Pennsylvania Tax and Wage News
Governor Rendell signed the PA budget into law on July 9, 2006 which included sizeable business cuts and minimum-wage increases.
Here are some highlights from the budget which feature wage and tax changes:
Minimum Wage:
- For employers with 10 or more employees, the minimum wage will increase on 1/1/07 to $6.25/hr. A second increase to $7.15/hr will become effective 7/1/07.
- For employers with fewer than 10 employees, the minimum wage will increase on 1/1/07 to $5.85/hr. A second increase to $6.65/hr will become effective 7/1/07 and a final increase to $7.15/hr will take place 7/1/08.
Proposed Business Tax Cuts:
- Increase in deduction for net operating losses from $2 million to $3 million, or 12.5% of net income, whichever is greater.
- Accelerated phaseout of capital stock and franchise tax. The tax will be phased out completely in 2011.
- Increase in research and development tax credits.
- Tax breaks for individuals who use Health Savings Accounts.
