Pennsylvania LLC Taxes: The Complete Filing Guide (2025)
Running a limited liability company (LLC) in Pennsylvania means dealing with taxes at federal, state, and sometimes local levels. This guide simplifies everything you need to know to stay compliant and avoid surprises, from income tax and sales tax to city-specific requirements.
Recommended: Schedule a free consultation with 1-800Accountant to stay on top of your taxes.
Pennsylvania LLC Tax Basics
Navigating your Pennsylvania LLC tax obligations doesn’t have to be complicated. We’ll walk you through the essentials of pass-through taxation, explain Pennsylvania’s specific requirements, and highlight strategies to stay compliant and organized. This guide covers everything from federal income taxes to city-specific requirements and filing deadlines.
Use the links below to jump directly to the section you need:
- Pennsylvania LLC Taxes at a Glance
- Understanding LLC Taxation Basics
- Federal Tax Obligations
- Pennsylvania State Taxes
- Local Tax Considerations
- Tax Calendar and Filing Tips
- Tax Strategies for Pennsylvania LLCs
- Forms and Resources
Pennsylvania LLC Taxes at a Glance
| Tax Type | Rate | Filing Deadline | Forms Required |
|---|---|---|---|
| Federal Income Tax | 10-37% (personal brackets) | April 15, 2025 | Form 1040 + Schedule C or Schedule E/K-1 |
| Self-Employment Tax | 15.3% | April 15, 2025 | Schedule SE |
| Pennsylvania Income Tax | 3.07% | April 15, 2025 | Form PA-40 |
| Pennsylvania Corporate Net Income Tax | 7.99% | May 15, 2025 | Form PA‑RCT‑101 |
| Federal Payroll Taxes (If Employees) | 7.65% employer + 7.65% employee (FICA) | Quarterly (April 30, July 31, October 31, January 31) | Form 941 |
| Pennsylvania Unemployment Tax (If Employees) | 6.5%–10.64% (3.823% for new employers) | Quarterly | Filed online |
| Federal Unemployment (FUTA) | 6% on first $7,000 per employee (0.6% after credits) | January 31, 2026 (annual) | Form 940 |
| Sales & Use Tax | 6% (+ up to 2% local) | Monthly, quarterly, or semiannually (based on sales volume) | Filed online |
| Local Earned Income Tax | 1–3.75% (varies by locality) | April 15, 2025 | Varies by locality |
| Annual Report | $7 fee | September 30, 2025 | File online |
Understanding LLC Taxation Basics
How Pennsylvania LLCs Are Taxed By Default
Your Pennsylvania LLC doesn’t pay taxes itself. Instead, profits flow through to you and your members, who report them on personal tax returns. This is called pass-through taxation.
Here’s how it works:
- Your LLC earns income from business activities
- The LLC itself files no tax return (unless you elect otherwise)
- Profits “pass through” to members based on ownership percentage
- Each member reports their share on their personal tax return
- Members pay tax at their individual income tax rates
What this means for you: Unlike corporations, your business profits are only taxed once, which typically saves money.
Time-Saving Tip: If you’re uncertain about your LLC’s tax classification, a tax professional can review your LLC’s tax setup in 30 minutes and help you choose the most tax-efficient option.
Tax Classification Options
While pass-through taxation is the default, your Pennsylvania LLC can choose alternative tax treatments:
Default LLC Tax Status:
- Single-member LLC: Taxed as a sole proprietorship
- Multi-member LLC: Taxed as a partnership
Optional Tax Classifications:
- S Corporation: Can reduce self-employment taxes by paying “reasonable salaries”
- C Corporation: LLC pays corporate tax on profits, members pay personal tax on distributions (creates double taxation)
Not sure which tax classification is right for your business? Schedule a free consultation with 1-800Accountant.
Federal Tax Obligations
Income Tax
As a Pennsylvania LLC owner, you’ll report your share of business profits on your personal tax return using:
- Form 1040 + Schedule C (single-member LLCs)
- Form 1040 + Schedule E + Schedule K-1 (multi-member LLCs)
Federal income tax rates range from 10% to 37% based on your tax bracket (actual brackets will depend on inflation adjustments and any tax law changes).
Simply Put: Whatever money your business makes (after expenses) gets added to your personal tax return, just like income from a job.
Self-Employment Tax
LLC members actively involved in the business must pay self-employment tax of 15.3% (covering Social Security and Medicare) on their share of LLC profits.
