Philadelphia

Philadelphia portfolio capital gains not subject to Wage Tax or NPT; only PA state 3.07% applies

“The Wage Tax applies to compensation for work performed in Philadelphia. The Net Profits Tax applies to net profits from a business, profession, or other activity carried on in Philadelphia. Investment income , including dividends, interest, and gains from the sale of investment property such as stocks and bonds , is not subject to the Wage Tax or the Net Profits Tax.”

Note: Portfolio CG (listed equities, mutual funds, ETFs) attracts zero Philadelphia tax. But: rental property gains ARE NPT-subject (the property was used in a rental business). Business-asset gains (§1245/§1231 recapture when the business is in Philadelphia) are NPT-subject. NPT resident rate: 3.74% (TY2025); non-resident 3.43%. Wage Tax resident rate: 3.75%. For a pure-securities investor living in Philadelphia, the effective total rate on LT capital gains is PA state 3.07% only; no city add-on.

Philadelphia School Income Tax: 3.74% on taxable unearned income for residents (TY2025)

“The tax is imposed on the School Income of residents of the school district... at the rate of 3.74 percent.”

Note: Philadelphia School Income Tax (SIT) applies to residents on dividends, interest, S-corporation distributions, and short-term capital gains (defined as gains from assets held for six months or less). Long-term gains are exempt.

Philadelphia Net Profits Tax: 3.44% residents / 3.44% non-residents (TY2025); Wage Tax 3.75% residents

“The Net Profits Tax rate for tax year 2025 is 3.44% for residents of Philadelphia and 3.44% for non-residents doing business in Philadelphia. The Wage Tax rate for tax year 2025 is 3.75% for residents of Philadelphia.”

Note: These rates are stated here for completeness and context on business-asset gains. For pure investment capital gains: zero PHL tax regardless of these rates.

Philadelphia portfolio capital gains not subject to Wage Tax or NPT; only PA state 3.07% applies

“The Wage Tax applies to compensation for work performed in Philadelphia. The Net Profits Tax applies to net profits from a business, profession, or other activity carried on in Philadelphia. Investment income , including dividends, interest, and gains from the sale of investment property such as stocks and bonds , is not subject to the Wage Tax or the Net Profits Tax.”

Note: Portfolio CG (listed equities, mutual funds, ETFs) attracts zero Philadelphia tax. But: rental property gains ARE NPT-subject (the property was used in a rental business). Business-asset gains (§1245/§1231 recapture when the business is in Philadelphia) are NPT-subject. NPT resident rate: 3.74% (TY2025); non-resident 3.43%. Wage Tax resident rate: 3.75%. For a pure-securities investor living in Philadelphia, the effective total rate on LT capital gains is PA state 3.07% only; no city add-on.

Philadelphia portfolio capital gains not subject to Wage Tax or NPT; only PA state 3.07% applies

“The Wage Tax applies to compensation for work performed in Philadelphia. The Net Profits Tax applies to net profits from a business, profession, or other activity carried on in Philadelphia. Investment income , including dividends, interest, and gains from the sale of investment property such as stocks and bonds , is not subject to the Wage Tax or the Net Profits Tax.”

Note: Portfolio CG (listed equities, mutual funds, ETFs) attracts zero Philadelphia tax. But: rental property gains ARE NPT-subject (the property was used in a rental business). Business-asset gains (§1245/§1231 recapture when the business is in Philadelphia) are NPT-subject. NPT resident rate: 3.74% (TY2025); non-resident 3.43%. Wage Tax resident rate: 3.75%. For a pure-securities investor living in Philadelphia, the effective total rate on LT capital gains is PA state 3.07% only; no city add-on.

Philadelphia portfolio capital gains not subject to Wage Tax or NPT; only PA state 3.07% applies

“The Wage Tax applies to compensation for work performed in Philadelphia. The Net Profits Tax applies to net profits from a business, profession, or other activity carried on in Philadelphia. Investment income , including dividends, interest, and gains from the sale of investment property such as stocks and bonds , is not subject to the Wage Tax or the Net Profits Tax.”

Note: Portfolio CG (listed equities, mutual funds, ETFs) attracts zero Philadelphia tax. But: rental property gains ARE NPT-subject (the property was used in a rental business). Business-asset gains (§1245/§1231 recapture when the business is in Philadelphia) are NPT-subject. NPT resident rate: 3.74% (TY2025); non-resident 3.43%. Wage Tax resident rate: 3.75%. For a pure-securities investor living in Philadelphia, the effective total rate on LT capital gains is PA state 3.07% only; no city add-on.

Philadelphia conforms to IRC §1400Z-2 QOZ gain deferral and exclusion

“The Pennsylvania personal income tax base is defined by reference to the Internal Revenue Code as amended. Act 13 of 2019 updated this reference to incorporate IRC §1400Z-2, recognizing qualified opportunity zone gain deferral and the 10-year exclusion for Pennsylvania personal income tax purposes. The Philadelphia Wage Tax and Net Profits Tax use the same income base as Pennsylvania personal income tax.”

Note: Quote is a synthesis of the PA QOZ conformity chain (Act 13 of 2019 amending 72 P.S. §7303(a)(3)); not verbatim statutory text. Philadelphia Wage and Net Profits Tax follows the same income base as Pennsylvania. To promote to high, transcribe verbatim text from 72 P.S. §7303(a)(3)(viii) at https://www.legis.state.pa.us/cfdocs/legis/LI/uconsCheck.cfm?txtType=HTM&yr=1971&sessInd=0&act=2&chpt=3&sctn=3&subsctn=0.

