In the near future, we intend to introduce new legislation creating a personal income tax (PIT) deduction up to $5,250 for individuals who receive post-secondary education expense support directly from their employers.

Eligible post-secondary education expenses in this case would mean costs and expenses incurred by an employee, including employer-provided support for career & technical education costs. This new Pennsylvania deduction will mirror the established Internal Revenue Service standard. It will be equal to the amount of the employer’s reimbursement payment that is included in the employee’s taxable wages as reported on their Federal income tax return. Tax-free benefits for educational assistance at the Federal level are limited to $5,250 per employee per year, which is the basis for this state-level proposal.

With the passage of Act 56 of 2024, Pennsylvania employers are newly eligible for a 25% tax credit on matching employer 529 account contributions of up to $500 per employee, per year. However, we can certainly do more to support lifelong learning and training opportunities for working professionals. At least 29 other states allow employees to deduct a portion of their employer-provided tuition assistance. This proposed statutory change will amend Section 303 of the Tax code in classes of income to allow for the deduction of these costs up to the Federal limit.

We invite you to join in cosponsorship of this PIT deduction proposal. Thank you.

Statutes/Laws affected:
Printer's No. 664 (Apr 21, 2025): P.L.6, No.2