--- title: "Pennsylvania LLC Taxes: What You'll Actually Owe in 2026 | LLC Attorney" description: "How Pennsylvania LLC taxes work in 2026: the flat 3.07% income tax, no franchise tax, the brand-new $7 Annual Report replacing the old decennial filing, and the S-Corp election." canonical: https://llcattorney.com/states/pa/llc-taxes-pennsylvania image: https://llcattorney.com/images/share-cover.png source_path: /states/pa/llc-taxes-pennsylvania --- Key Takeaways - Pennsylvania taxes LLC pass-through income at Flat 3.07% on taxable income - Pennsylvania imposes no separate entity-level franchise tax on standard LLCs - Sales Tax: 6% (combined: 8%) - Annual Report due September 30 each year, $7 fee - Federal self-employment tax of 15.3% applies to net LLC profit regardless of state - Pennsylvania generally follows the federal S-Corp election automatically for state tax purposes, with Form REV-976 used only to opt out of that treatment (uncommon) — verify current-year specifics with the Department of Revenue, since PA's guidance on this mechanic has shifted across past tax years. - Same-day formation and compliance filing available through LLC Attorney at no markup on state fees Pennsylvania keeps LLC taxation simple at the state-income-tax level: a flat 3.07% rate with no brackets, and no franchise tax since the old Capital Stock Tax was repealed after 2015. What's genuinely new is the compliance calendar — Pennsylvania just replaced its once-per-decade Decennial Report with an actual annual filing, a change many longtime LLC owners haven't caught up with yet. This guide covers exactly what a Pennsylvania LLC owes in 2026: the flat 3.07% personal income tax, why there's no entity-level franchise tax to worry about, the brand-new $7 Annual Report and its 2027 enforcement timeline, and when an S-Corp election is worth the added payroll complexity — including Pennsylvania's unusual employee-side UI withholding. 3.07%Flat state income tax $0Franchise tax (repealed after 2015) $7New annual Annual Report fee 6%–8%Combined sales tax range ## Pennsylvania Personal Income Tax on LLC Profit By default, a Pennsylvania LLC is a pass-through entity — the LLC itself pays no separate PA income tax. Profit flows through to the owners' PA-40 returns, taxed once at the federal level and once at Pennsylvania's flat 3.07% rate on top — one of the simplest, lowest state income tax burdens for an LLC owner anywhere in this guide. **Pennsylvania's rate: Flat 3.07% on taxable income** One of the lowest flat rates in the country, applying uniformly to residents and nonresidents — the PA statute explicitly names partnerships, S-corporations, and LLCs not federally taxed as corporations as subject to this rate, with no brackets to plan around. ## Does Pennsylvania Charge an Entity-Level Franchise Tax? Nobody, by default. Pennsylvania has no LLC franchise tax or capital stock tax — that regime was fully repealed for tax years after 2015. Income flows through to owners' PA-40 returns untouched at the entity level, unless the LLC affirmatively elects (via REV-976) to be taxed as a C-corporation instead, which is rare. ## Pennsylvania Sales Tax The state rate is 6%, with Philadelphia adding 2% (for 8% combined) and Allegheny County adding 1% (for 7% combined) — all other counties stay at the flat 6% state rate with no local add-on. Register through myPATH before making any taxable sale of tangible personal property or enumerated services. - State rate: **6%**, combined: 8% - Registration: myPATH online registration, No separate fee cited beyond standard business registration fee with the Pennsylvania Department of Revenue (myPATH) - Registration is handled entirely through the Department of Revenue's myPATH portal. ## Pennsylvania Annual Report Requirement Pennsylvania requires every LLC to file Annual Report with the Pennsylvania Department of State, Bureau of Corporations, due September 30 each year. Filing fee: $7. Pennsylvania overhauled its filing regime in 2025: LLCs now file an Annual Report every year for $7, replacing the old once-per-decade Decennial Report. Through 2026, the state is running a grace period with no penalties for a missed filing. Starting in 2027, a missed September 30 deadline will trigger a 6-month grace window, after which the Department of State administratively dissolves the LLC and the business name becomes available to others. Once the 2027 enforcement regime takes effect, reinstatement will require a $35 fee (online) plus a $15 late fee for each missed Annual Report. Owners used to the old once-a-decade filing should not assume that history carries forward — the new annual cadence is real and enforcement is coming. ## Federal Self-Employment Tax and How Your Pennsylvania LLC Is Classified Regardless of which state you're in, LLC owners who materially participate in the business owe federal self-employment tax — 15.3% on net profit, covering Social Security (up to the $184,500 (2026) wage base) and Medicare (no cap). ### Single-Member LLCs A single-member Pennsylvania LLC defaults to a disregarded entity for federal tax purposes — you report income and expenses on Schedule C of your personal Form 1040 and compute self-employment tax on Schedule SE. Pennsylvania adds its flat 3.07% income tax on top at the personal level. ### Multi-Member LLCs A multi-member Pennsylvania LLC defaults to partnership taxation, filing an informational Form 1065 and issuing each member a Schedule K-1. There's no Pennsylvania-specific filing consequence tied to member count — both structures owe the same flat 3.07% rate on their share of profit. ## Should Your Pennsylvania LLC Elect S-Corp Taxation? An S-Corp election lets you split LLC profit into a reasonable salary (payroll-taxed) and distributions (not subject to self-employment tax), once the business is consistently profitable enough to justify the added payroll complexity. **Pennsylvania's treatment:** Pennsylvania generally follows the federal S-Corp election automatically for state tax purposes, with