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Bill

HB 1357

An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in personal income tax, further providing for definitions and providing for provisions for overtime pay.

2025-2026 Regular Session Introduced by Morgan Cephas and 11 co-sponsors

Pennsylvania bill modifies income tax code to change how overtime pay is taxed, potentially reducing worker tax burden or clarifying overtime income definitions for state purposes.

Referred to Finance
0
WeVote Research Nonpartisan
Bill Summary · HB 1357

Legislative bill overview

HB 1357 modifies Pennsylvania's Tax Reform Code of 1971 to adjust how personal income tax is calculated, specifically by amending definitions related to income and introducing new provisions addressing overtime pay taxation. The bill appears designed to clarify or change tax treatment of overtime compensation for wage earners in the state.

Why is this important

How overtime pay is taxed directly affects take-home earnings for Pennsylvania workers who regularly work extra hours, and could influence whether employers face increased payroll tax obligations. The definitional changes to the tax code could have broad implications for income classification and tax liability across multiple worker categories.

Potential points of contention

  • Overtime tax rate structure: Whether overtime should be taxed at the same marginal rate as regular income or receive preferential treatment could create disagreement between business groups and worker advocates
  • Revenue impact: Changes favorable to workers (like overtime exclusions or deductions) would reduce state tax revenue, requiring either budget adjustments or alternative funding sources
  • Implementation complexity: Modifying how payroll systems calculate and report overtime income creates administrative burden for employers and compliance challenges for workers

Compiled from official sources — confirm details with the bill’s official record.

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