk of double taxation. Companion legislation, House Bill 1471, has been introduced by Reps. Ben Sanchez, CPA-Inactive (D-Montgomery), and Keith Greiner, CPA (R-Lancaster).

Legislation: Senate Bill 396 (Sen. Mastriano); House Bill 1703 (Rep. Greiner)

Issue: Allows pass-through entities to elect an entity-level tax to bypass the federal, state, and local tax (SALT) deduction cap.

Status: This is an issue rising in priority as new stakeholders have become engaged to co-lobby for this legislation. Senate Bill 396 was reported out of the Senate Finance Committee on April 1, 2025, and is pending before the Senate Appropriations Committee. A companion measure, House Bill 1703, has been introduced by Rep. Keith Greiner, CPA (R-Lancaster).

Summary: The Tax Cuts and Jobs Act enacted in 2017 imposed a $10,000 cap on the federal SALT deduction for individual taxpayers. The One Big Beautiful Bill Act (OBBBA) increased the threshold to $40,000, subject to phasedown, beginning in tax year 2025 through 2029, after which the tax once again lowers to $10,000. For tax years beginning in 2030, the cap will revert to $10,000, or $5,000 for married filing separately.

Pennsylvania's decision to not enact a SALT work-around has created challenges for many taxpayers—particularly owners of pass-through businesses such as partnerships and S corporations. Because income from these entities is taxed at the individual owner level, those taxes are subject to the SALT deduction cap at the federal level. In Pennsylvania, that income is also subject to the Commonwealth’s 3.07% personal income tax.

The PICPA is urging state lawmakers to adopt legislation introduced by Doug Mastriano (R-Franklin) that would establish a revenue-neutral elective pass-through entity tax (PTET). Pennsylvania Senate Bill 396 would allow qualifying partnerships and S corporations to elect to pay Pennsylvania income tax at the entity level rather than at the individual owner level. Because entity-level taxes are generally deductible for federal purposes, the election would enable many business owners to effectively bypass the federal SALT deduction limitation.

Enacting this legislation would align Pennsylvania with the majority of states that have already implemented similar workarounds. To date, 36 of the 41 states that impose a personal income tax have adopted comparable PTET provisions to help their taxpayers mitigate the impact of the federal SALT cap.

Legislation: Senate Bill 1183 (Sens. Schlegel Culver and Pisciottano); House Bill 965 (Reps. Greiner and Salisbury)

Issue: Updates Pennsylvania’s charitable reporting thresholds and better aligns financial oversight requirements.

Status: Senate Bill 1183 has been referred to the Senate State Government Committee for consideration. Companion legislation has been introduced in the House by Rep. Abigail Salisbury (D-Allegheny) and Rep. Keith Greiner, CPA (R-Lancaster). House Bill 965 is pending before the House State Government Committee. In February 2026, PICPA submitted a letter to the Senate urging support for Senate Bill 1183.

Summary: Sens. Lynda Schlegel Culver (R-Northumberland) and Nick Pisciottano, CPA-Inactive (D-Allegheny) have reintroduced legislation championed by the PICPA to update Pennsylvania’s charitable reporting thresholds and better align financial oversight requirements with the size of an organization. Senate Bill 1183 would increase the monetary levels that trigger mandatory audits, reviews, or compilations by an independent CPA for registered charitable organizations.

Under the proposal, nonprofits receiving $1 million or more in annual contributions would be required to obtain an audit, raising the current audit threshold from $750,000. Organizations receiving between $500,000 and $1 million would be required to undergo either a review or an audit, while those with contributions between $150,000 and $500,000 would need a compilation, review, or audit. Charities receiving less than $150,000 annually would not be subject to mandatory financial statement preparation requirements.

The PICPA believes the updated thresholds strike an appropriate balance between reducing administrative burdens on smaller nonprofit organizations and preserving strong financial accountability and transparency standards for larger charities.

Legislation: House Bills 855 and 856 (Rep. Webster)

Issue: Simplifies tax administration and reduces burdens for small-business taxpayers.

Status: PICPA continues ongoing discussions with House Finance Committee staff and other stakeholders.

Summary: The Local Taxpayers Bill of Rights provides only limited authority for local taxing bodies to abate interest and penalties, generally restricting relief to situations in which the delay was caused by the taxing authority itself. As a result, taxpayers who miss a filing deadline due to serious illness or other unavoidable circumstances have little recourse at the local level. (Broader abatement authority exists, however, within the City of Philadelphia.)

The PICPA is supporting two legislative proposals designed to promote fairness and improve tax administration. House Bill 855, sponsored by Rep. Joe Webster (D-Montgomery), would amend the Local Taxpayers Bill of Rights to allow local taxing authorities to abate interest or penalties when a taxpayer has acted in good faith, without negligence or intent to defraud, and agrees to pay the outstanding balance without pursuing further appeal. The proposal is aimed at helping those who inadvertently file late or miscalculate taxes owed.

Companion legislation, House Bill 856, would require the Department of Revenue to provide taxpayers with clearer, more detailed explanations in notices of assessment or adjustment. The measure would apply to sales and use tax, personal income tax, and corporate tax matters. In addition, House Bill 856 would also codify when the six-month refund period begins in cases where the department reduces an overpayment to offset a tax adjustment.

Legislation: House Bill 1290 (Rep. Greiner)

Issue: Provides licensed professionals with greater clarity when navigating state laws and regulations via advisory opinions from the Department of State’s Bureau of Professional and Occupational Affairs (BPOA).

Status: House Bill 1290 is under consideration in the House Professional Licensure Committee.

Summary: Rep. Keith Greiner, CPA (R-Lancaster), introduced House Bill 1290 which would authorize licensing boards and commissions within the BPOA to issue nonbinding advisory opinions in response to questions from licensees. While these opinions would not carry the force of law, they would offer valuable guidance to professionals seeking to determine whether a contemplated action complies with applicable statutes and regulations.

Under current law, boards and commissions are not expressly authorized to issue advisory opinions. As a result, professionals who request direction are often told that the board lacks the authority to provide formal guidance. Allowing advisory opinions could help prevent inadvertent violations by giving licensees a reliable mechanism to confirm compliance before proceeding.

PICPA CEO Jennifer Cryder, CPA, testified in March 2024 in favor of similar legislation during the prior legislative session. The PICPA continues to urge lawmakers to advance the measure.