Philadelphia
PHL · local · 13 cited facts
| Category | Provision | Value | Source |
|---|---|---|---|
| no-tax | Long-term portfolio capital gains (TY2025) | ZERO Philadelphia tax on long-term portfolio CG (assets held > 6 months); PA state 3.07% flat only | sources (1)City of Philadelphia DOR: Net Profits Tax page (§19-1800) and Wage Tax page (§19-1500) · medium confidence · as of 2026-07-22 · TY 2025 Philadelphia portfolio capital gains fall outside the Wage Tax and NPT scopes; only PA state 3.07% applies The Net Profits Tax (NPT) is imposed on the net profits from the operation of a trade, business, profession, enterprise, or other activity. ... The Wage Tax is a tax on salaries, wages, commissions, and other compensation. Note: Proof by omission: portfolio capital gains are neither compensation (Wage Tax) nor net profits from a trade or business (NPT), so neither tax reaches them; no phila.gov page states an affirmative exemption, so this is medium confidence. The quote joins two phila.gov pages (NPT and Wage Tax) with an ellipsis. Portfolio CG (listed equities, mutual funds, ETFs) attracts zero Philadelphia tax. But: rental property gains ARE NPT-subject (used in a rental business), and business-asset gains (§1245/§1231 recapture when the business is in Philadelphia) are NPT-subject. NPT resident rate 3.74% (TY2025); Wage Tax resident 3.75%. For a pure-securities investor living in Philadelphia, the effective total rate on LT capital gains is PA state 3.07% only; no city add-on. https://www.phila.gov/services/payments-assistance-taxes/business-taxes/net-profits-tax/ |
| character | School Income Tax (SIT) on short-term gains (TY2025) | 3.74% on resident School Income including short-term capital gains (held <= 6 months), interest, and dividends | sources (1)Philadelphia Code §19-1800 et seq. (School Income Tax); Philadelphia DOR SIT Regulations · high confidence · as of 2026-06-24 · TY 2025 Philadelphia School Income Tax: 3.74% on taxable unearned income for residents (TY2025) The tax is imposed on the School Income of residents of the school district... at the rate of 3.74 percent. Note: Philadelphia School Income Tax (SIT) applies to residents on dividends, interest, S-corporation distributions, and short-term capital gains (defined as gains from assets held for six months or less). Long-term gains are exempt. https://www.phila.gov/services/payments-assistance-taxes/income-taxes/school-income-tax/ |
| rate | Net Profits Tax (business / rental gain, TY2025) | 3.74% resident rate on net profits from a Philadelphia trade, business, or rental; applies to real estate / business-asset gains | sources (1)Philadelphia Code §19-1806; Philadelphia DOR Net Profits Tax rate schedule · high confidence · as of 2026-07-06 · TY 2025 Philadelphia Net Profits Tax: 3.74% residents / 3.43% non-residents (TY2025); Wage Tax 3.75% residents Tax Year Resident rate Non-resident rate 2025 3.74% of net profits 3.43% of net profits 2024 3.75% of net profits 3.44% of net profits Note: These rates are stated here for completeness and context on business-asset gains. For pure investment capital gains: zero PHL tax regardless of these rates. https://www.phila.gov/services/payments-assistance-taxes/taxes/business-taxes/business-taxes-by-type/net-profits-tax/ |
| conformity | Loss carryforward | No standalone Philadelphia capital-loss carry rule; PA state year-lock applies (3-D: same-year, same-class, same-spouse) | sources (1)City of Philadelphia DOR: Net Profits Tax page (§19-1800) and Wage Tax page (§19-1500) · medium confidence · as of 2026-07-22 · TY 2025 Philadelphia portfolio capital gains fall outside the Wage Tax and NPT scopes; only PA state 3.07% applies The Net Profits Tax (NPT) is imposed on the net profits from the operation of a trade, business, profession, enterprise, or other activity. ... The Wage Tax is a tax on salaries, wages, commissions, and other compensation. Note: Proof by omission: portfolio capital gains are neither compensation (Wage Tax) nor net profits from a trade or business (NPT), so neither tax reaches them; no phila.gov page states an affirmative exemption, so this is medium confidence. The quote joins two phila.gov pages (NPT and Wage Tax) with an ellipsis. Portfolio CG (listed equities, mutual funds, ETFs) attracts zero Philadelphia tax. But: rental property gains ARE NPT-subject (used in a rental business), and business-asset gains (§1245/§1231 recapture when the business is in Philadelphia) are NPT-subject. NPT resident rate 3.74% (TY2025); Wage Tax resident 3.75%. For a pure-securities investor living in Philadelphia, the effective total rate on LT capital gains is PA state 3.07% only; no city add-on. https://www.phila.gov/services/payments-assistance-taxes/business-taxes/net-profits-tax/ |
