Pennsylvania Form PA-40 Schedule SP – Tax Forgiveness Credit (2026)
Last reviewed: 2025-11-08
Use the Pennsylvania Tax Form Calculator Pennsylvania Form PA-40 Schedule SP – Tax Forgiveness Credit as a stand alone tax form calculator to quickly calculate specific amounts for your 2026 Pennsylvania state tax return. Alternatively, you can use one of our Combined Federal and State Tax Estimators to quickly calculate your salary, tax, and take-home pay.
Form PA-40 Schedule SP calculates your household’s eligibility for Pennsylvania’s Tax Forgiveness Credit — a unique refundable credit that can reduce or completely eliminate the 3.07 % state income tax for qualifying residents. The program benefits low- and moderate-income households whose eligibility income (taxable + nontaxable) falls within the thresholds published each year by the Pennsylvania Department of Revenue.
Unlike a deduction, the Tax Forgiveness Credit directly offsets your tax liability on Form PA-40. If your income is below the full-forgiveness limit, the credit equals 100 % of your PA tax; higher incomes receive partial relief in 10 % increments. Even taxpayers with no balance due may receive a refund if they qualify.
Completing Schedule SP
Schedule SP contains four key sections that determine your refund or forgiveness level:
- Section I – Filing Status & Dependents: Choose Single / Married Joint and enter the number of dependent children. Each dependent increases the income threshold for forgiveness.
- Section III – Eligibility Income: Add taxable income from PA-40 Line 9 to all nontaxable sources such as Social Security, unemployment compensation, and interest. This total appears on Line 11.
- Section IV – Tax Forgiveness Calculation: Compare your eligibility income to the published chart. The percentage (100 % – 10 %) determines how much of your PA tax from Line 12 is forgiven.
The calculator below performs this automatically using the official 2024 eligibility tables for single and married filers, ensuring exact alignment with the Department of Revenue chart.
| SECTION I — FILING STATUS | ||
| 1 | Filing Status | |
| 2 | Number of dependent children | |
| SECTION III — ELIGIBILITY INCOME | ||
| 3 | Taxable income (from PA-40 Line 9) | |
| 4 | Nontaxable interest, dividends, and social security | |
| 5 | Unemployment compensation received | |
| 6 | Public assistance, workers' compensation, alimony, or child support | |
| 7 | Employer contributions to retirement plans or deferred compensation | |
| 8 | Nonresident income taxed elsewhere | |
| 9 | Other income (describe) | |
| 10 | Miscellaneous nontaxable income (gifts, awards, etc.) | |
| 11 | Total eligibility income (add Lines 3 through 10) | |
| SECTION IV — CALCULATING YOUR TAX FORGIVENESS CREDIT | ||
| 12 | PA tax liability (from PA-40 Line 12) | |
| 13 | Resident credit or other adjustments (if any) | |
| 14 | Net PA tax liability (Line 12 − Line 13) | |
| 15 | Percentage of Tax Forgiveness (calculated automatically based on status, dependents, and income) | |
| 16 | Tax Forgiveness Credit (Line 14 × Line 15) — enter on PA-40 Line 22 | |
PA-40 Schedule SP Eligibility Income Table (2026)
The table below shows the official 2024 Pennsylvania Tax Forgiveness thresholds based on filing status and number of dependent children. Use this to estimate your potential percentage of tax forgiveness before completing Section IV of Schedule SP.
| Filing Status | Dependents | 100% | 90% | 80% | 70% | 60% | 50% | 40% | 30% | 20% | 10% |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Single / Unmarried | 0 | $6,500 | $6,750 | $7,000 | $7,250 | $7,500 | $7,750 | $8,000 | $8,250 | $8,500 | $8,750 |
| Single / Unmarried | 1 | $16,000 | $16,250 | $16,500 | $16,750 | $17,000 | $17,250 | $17,500 | $17,750 | $18,000 | $18,250 |
| Single / Unmarried | 2 | $25,500 | $25,750 | $26,000 | $26,250 | $26,500 | $26,750 | $27,000 | $27,250 | $27,500 | $27,750 |
| Single / Unmarried | 3 | $35,000 | $35,250 | $35,500 | $35,750 | $36,000 | $36,250 | $36,500 | $36,750 | $37,000 | $37,250 |
| Single / Unmarried | 4 | $44,500 | $44,750 | $45,000 | $45,250 | $45,500 | $45,750 | $46,000 | $46,250 | $46,500 | $46,750 |
| Single / Unmarried | 5 | $54,000 | $54,250 | $54,500 | $54,750 | $55,000 | $55,250 | $55,500 | $55,750 | $56,000 | $56,250 |
| Single / Unmarried | 6 | $63,500 | $63,750 | $64,000 | $64,250 | $64,500 | $64,750 | $65,000 | $65,250 | $65,500 | $65,750 |