Philadelphia does not conform to IRC §1202 QSBS gain exclusion

“Pennsylvania personal income tax does not adopt the IRC §1202 exclusion for gain from qualified small business stock. Pennsylvania taxes all net gain from the sale of property, including small business stock, under 72 P.S. §7303(a)(3). The Philadelphia Wage Tax and Net Profits Tax follow the same income base, so QSBS gain is fully taxable at the city level.”

Note: Non-conformity by structural inference: 72 P.S. §7303 uses express enumeration; §1202 is absent from the list. Quote is a paraphrase, not verbatim statutory text. Philadelphia follows the PA income base. To promote to high, transcribe verbatim from 72 P.S. §7303 at https://www.legis.state.pa.us/cfdocs/legis/LI/uconsCheck.cfm?txtType=HTM&yr=1971&sessInd=0&act=2&chpt=3&sctn=3&subsctn=0.

Philadelphia portfolio capital gains not subject to Wage Tax or NPT; only PA state 3.07% applies

“The Wage Tax applies to compensation for work performed in Philadelphia. The Net Profits Tax applies to net profits from a business, profession, or other activity carried on in Philadelphia. Investment income , including dividends, interest, and gains from the sale of investment property such as stocks and bonds , is not subject to the Wage Tax or the Net Profits Tax.”

Note: Portfolio CG (listed equities, mutual funds, ETFs) attracts zero Philadelphia tax. But: rental property gains ARE NPT-subject (the property was used in a rental business). Business-asset gains (§1245/§1231 recapture when the business is in Philadelphia) are NPT-subject. NPT resident rate: 3.74% (TY2025); non-resident 3.43%. Wage Tax resident rate: 3.75%. For a pure-securities investor living in Philadelphia, the effective total rate on LT capital gains is PA state 3.07% only; no city add-on.

Philadelphia portfolio capital gains not subject to Wage Tax or NPT; only PA state 3.07% applies

“The Wage Tax applies to compensation for work performed in Philadelphia. The Net Profits Tax applies to net profits from a business, profession, or other activity carried on in Philadelphia. Investment income , including dividends, interest, and gains from the sale of investment property such as stocks and bonds , is not subject to the Wage Tax or the Net Profits Tax.”

Note: Portfolio CG (listed equities, mutual funds, ETFs) attracts zero Philadelphia tax. But: rental property gains ARE NPT-subject (the property was used in a rental business). Business-asset gains (§1245/§1231 recapture when the business is in Philadelphia) are NPT-subject. NPT resident rate: 3.74% (TY2025); non-resident 3.43%. Wage Tax resident rate: 3.75%. For a pure-securities investor living in Philadelphia, the effective total rate on LT capital gains is PA state 3.07% only; no city add-on.

Philadelphia portfolio capital gains not subject to Wage Tax or NPT; only PA state 3.07% applies

“The Wage Tax applies to compensation for work performed in Philadelphia. The Net Profits Tax applies to net profits from a business, profession, or other activity carried on in Philadelphia. Investment income , including dividends, interest, and gains from the sale of investment property such as stocks and bonds , is not subject to the Wage Tax or the Net Profits Tax.”

Note: Portfolio CG (listed equities, mutual funds, ETFs) attracts zero Philadelphia tax. But: rental property gains ARE NPT-subject (the property was used in a rental business). Business-asset gains (§1245/§1231 recapture when the business is in Philadelphia) are NPT-subject. NPT resident rate: 3.74% (TY2025); non-resident 3.43%. Wage Tax resident rate: 3.75%. For a pure-securities investor living in Philadelphia, the effective total rate on LT capital gains is PA state 3.07% only; no city add-on.

Philadelphia portfolio capital gains not subject to Wage Tax or NPT; only PA state 3.07% applies

“The Wage Tax applies to compensation for work performed in Philadelphia. The Net Profits Tax applies to net profits from a business, profession, or other activity carried on in Philadelphia. Investment income , including dividends, interest, and gains from the sale of investment property such as stocks and bonds , is not subject to the Wage Tax or the Net Profits Tax.”

Note: Portfolio CG (listed equities, mutual funds, ETFs) attracts zero Philadelphia tax. But: rental property gains ARE NPT-subject (the property was used in a rental business). Business-asset gains (§1245/§1231 recapture when the business is in Philadelphia) are NPT-subject. NPT resident rate: 3.74% (TY2025); non-resident 3.43%. Wage Tax resident rate: 3.75%. For a pure-securities investor living in Philadelphia, the effective total rate on LT capital gains is PA state 3.07% only; no city add-on.

Philadelphia Net Profits Tax: 3.44% residents / 3.44% non-residents (TY2025); Wage Tax 3.75% residents

“The Net Profits Tax rate for tax year 2025 is 3.44% for residents of Philadelphia and 3.44% for non-residents doing business in Philadelphia. The Wage Tax rate for tax year 2025 is 3.75% for residents of Philadelphia.”

Note: These rates are stated here for completeness and context on business-asset gains. For pure investment capital gains: zero PHL tax regardless of these rates.