| muni-instate | In-state muni bond interest | Exempt: Philadelphia Wage Tax and NPT do not reach investment interest income (Philadelphia Code §19-1500, §19-1800) | sources (1)City of Philadelphia DOR: Net Profits Tax page (§19-1800) and Wage Tax page (§19-1500) · medium confidence · as of 2026-07-22 · TY 2025 Philadelphia portfolio capital gains fall outside the Wage Tax and NPT scopes; only PA state 3.07% applies The Net Profits Tax (NPT) is imposed on the net profits from the operation of a trade, business, profession, enterprise, or other activity. ... The Wage Tax is a tax on salaries, wages, commissions, and other compensation. Note: Proof by omission: portfolio capital gains are neither compensation (Wage Tax) nor net profits from a trade or business (NPT), so neither tax reaches them; no phila.gov page states an affirmative exemption, so this is medium confidence. The quote joins two phila.gov pages (NPT and Wage Tax) with an ellipsis. Portfolio CG (listed equities, mutual funds, ETFs) attracts zero Philadelphia tax. But: rental property gains ARE NPT-subject (used in a rental business), and business-asset gains (§1245/§1231 recapture when the business is in Philadelphia) are NPT-subject. NPT resident rate 3.74% (TY2025); Wage Tax resident 3.75%. For a pure-securities investor living in Philadelphia, the effective total rate on LT capital gains is PA state 3.07% only; no city add-on. https://www.phila.gov/services/payments-assistance-taxes/business-taxes/net-profits-tax/ |
| muni-outstate | Out-of-state muni bond interest | Exempt: Philadelphia Wage Tax and NPT do not reach investment interest income; only PA state 3.07% applies to investment income | sources (1)City of Philadelphia DOR: Net Profits Tax page (§19-1800) and Wage Tax page (§19-1500) · medium confidence · as of 2026-07-22 · TY 2025 Philadelphia portfolio capital gains fall outside the Wage Tax and NPT scopes; only PA state 3.07% applies The Net Profits Tax (NPT) is imposed on the net profits from the operation of a trade, business, profession, enterprise, or other activity. ... The Wage Tax is a tax on salaries, wages, commissions, and other compensation. Note: Proof by omission: portfolio capital gains are neither compensation (Wage Tax) nor net profits from a trade or business (NPT), so neither tax reaches them; no phila.gov page states an affirmative exemption, so this is medium confidence. The quote joins two phila.gov pages (NPT and Wage Tax) with an ellipsis. Portfolio CG (listed equities, mutual funds, ETFs) attracts zero Philadelphia tax. But: rental property gains ARE NPT-subject (used in a rental business), and business-asset gains (§1245/§1231 recapture when the business is in Philadelphia) are NPT-subject. NPT resident rate 3.74% (TY2025); Wage Tax resident 3.75%. For a pure-securities investor living in Philadelphia, the effective total rate on LT capital gains is PA state 3.07% only; no city add-on. https://www.phila.gov/services/payments-assistance-taxes/business-taxes/net-profits-tax/ |
| qoz-conformity | QOZ conformity (IRC §1400Z-2) | Conforms to IRC §1400Z-2 QOZ gain deferral and 10-year exclusion via Pennsylvania Act 13 of 2019 IRC conformity | sources (1)72 P.S. §7303 (PA Act 13 of 2019); Philadelphia Wage and Net Profits Tax (follows PA income base) · medium confidence · as of 2026-06-19 · TY 2025 Philadelphia conforms to IRC §1400Z-2 QOZ gain deferral and exclusion The Pennsylvania personal income tax base is defined by reference to the Internal Revenue Code as amended. Act 13 of 2019 updated this reference to incorporate IRC §1400Z-2, recognizing qualified opportunity zone gain deferral and the 10-year exclusion for Pennsylvania personal income tax purposes. The Philadelphia Wage Tax and Net Profits Tax use the same income base as Pennsylvania personal income tax. Note: Quote is a synthesis of the PA QOZ conformity chain (Act 13 of 2019 amending 72 P.S. §7303(a)(3)); not verbatim statutory text. Philadelphia Wage and Net Profits Tax follows the same income base as Pennsylvania. To promote to high, transcribe verbatim text from 72 P.S. §7303(a)(3)(viii) at https://www.legis.state.pa.us/cfdocs/legis/LI/uconsCheck.cfm?txtType=HTM&yr=1971&sessInd=0&act=2&chpt=3&sctn=3&subsctn=0. https://www.phila.gov/services/payments-assistance-taxes/business-taxes/wage-tax-employers/ |
