2024 Pennsylvania Budget Update - Tax Code Changes

There were quite a few changes to the tax code.  Senate Bill 654 is the Tax Code Bill ; below is a summary of the changes.   

Exclusion of Waste Grease Removal from Sales & Use Tax (SUT):

• Exempts from Sales and Use Tax the removal of waste grease from various facilities. Effective Immediately.

Cryptocurrency Data Centers Exclusion:

• Would exclude cryptocurrency mining operations from SUT Exemption Program for the purchase of data center equipment. Effective for Tax Year after December 31, 2025.

Tax Deduction for East Palestine Train Derailment Relief Payments:

• Establishes a state tax deduction for Pennsylvanians who have received or will receive future payments related to the Norfolk Southern train derailment. Effective Immediately.

Cost and Percent Depletion of Mines, Oil/Gas Wells, and other Nat'l Gas Deposits:

• Aligns the Commonwealth’s Personal Income Tax (PIT) with the federal Internal Revenue Code for the purposes of calculating cost, and percent, depletion of mines, oil and gas wells, and other natural deposits. Effective Immediately.

Student Loan Interest Deduction:

• Permits a taxpayer who is a Pennsylvania resident to deduct student loan interest from the individual's taxable income under the personal income tax. Effective for Tax Years after December 31, 2024.

Employer 529/ABLE Contribution:

• Creates a tax credit for employer contributions to 529 tuition savings accounts. Effective for Tax Years after December 31, 2024.

State Business Expense Deductions - Medical Cannabis.

• Effective for tax years after December 31, 2023.

Net Operating Loss (NOL) Cap Increase:

• PSTAP SUPPORTED - will gradually increase the NOL carryover limit from 40 percent to 80 percent, by 10 percent per year. Effective Immediately.

Nexus and Remotely working PA Residents:

• Would permanently codify the exception pertaining to Pennsylvanians who work for employers that are based out-of-state by allowing employees to work from home. Effective Immediately.

Goodwill Deduction:

• Would clarify that any goodwill recorded in Call Reports filed by banks with the FDIC is excluded from the bank shares tax calculation. Effective Immediately.

Expanded Neighborhood Assistance Tax Credit Program:

• Increases the limit of total tax credits for NAP programs per fiscal year from $36 million to $72 million and adjusts the maximum credit that certain businesses can claim. Effective 60 days upon enactment.

Childcare Contribution Tax Credit:

• Provides a tax credit for employers who contribute to employees' childcare costs. Effective for Tax Years after December 31, 2024.

Coal Refuse Energy and Reclamation Tax Credit:

• Would increase the cap to $55 million from the current $20 million cap. Effective Immediately.

Rural Jobs and Investment Tax Credit:

• Would extend the program with up to $50 million in investment authority, $30 of which is authorized as credit eligible contributions. Effective Immediately.

Historic Preservation Tax Credit:

• Would increase the cap to $20 million from the current $5 million cap. Effective after June 30, 2025.