Pennsylvania offers several credits that may reduce your Pennsylvania tax liability. Use the Credits section to review and enter any credits that apply to your tax situation.
Some credits are calculated directly on the Pennsylvania return, while others require supporting schedules or credit certificates.
Program Entry
Pennsylvania Return → Credits
Schedule SP (Tax Forgiveness Credit)
Select Edit to review the Pennsylvania Tax Forgiveness Credit.
Pennsylvania's Tax Forgiveness program may reduce or eliminate tax liability for qualifying taxpayers and their dependents based on:
- Income
- Filing status
- Family size
The program calculates the credit using information already entered on the Pennsylvania return. For more information regarding this credit, please see our article here.
Credit for Taxes Paid to Another State
This section is for if you paid income tax to another state on income that is also taxed by Pennsylvania.
This credit helps prevent double taxation of the same income.
You may need information from:
- Another state's tax return
- Forms W-2
- Schedules K-1
- Other supporting tax documents
The allowable credit is generally limited to the lesser of:
- The tax paid to the other state; or
- The Pennsylvania tax attributable to that income
Schedule OC - Other Credits
Use this section to enter Pennsylvania tax credits reported on Schedule OC.
Most Schedule OC credits require supporting documentation, approval letters, certificates, or schedules issued by a Pennsylvania agency.
Available Schedule OC Credits
The Schedule OC interview includes the following credits:
- Job Creation Tax Credit
- Research and Development Tax Credit
- Film Production Tax Credit
- Keystone Innovation Zone Tax Credit
- Resource Enhancement and Protection Tax Credit
- Neighborhood Assistance Program Tax Credit
- Educational Improvement Tax Credit
- Opportunity Scholarship Tax Credit
- Keystone Special Development Zone Tax Credit
- Historic Preservation Incentive Tax Credit
- Organ and Bone Marrow Donor Tax Credit
- Coal Refuse Energy and Reclamation Tax Credit
- Mixed-Use Development Tax Credit
- Entertainment Economic Enhancement Program Tax Credit
- Video Game Production Tax Credit
- Waterfront Development Tax Credit
- Manufacturing and Investment Tax Credit
- PA Resource Manufacturing Tax Credit
- Beginning Farmer Tax Credit
- Airport Land Development Program Tax Credit
- PA Housing Tax Credit
- Employer Childcare Tax Credit
- PA Savings and/or ABLE Account Employer Matching Contribution Tax Credit
Credit Information
When entering a Schedule OC credit, you may be asked to provide information such as:
- Credit type
- Credit certificate number
- Taxpayer identification information
- Credit amount
- Carryforward information
Enter all information exactly as shown on the credit documentation.
How Does This Affect My Return?
Schedule OC credits may:
- Reduce Pennsylvania tax liability.
- Increase a Pennsylvania refund.
- Report qualifying Pennsylvania tax incentive programs.
- Claim credits passed through from partnerships, S corporations, estates, or trusts when applicable.
PA Schedule DC - Dependents
Use this section. to complete PA Schedule DC.
Pennsylvania requires the relationship for all dependents claimed on the return.
Important
If you claimed Child and Dependent Care benefits on the federal return and entered a dependent on Federal Form 2441 who is not listed as a dependent on the Pennsylvania return, additional relationship information may be required for PA Schedule DC.
How Does This Affect My Return?
The information entered on Schedule DC is used to:
- Determine eligibility for certain Pennsylvania credits.
- Calculate Pennsylvania Tax Forgiveness.
- Verify dependent information reported on the return.
How Does This Affect My Return?
Credits entered in this section may:
- Reduce Pennsylvania tax liability.
- Increase a Pennsylvania refund.
- Claim Pennsylvania-specific business and incentive credits.
- Prevent double taxation of income earned in another state.
- Determine eligibility for Pennsylvania Tax Forgiveness and dependent-related benefits.
Notes
- Many Pennsylvania credits require supporting documentation or credit certificates.
- Schedule OC is used to report numerous Pennsylvania business, housing, agricultural, educational, and economic development credits.
- The Credit for Taxes Paid to Another State helps prevent double taxation of the same income.
- Pennsylvania Tax Forgiveness eligibility is based on income and family size.
- Review all supporting schedules and documentation before filing your Pennsylvania return.
- Keep copies of all credit certificates, approval letters, and supporting documents with your tax records.