| qsbs-conformity | QSBS conformity (IRC §1202) | Non-conforms to IRC §1202; QSBS gain exclusion not recognized, gain fully taxable at the Philadelphia city level | sources (1)72 P.S. §7303; Philadelphia Wage and Net Profits Tax · medium confidence · as of 2026-06-19 · TY 2025 Philadelphia does not conform to IRC §1202 QSBS gain exclusion Pennsylvania personal income tax does not adopt the IRC §1202 exclusion for gain from qualified small business stock. Pennsylvania taxes all net gain from the sale of property, including small business stock, under 72 P.S. §7303(a)(3). The Philadelphia Wage Tax and Net Profits Tax follow the same income base, so QSBS gain is fully taxable at the city level. Note: Non-conformity by structural inference: 72 P.S. §7303 uses express enumeration; §1202 is absent from the list. Quote is a paraphrase, not verbatim statutory text. Philadelphia follows the PA income base. To promote to high, transcribe verbatim from 72 P.S. §7303 at https://www.legis.state.pa.us/cfdocs/legis/LI/uconsCheck.cfm?txtType=HTM&yr=1971&sessInd=0&act=2&chpt=3&sctn=3&subsctn=0. https://www.phila.gov/services/payments-assistance-taxes/business-taxes/wage-tax-employers/ |
| agency-obligations | FNMA/FHLMC bond interest | Exempt: Philadelphia Wage Tax and NPT do not reach investment interest income; FNMA/FHLMC bond interest is investment income outside the Philadelphia tax base (only PA state 3.07% applies) | sources (1)City of Philadelphia DOR: Net Profits Tax page (§19-1800) and Wage Tax page (§19-1500) · medium confidence · as of 2026-07-22 · TY 2025 Philadelphia portfolio capital gains fall outside the Wage Tax and NPT scopes; only PA state 3.07% applies The Net Profits Tax (NPT) is imposed on the net profits from the operation of a trade, business, profession, enterprise, or other activity. ... The Wage Tax is a tax on salaries, wages, commissions, and other compensation. Note: Proof by omission: portfolio capital gains are neither compensation (Wage Tax) nor net profits from a trade or business (NPT), so neither tax reaches them; no phila.gov page states an affirmative exemption, so this is medium confidence. The quote joins two phila.gov pages (NPT and Wage Tax) with an ellipsis. Portfolio CG (listed equities, mutual funds, ETFs) attracts zero Philadelphia tax. But: rental property gains ARE NPT-subject (used in a rental business), and business-asset gains (§1245/§1231 recapture when the business is in Philadelphia) are NPT-subject. NPT resident rate 3.74% (TY2025); Wage Tax resident 3.75%. For a pure-securities investor living in Philadelphia, the effective total rate on LT capital gains is PA state 3.07% only; no city add-on. https://www.phila.gov/services/payments-assistance-taxes/business-taxes/net-profits-tax/ |
| dividend-qualified | Qualified dividend rate (IRC §1(h)(11)) | Exempt from Philadelphia tax: dividend income is investment income outside the Philadelphia Wage Tax and NPT base; only PA state 3.07% applies; IRC §1(h)(11) is irrelevant at the city level | sources (1)City of Philadelphia DOR: Net Profits Tax page (§19-1800) and Wage Tax page (§19-1500) · medium confidence · as of 2026-07-22 · TY 2025 Philadelphia portfolio capital gains fall outside the Wage Tax and NPT scopes; only PA state 3.07% applies The Net Profits Tax (NPT) is imposed on the net profits from the operation of a trade, business, profession, enterprise, or other activity. ... The Wage Tax is a tax on salaries, wages, commissions, and other compensation. Note: Proof by omission: portfolio capital gains are neither compensation (Wage Tax) nor net profits from a trade or business (NPT), so neither tax reaches them; no phila.gov page states an affirmative exemption, so this is medium confidence. The quote joins two phila.gov pages (NPT and Wage Tax) with an ellipsis. Portfolio CG (listed equities, mutual funds, ETFs) attracts zero Philadelphia tax. But: rental property gains ARE NPT-subject (used in a rental business), and business-asset gains (§1245/§1231 recapture when the business is in Philadelphia) are NPT-subject. NPT resident rate 3.74% (TY2025); Wage Tax resident 3.75%. For a pure-securities investor living in Philadelphia, the effective total rate on LT capital gains is PA state 3.07% only; no city add-on. https://www.phila.gov/services/payments-assistance-taxes/business-taxes/net-profits-tax/ |
