The below message was issued to vendors from PA. In short, you will not see this credit, if eligible, anywhere in the software for 2025. PA is handling everything downstream after the return is filed.
“Below is an update regarding the New Working PA Tax Credit (PA-40):
As most of you already know, a new refundable tax credit was recently enacted in Pennsylvania effective for tax year 2025. Unfortunately, due to the timing of the legislation, we are not able to change the PA-40 forms and instructions for tax year 2025. Because we were not able to add a new line or use an existing line on the PA-40 form, the department will be automatically calculating the WPTC for taxpayers who file a PA-40 and have claimed the Federal EITC on their 1040 return.
- Information regarding the credit can be found on our web site HERE.
The credit will be calculated at the time the return is processed and added to the existing Total Payments and Credits (Line 24) on the PA-40 return. The credit will not be added separately or calculated separately. Taxpayers who are receiving a refund will receive one refund from the state that includes the addition of the calculated credit. There will not be a delay in refund return processing due to us calculating and adding the WPTC for taxpayers who qualify for it.
Taxpayers who have a balance due, should submit their balance due payment as calculated at the time of filing and the department will refund any excess credit amount to the taxpayer after calculating the credit. If a taxpayer does not owe a balance and does not have a refund, a refund will be issued to the taxpayer after the calculation and addition of the credit by the department. All taxpayers who receive the new WPTC, will be issued a letter notifying them of the credit. The letter will be generated to the taxpayer at the time the PA-40 return is processed.
We understand that this change will add complexity for the upcoming tax year, and we do intend on updating the PA-40 form and instructions for tax year 2026 and after.