Key points:
- Applies to net earnings of $400 or more
- Calculated on Schedule SE
- You can deduct 50% of the self-employment tax as an “above-the-line” deduction, which lowers your adjusted gross income
What happens if I miss this payment? The IRS charges penalties of 0.5% per month plus interest. However, first-time mistakes can often qualify for penalty abatement if you have a clean compliance history.
Employment Taxes
If your LLC has employees, you must:
- Withhold federal income tax
- Pay and withhold FICA taxes (7.65% each for employer and employee)
- Pay federal unemployment tax (FUTA)
- File quarterly employment tax returns (Form 941)
- Provide W-2 forms annually
Estimated completion time: 2-3 hours per quarter (significantly less with payroll software or professional help)
Estimated Tax Payments
Because no tax is withheld from your LLC profits, you’ll likely need to make quarterly estimated tax payments using Form 1040-ES. These payments cover both income and self-employment taxes on your share of the business income. Missing deadlines or underpaying can lead to IRS penalties, even if you pay in full later.
Working with an accountant can help ensure accurate calculations, on-time payments, and a smarter overall tax strategy.
Key deadlines:
- April 15
- June 16
- September 15
- January 15
Pro Tip: Set calendar reminders 15 days before each deadline. This gives you time to prepare without the last-minute rush that leads to mistakes.
Pennsylvania State Taxes
Pennsylvania Income Tax
Pennsylvania has a flat personal income tax rate of 3.07% that applies to your LLC’s profits on your personal return.
Filing requirements:
- Use Pennsylvania Form PA-40
- Due April 15, 2025
- Pennsylvania follows federal adjusted gross income as a starting point
Bottom Line: For every $1,000 your LLC earns, expect to pay about $30.70 in Pennsylvania state income tax (in addition to federal taxes).
Corporate Net Income Tax
If your Pennsylvania LLC is taxed as a C corporation, it will need to pay the state’s 7.99% Corporate Net Income Tax (CNIT).
Filing requirements:
- Due May 15, 2025
- Use Form PA‑RCT‑101
Sales and Use Tax
If your Pennsylvania LLC sells physical products or certain services:
- Collect 6% sales tax (plus up to 2% local sales tax in certain jurisdictions)
- Register for a sales tax license through myPATH
- File and pay collected taxes monthly, quarterly, or semiannually based on sales volume
- Due dates vary based on filing frequency
60-Second Check: Do I Need to Collect Sales Tax?
- Do you sell physical products in Pennsylvania? → If yes, collect tax
- Do you sell digital products? → Generally not taxable
- Do you provide services? → Most services are exempt
- Do you sell online to Pennsylvania customers? → If yes, collect tax
Services typically exempt from sales tax include:
- Professional services (legal, accounting)
- Personal services (haircuts, fitness training)
- Medical services
Products typically subject to sales tax include:
- Tangible personal property
- Prepared food
- Some digital products
Payroll Taxes
If you have employees in Pennsylvania, you will be responsible for two types of payroll taxes.
Unemployment Insurance (UI) Tax
- Register through the Pennsylvania Department of Labor & Industry
- Rate is 3.82% for new employers (6.5%–10.65% afterwards)
- Due quarterly
Withholding Tax
- Register for a withholding tax account with the Pennsylvania Department of Revenue
- Flat rate of 3.07% (plus local earned income tax based on employee’s PSD code)
- Due quarterly, monthly, semi-monthly, or semi-weekly (filing frequency assigned by the state)
Annual Report Filing
While not a tax, your Pennsylvania LLC must file an annual report to remain in good standing with the state.
- Due by September 30 each year
- $7 filing fee
- File online via the Business Filing Services portal
Calendar Alert: Set a reminder for September 15 to ensure you don’t miss this easy but required filing.
Local Tax Considerations
City Income Taxes
Pennsylvania municipalities and school districts impose local earned income taxes (EIT), which LLC owners must account for separately from state taxes.
