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The Pennsylvania Code website reflects the Pennsylvania Code changes effective through 54 Pa.B. 488 (January 27, 2024).

61 Pa. Code § 2.7. Application of credits.

§ 2.7. Application of credits.

 (a)  An employer is entitled to claim the EIP credit only against a tax which he is required to pay as an employer. Thus, a corporate employer, other than a Pennsylvania S Corporation employer, may not assign an EIP credit to a shareholder for use as a credit against the shareholder’s personal income tax. Similarly, a parent corporation may not assign an EIP credit to a subsidiary corporation or vice versa. Further, an employer may not use EIP credits against taxes withheld from employes.

 (b)  Taxpayers who are required to prepay their taxes may apply EIP credits against the payments.

 (c)  In the case of a partnership the EIP credit shall be allocated among the partners as income is allocated.

 (d)  Married taxpayers who wish to use the EIP credit against personal income tax are required to file a separate tax report and may not file jointly with a spouse.

 (e)  In computing wages as a business expense for State tax purposes, the wage cost item shall be reduced by any EIP credit taken by the employer and the Federal wage cost item, if also used for State purposes, shall be increased by the Federal Targeted Jobs Tax Credit taken by the employer.

 (f)  In the case of a Pennsylvania S Corporation, the EIP credit shall be allocated among the shareholders as income is allocated.


   The provisions of this §  2.7 amended under section 506 of The Administrative Code of 1929 (71 P. S. §  186); section 491(e) of the Public Welfare Code (62 P. S. §  491(e)); and section 1701-A(e) of the Tax Reform Code of 1971 (72 P. S. §  8701-A(e)).


   The provisions of this §  2.7 adopted July 16, 1982, effective July 17, 1982, 12 Pa.B. 2292; amended October 28, 1988, effective October 29, 1988, 18 Pa.B. 4866. Immediately preceding text appears at serial pages (105752) and (126619).

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