Don’t believe your BIRT Tax Bill is $0? BELIEVE IT.
Starting with Tax Year 2014, businesses in Philadelphia will receive a tax break on their Business Income and Receipts Tax (BIRT).
The new tax break exempts the first $50,000 earned by a business and the net income associated with it. The exemption amount increases to $75,000 for tax year 2015; and $100,000 for Tax Year 2016 and thereafter. The “gross receipts,” or the amount of money a business has made in a year, is taxed at a rate of $1.415 per $1,000. The “net income” is taxed at a rate of 6.43% and will be reduced gradually until it reaches 6% in tax year 2023.
BIRT is a tax levied upon both the net income and the gross receipts of a business. Remember, every individual, partnership, association and corporation engaged in a business is required to file an annual BIRT return, whether they made a profit or not.
The Department of Revenue also has extended hours through the tax season:
Monday – Thursday : 8:30 am – 7 pm
Friday: 8:30 am – 5 pm
Saturday: 10 am – 2 pm
For questions about the BIRT, or any other taxes, contact the Department of Revenue at 215.686.6600 or www.phila.gov/revenue.
Job Creation Tax Credit worth $25,000 per job in 2015
Businesses that create jobs in Philadelphia in 2015 may be eligible for a credit of $25,000 per job created, or 2% of the annual wages paid.
To qualify for the credit, a business must demonstrate the ability to create at least 25 new full-time jobs, or increase full-time workforce in Philadelphia by at least 20%, within a five-year period.
The Job Creation Tax Credit may be applied against the City’s Business Income and Receipts Tax liability. Under the program, for each qualified new full-time job created in the City of Philadelphia in 2015, eligible businesses may claim a credit of $5,000 (or 2% of the annual wages paid, whichever is higher) annually for five years for a total of $25,000. Currently, jobs created after 2015 are eligible for a one-time, $5,000 tax credit.
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