Cities with local earned income taxes include:
- Philadelphia: 3.75% (residents), 3.44% (non-residents)
- Pittsburgh: 3% (residents), 1% (non-residents)
- Scranton: 3.4% (residents), 1% (non-residents)
- Over 2,500 other municipalities
Filing requirements:
- File a separate local return with your assigned tax collector (e.g., Keystone, Berkheimer, YATB)
- Use the correct form based on your residential and business location (PSD codes determine this)
- Returns are generally due April 15, 2025
Property Taxes
If your LLC owns real property in Pennsylvania:
- Rates vary by locality
- Assessed annually
- May qualify for various exemptions based on business type
- Personal property tax may apply to business equipment
Tax Calendar and Filing Tips
Key Deadlines for Pennsylvania LLCs
January:
- January 15: Final estimated tax payment for previous year
- January 31: Fourth quarter Pennsylvania UI tax due
- January 31: Issue W-2s/1099s to employees/contractors
- January 31: Fourth quarter federal payroll tax payment due
April:
- April 15: Personal tax returns due
- April 15: Federal income and self-employment tax returns due
- April 15: First quarter estimated tax payment due
- April 15: Local earned income tax returns due
- April 30: First quarter federal payroll tax payment due
- April 30: First quarter Pennsylvania UI tax due
May:
- May 15: Pennsylvania corporate net income tax due
June:
- June 16: Second quarter estimated tax due
July:
- July 31: Second quarter Pennsylvania UI tax due
- July 31: Second quarter federal payroll tax payment due
September:
- September 15: Third quarter estimated tax payment due
- September 30: PA Annual Report due for LLCs
- September 30: Third quarter Pennsylvania UI tax due
October:
- October 31: Third quarter federal payroll tax payment due
Record-Keeping Checklist
Keep these records for at least seven years:
- Business income records (invoices, receipts)
- Expense receipts and documentation
- Bank and credit card statements
- Asset purchase and improvement records
- Vehicle mileage logs
- Home office documentation
- Payroll records
- Previous tax returns
Tax Strategies for Pennsylvania LLCs
S Corporation Election Benefits
Converting your LLC to an S Corporation for tax purposes can save on self-employment taxes:
- File Form 2553 with the IRS
- Pay yourself a “reasonable salary” subject to employment taxes
- Take remaining profits as distributions exempt from self-employment tax
Example: An LLC making $100,000 in profit pays 15.3% self-employment tax on the entire amount. As an S Corp, if $60,000 is a reasonable salary and $40,000 is taken as distributions, only the $60,000 is subject to employment taxes.
Potential Savings: In this example, you’d save about $6,120 in self-employment taxes.
Business Expense Deductions
Common deductions Pennsylvania LLC owners often overlook:
- Home office deduction
- Business mileage (70¢ per mile for 2025)
- Health insurance premiums
- Retirement plan contributions
- Professional development expenses
- Business meals (50% deductible)
Forms and Resources
Federal Tax Forms
- Schedule C: Profit or Loss From Business (sole proprietors)
- Form 1065: U.S. Return of Partnership Income
- Schedule K-1: Partner’s Share of Income, Deductions, Credits
- Form 1120-S: U.S. Income Tax Return for an S Corporation
- Form 2553: Election by a Small Business Corporation (S Corp)
- Form 8832: Entity Classification Election
Pennsylvania Tax Forms
- Form PA-40: Pennsylvania Personal Income Tax Return
- Form PA‑RCT‑101: Pennsylvania Corporate Net Income Tax Return
Helpful Resources
Pennsylvania LLC Taxes FAQs
Yes, as of 2025, every Pennsylvania LLC must file an annual report and pay a $7 fee each year.
This report is due by September 30 and must be filed online through the Department of State’s Business Filing Services portal.
An LLC in Pennsylvania is typically taxed as a pass-through entity by default. This means profits are not taxed at the corporate level but are passed through to members, who then report this income on their personal income tax return. However, an LLC can elect to be taxed as a C or S corporation, altering its tax obligations.
Check out our LLC Taxes article for a more detailed look on tax options.
Most small businesses in Pennsylvania are structured as pass-through entities, meaning the business itself doesn’t pay income tax. Instead, the owners report their share of the profits on their personal tax returns and pay the state’s flat 3.07% income tax rate.
Forming a limited liability company (LLC) in Pennsylvania offers many advantages, including personal asset protection, pass-through taxation, flexible management structure, and reduced paperwork. LLCs also provide business credibility, perpetual existence, privacy advantages, tax benefits, and ease of formation and dissolution.
See our Pennsylvania LLC article for more information.
Need Professional Help? While this guide covers the essentials, tax laws are complex and constantly changing. Schedule a free consultation with 1-800Accountant to ensure your Pennsylvania LLC remains fully compliant while minimizing your tax burden.