| Single / Unmarried | 7 | $73,000 | $73,250 | $73,500 | $73,750 | $74,000 | $74,250 | $74,500 | $74,750 | $75,000 | $75,250 |
| Single / Unmarried | 8 | $82,500 | $82,750 | $83,000 | $83,250 | $83,500 | $83,750 | $84,000 | $84,250 | $84,500 | $84,750 |
| Single / Unmarried | 9 | $92,000 | $92,250 | $92,500 | $92,750 | $93,000 | $93,250 | $93,500 | $93,750 | $94,000 | $94,250 |
| Married / Joint | 0 | $13,000 | $13,250 | $13,500 | $13,750 | $14,000 | $14,250 | $14,500 | $14,750 | $15,000 | $15,250 |
| Married / Joint | 1 | $22,500 | $22,750 | $23,000 | $23,250 | $23,500 | $23,750 | $24,000 | $24,250 | $24,500 | $24,750 |
| Married / Joint | 2 | $32,000 | $32,250 | $32,500 | $32,750 | $33,000 | $33,250 | $33,500 | $33,750 | $34,000 | $34,250 |
| Married / Joint | 3 | $41,500 | $41,750 | $42,000 | $42,250 | $42,500 | $42,750 | $43,000 | $43,250 | $43,500 | $43,750 |
| Married / Joint | 4 | $51,000 | $51,250 | $51,500 | $51,750 | $52,000 | $52,250 | $52,500 | $52,750 | $53,000 | $53,250 |
| Married / Joint | 5 | $60,500 | $60,750 | $61,000 | $61,250 | $61,500 | $61,750 | $62,000 | $62,250 | $62,500 | $62,750 |
| Married / Joint | 6 | $70,000 | $70,250 | $70,500 | $70,750 | $71,000 | $71,250 | $71,500 | $71,750 | $72,000 | $72,250 |
| Married / Joint | 7 | $79,500 | $79,750 | $80,000 | $80,250 | $80,500 | $80,750 | $81,000 | $81,250 | $81,500 | $81,750 |
| Married / Joint | 8 | $89,000 | $89,250 | $89,500 | $89,750 | $90,000 | $90,250 | $90,500 | $90,750 | $91,000 | $91,250 |
| Married / Joint | 9 | $98,500 | $98,750 | $99,000 | $99,250 | $99,500 | $99,750 | $100,000 | $100,250 | $100,500 | $100,750 |
Note: If your eligibility income (PA Schedule SP Line 11) is at or below the 100% threshold, you qualify for full forgiveness. For incomes between brackets, forgiveness drops in 10% increments until the limit for 10% is reached. Beyond the 10% column, no forgiveness is available.
Examples and Scenarios
Example 1 – Full Forgiveness: Casey, single with no dependents, reports eligibility income of $30 000. Since the 100 % threshold is $32 500, Casey’s entire 3.07 % tax ($921) is forgiven.
Example 2 – Married Joint with Dependents: Taylor and Jordan file jointly with two children and $69 000 of eligibility income. Because their 100 % threshold is $70 000, their entire PA tax is eliminated.
Example 3 – Partial Forgiveness: Sam, single with one child, earns $38 000. The threshold is $35 000; $3 000 above limit = 70 % forgiveness. Of Sam’s $1 167 tax, $817 is credited.
Example 4 – No Eligibility: A married couple with no dependents earning $78 000 exceed the partial-credit range and receive no forgiveness on their 3.07% tax.
Key Reminders
- Include all income sources — taxable and nontaxable — to determine eligibility.
- Dependents must meet PA Personal Income Tax definition requirements.
- Forgiveness applies per household, not per spouse separately.
- Partial forgiveness reduces by 10 % for each step above the threshold (up to 10 steps).
- Always use the latest Tax Forgiveness Chart for the current tax year.
Last reviewed: 2025-11-08: If you believe this form requires an update, please contact us.
Further Guidance and Resources
- Form PA-40 – Individual Income Tax Return
- Official PA-40 Schedule SP (2024 PDF)
- Pennsylvania Department of Revenue – Personal Income Tax Forms
The Tax Forgiveness Program is a cornerstone of Pennsylvania’s income-tax policy, ensuring that families below the income threshold do not bear a disproportionate tax burden. By using this calculator and Schedule SP, you can determine your exact eligibility and maximize your refund or tax relief.
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Frequently Asked Questions
What is Form PA-40?
Form PA-40 is the Pennsylvania Individual Income Tax Return used by residents, part-year residents, and nonresidents to report taxable income and claim credits or deductions.
Can I amend to claim a refund?
Yes, if withholding or estimated payments exceeded revised liability.
Does PA tax long-term capital gains?
Yes—PA taxes “net gains from the sale, exchange, or disposition of property.” This wage page doesn’t include capital gains; model them with Schedule D.
What rate does Pennsylvania use?
Pennsylvania has a flat personal income tax rate of 3.07 % for all taxable income.
Where do I enter the exclusion amount?
You do not enter it separately; if fully excluded, you simply omit the gain from your PA-40. Partial exclusions must be shown on Schedule 19.
Important Notes
All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.