| treasury | U.S. Treasury interest | Exempt: Philadelphia Wage Tax and NPT do not reach investment interest income; U.S. Treasury interest is outside the Philadelphia tax base | sources (1)City of Philadelphia DOR: Net Profits Tax page (§19-1800) and Wage Tax page (§19-1500) · medium confidence · as of 2026-07-22 · TY 2025 Philadelphia portfolio capital gains fall outside the Wage Tax and NPT scopes; only PA state 3.07% applies The Net Profits Tax (NPT) is imposed on the net profits from the operation of a trade, business, profession, enterprise, or other activity. ... The Wage Tax is a tax on salaries, wages, commissions, and other compensation. Note: Proof by omission: portfolio capital gains are neither compensation (Wage Tax) nor net profits from a trade or business (NPT), so neither tax reaches them; no phila.gov page states an affirmative exemption, so this is medium confidence. The quote joins two phila.gov pages (NPT and Wage Tax) with an ellipsis. Portfolio CG (listed equities, mutual funds, ETFs) attracts zero Philadelphia tax. But: rental property gains ARE NPT-subject (used in a rental business), and business-asset gains (§1245/§1231 recapture when the business is in Philadelphia) are NPT-subject. NPT resident rate 3.74% (TY2025); Wage Tax resident 3.75%. For a pure-securities investor living in Philadelphia, the effective total rate on LT capital gains is PA state 3.07% only; no city add-on. https://www.phila.gov/services/payments-assistance-taxes/business-taxes/net-profits-tax/ |
| fhlb-ffcb | FHLB and FFCB bond interest | Exempt: Philadelphia Wage Tax and NPT do not reach investment interest income; FHLB and FFCB bond interest is outside the Philadelphia tax base | sources (1)City of Philadelphia DOR: Net Profits Tax page (§19-1800) and Wage Tax page (§19-1500) · medium confidence · as of 2026-07-22 · TY 2025 Philadelphia portfolio capital gains fall outside the Wage Tax and NPT scopes; only PA state 3.07% applies The Net Profits Tax (NPT) is imposed on the net profits from the operation of a trade, business, profession, enterprise, or other activity. ... The Wage Tax is a tax on salaries, wages, commissions, and other compensation. Note: Proof by omission: portfolio capital gains are neither compensation (Wage Tax) nor net profits from a trade or business (NPT), so neither tax reaches them; no phila.gov page states an affirmative exemption, so this is medium confidence. The quote joins two phila.gov pages (NPT and Wage Tax) with an ellipsis. Portfolio CG (listed equities, mutual funds, ETFs) attracts zero Philadelphia tax. But: rental property gains ARE NPT-subject (used in a rental business), and business-asset gains (§1245/§1231 recapture when the business is in Philadelphia) are NPT-subject. NPT resident rate 3.74% (TY2025); Wage Tax resident 3.75%. For a pure-securities investor living in Philadelphia, the effective total rate on LT capital gains is PA state 3.07% only; no city add-on. https://www.phila.gov/services/payments-assistance-taxes/business-taxes/net-profits-tax/ |
| filing-status-flat | Filing status irrelevant: flat wage tax rate | Yes: Philadelphia Wage Tax is a flat rate (3.75% residents, 3.44% non-residents for TY2025) on earned income with no filing-status distinction; investment income is outside the Phila. tax base (PHL levies no CG tax) | sources (1)Philadelphia Code §19-1806; Philadelphia DOR Net Profits Tax rate schedule · high confidence · as of 2026-07-06 · TY 2025 Philadelphia Net Profits Tax: 3.74% residents / 3.43% non-residents (TY2025); Wage Tax 3.75% residents Tax Year Resident rate Non-resident rate 2025 3.74% of net profits 3.43% of net profits 2024 3.75% of net profits 3.44% of net profits Note: These rates are stated here for completeness and context on business-asset gains. For pure investment capital gains: zero PHL tax regardless of these rates. https://www.phila.gov/services/payments-assistance-taxes/taxes/business-taxes/business-taxes-by-type/net-profits-tax/ |