Low-Income Pennsylvanians Can Benefit from Tax Forgiveness Program

Pennsylvania Department of Revenue

HARRISBURG, PA — With the personal income tax filing deadline approaching on May 17, 2021, the Department of Revenue is reminding low-income Pennsylvanians that they may be eligible for a refund or reduction of their Pennsylvania personal income taxes through the commonwealth’s Tax Forgiveness program.

About one in five households qualify for Tax Forgiveness and it is a benefit commonly received by retirees and low-income workers. However, every year there are hundreds of thousands of eligible Pennsylvanians who do not take advantage of the program because they fail to file a Pennsylvania Personal Income Tax Return (PA-40) to claim the reduction or refund on their taxes.

“In recent years, the Tax Forgiveness program has annually delivered refunds totaling more than $240 million to more than 1 million Pennsylvanians. But the reality is that many more people could be taking advantage of this benefit,” Revenue Secretary Dan Hassell said. “If you have a neighbor, friend or family member whom you think may be eligible for this program, please encourage them to check their eligibility and file a tax return with our department. We want to reach as many Pennsylvanians as possible to make them aware this program exists.”

A family of four (couple with two children) can earn up to $34,250 and qualify for Tax Forgiveness. Meanwhile, a single-parent, two-child family with income of up to $27,750 can also qualify for Tax Forgiveness. Visit the Tax Forgiveness page on the Department of Revenue’s website for further eligibility information, including eligibility income tables.

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Using the most recent data available, the Department of Revenue estimates there are at least 380,000 Pennsylvania taxpayers who would qualify for Tax Forgiveness but fail to file an income tax return with the commonwealth to claim the benefit. That estimated number could be much higher depending on the number of children eligible taxpayers have. These people are missing out on refunds ranging between $10 and $1,000.

“A refund of any amount helps low-income, working taxpayers who may be stretched thin,” Secretary Hassell said. “That could be especially true this year due to the fact that our most vulnerable citizens have been the ones hardest hit by the COVID-19 pandemic.”

Background on Tax Forgiveness 

The Tax Forgiveness program allows eligible taxpayers to reduce all or part of their Pennsylvania personal income tax liability. For taxpayers who earn a wage, the employee can give his or her employer a form (REV-419) to ask that withholding not be done in cases of 100% tax forgiveness. In cases where withholding does occur, the taxpayer must file the Personal Income Tax Return (PA-40) and complete an additional form, the Schedule SP, to claim Tax Forgiveness.

Please keep in mind that people who are claimed as a dependent of another taxpayer are not eligible to receive Tax Forgiveness. There are additional instructions available in the Tax Forgiveness section of the Department of Revenue’s PA Personal Income Tax Guide.

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This program was authorized in the 1970s through legislation enacted by Pennsylvania’s General Assembly.

How to File a PA-40 and Claim Tax Forgiveness

For taxpayers subject to employer withholding, one easy way to file your Pennsylvania Personal Income Tax Return (PA-40) and the additional form, Schedule SP, is by using myPATH, the Department of Revenue’s free, online filing system. Visit mypath.pa.gov to access this system.

Taxpayers do not need to create a username or password to perform many functions in myPATH, including filing the PA-40 and Schedule SP. Prior to filing your return, you will need your wage and tax information. The system will walk you through a series of steps to file your return and determine your eligibility for Tax Forgiveness.

Other free electronic filing options are available to file state and federal returns using software from a reputable vendor. More vendor information is available on the Department of Revenue’s website.

Taxpayer Service and Assistance

Those with questions on Tax Forgiveness can finds answers through the department’s Online Customer Service CenterOpens In A New Window and by calling 717-787-8201 between 8 a.m. and 5 p.m., Monday through Friday. The Online Customer Service Center allows taxpayers to securely submit a question to the department through a process that is similar to sending an email.

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The Department of Revenue’s district offices are open in a limited capacity with social distancing guidelines in place. Appointments are required to receive in-person assistance. Please keep the following in mind.

  • Taxpayer assistance hours are 8:30 a.m. to 5 p.m. Monday, Wednesday and Friday. Appointments between 8:30 a.m. and 10 a.m. will be reserved for senior citizens.
  • Taxpayers are required to wear a mask during appointments.
  • Taxpayers should know that the Department of Revenue will be following health and safety guidelines established by the Department of Health to promote a clean office environment.

As a reminder, the deadline for filing 2020 Pennsylvania personal income tax returns and making final 2020 income tax payments is May 17, 2021. For further information on the upcoming filing deadline, see Reminder: Personal Income Tax Filing Deadline for PA is May 17, 2021.

Free tax forms and instructions are available at www.revenue.pa.gov.

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