of unearned income for 2016
Who pays the tax
If you are a Philadelphia resident who receives certain types of unearned income, you must pay School Income Tax. Taxable forms of unearned income include dividends, royalties, short-term rental income, cash lottery winnings from the Pennsylvania Lottery, and some types of interest. Read the official School Income Tax regulations for a complete list of taxable income types.
The School Income Tax must be filed annually by April 15. The failure of any person to receive a tax return does not excuse them from the responsibility of filing a return and paying the tax due on time.
Tax rates, penalties, & fees
How much is it?
Effective July 1, 2016: 3.9004% of unearned income for 2016
For Tax Year 2015: 3.9102% of unearned income for 2015
What happens if you don't pay on time?
You will be charged interest and penalties when you don’t pay taxes on time.
Effective January 1, 2016, for all taxes except Liquor and Real Estate, the monthly interest rate is 0.5%.
Effective January 1, 2014 through December 31st, 2015, for all taxes except Liquor and Real Estate, the monthly interest rate is .416%
Penalties accrue at 1.25% of the unpaid tax for each month or fraction thereof.
For more information about interest and penalty rates, visit the interest, penalties, and fees page.
Discounts & exemptions
Are you eligible for a discount?
No discounts are available for the School Income Tax. However, if you are a Philadelphia resident for a portion of the year, the tax is adjusted so you only pay for unearned income received during your period of residency.
Can you be excused from paying the tax?
The following types of unearned income are exempt from School Income Tax:
- Interest earned on savings and checking accounts
- Interest received from bonds or debt obligations of the Commonwealth of Pennsylvania or its political subdivisions
- Interest received from direct obligations of the federal government