Active-Duty Pay Exemption

Active-duty military pay earned in Pennsylvania is now exempt from local earned income taxes, under a new law that took effect on Jan. 1, 2016. Before state law expanded the exemption under Act 6, only active-duty military pay earned outside of Pennsylvania was exempt.

The new rules do not affect in-state active-duty earnings for tax year 2015.

Taxpayers should retain copies active-duty military orders and leave-and-earnings statements.

April 19, 2016