Form REV-976 used only to opt out of that treatment (uncommon) — verify current-year specifics with the Department of Revenue, since PA's guidance on this mechanic has shifted across past tax years. Because Pennsylvania's personal income tax is a flat 3.07% with no bracket escalation, the S-Corp election calculus here is purely about federal self-employment/FICA tax savings — there's no state-rate-escalation incentive the way there is in a graduated-bracket state like New York or Oregon. One added wrinkle: Pennsylvania does not allow the federal QBI-style pass-through deductions at the state level, so the state tax base for LLC owners tends to be broader than the federal base. ## Pennsylvania LLC Tax Costs at a Glance Tax / Fee Amount Notes Annual Report $7 Due September 30 each year; No penalty through 2026 (transition grace period); starting 2027, a 6-month grace window applies if missed Sales Tax 6% Combined: 8% Federal self-employment tax 15.3% Applies to net profit up to the $184,500 (2026) Social Security wage base (Medicare portion has no cap) State personal income tax (on your share of LLC profit) Flat 3.07% on taxable income One of the lowest flat rates in the country, applying uniformly to residents and nonresidents — the PA statute explicitly names partnerships, S-corporations, and LLCs not federally taxed as corporations as subject to this rate, with no brackets to plan around. Pennsylvania registered agent (professional service) $49–$300/yr LLC Attorney service available ## How to Handle Your Pennsylvania LLC's Taxes ### If You Do It Yourself **Step 1 — Get your federal EIN before anything else.** Apply for your EIN for free directly at irs.gov — a purely federal application with no Pennsylvania-specific step. **Step 2 — Confirm your default federal tax classification.** A single-member LLC defaults to a disregarded entity (Schedule C); a multi-member LLC defaults to partnership taxation (Form 1065 plus Schedule K-1 for each member). Neither requires a separate election — this is automatic unless you file Form 8832 or Form 2553 to change it. **Step 3 — Register with the Pennsylvania Department of Revenue if required for state income tax withholding or estimated payments.** One of the lowest flat rates in the country, applying uniformly to residents and nonresidents — the PA statute explicitly names partnerships, S-corporations, and LLCs not federally taxed as corporations as subject to this rate, with no brackets to plan around. **Step 4 — Register for sales tax if you sell taxable goods or services.** File myPATH online registration with the Pennsylvania Department of Revenue (myPATH) at mypath.pa.gov, No separate fee cited beyond standard business registration fee. Registration is handled entirely through the Department of Revenue's myPATH portal. **Step 5 — Register for payroll/reemployment tax the moment you hire your first employee.** The moment you hire your first employee, register with the Pennsylvania Department of Labor & Industry (L&I). The 2026 new-employer UI rate ranges roughly 3.822%–10.5924% depending on industry, applied to a taxable wage base of $10,000. Uniquely, Pennsylvania also requires employee-side UI withholding of 0.07% of gross wages — one of the only states that taxes employees directly for unemployment insurance, and easy to miss when setting up payroll for the first time. **Step 6 — Set up quarterly estimated tax payments.** If you expect to owe $1,000 or more in combined federal and Pennsylvania tax for the year, both the IRS and the Department of Revenue expect quarterly estimated payments covering income tax and federal self-employment tax on your LLC profit. **Step 7 — File your Annual Report every Pennsylvania deadline.** Annual Report is due September 30 each year with the Pennsylvania Department of State, Bureau of Corporations, $7 fee. Missing it triggers No penalty through 2026 (transition grace period); starting 2027, a 6-month grace window applies. **Step 8 — Decide whether an S-Corp election makes sense once your LLC is consistently profitable.** Because Pennsylvania's personal income tax is a flat 3.07% with no bracket escalation, the S-Corp election calculus here is purely about federal self-employment/FICA tax savings — there's no state-rate-escalation incentive the way there is in a graduated-bracket state like New York or Oregon. One added wrinkle: Pennsylvania does not allow the federal QBI-style pass-through deductions at the state level, so the state tax base for LLC owners tends to be broader than the federal base. **Step 9 — Watch for Pennsylvania-specific tax traps.** The brand-new (2025) annual Annual Report requirement catches a lot of longtime Pennsylvania LLC owners off guard, since the state previously only required a filing once per decade — many still assume they have years before anything is due. The employee-paid UI withholding is another commonly missed detail when setting up payroll, since most states don't require it from the employee side at all. **Step 10 — Keep business and personal finances completely separate.** Commingling funds is the single biggest reason courts pierce the LLC liability shield, and it also makes tax preparation far more error-prone. Run all business income and expenses through a dedicated business bank account and keep receipts. Ready to Launch Your Business in Pennsylvania?Follow our fast, easy process to get started right now.[Start My Business](https://app.llcattorney.com/formation?intake_type=formation) ### If LLC Attorney Does It for You 1. Submit your information at llcattorney.com — entity classification, expected revenue, and whether you'll be hiring employees or collecting sales tax. 2. LLC Attorney obtains your EIN, registers you with the Pennsylvania Department of Revenue and Pennsylvania Department of Revenue (myPATH) as needed, and sets up your compliance calendar for Annual Report. 3. Receive reminders before every deadline through your client portal, plus access to flat-fee attorney consultations (no retainer) when an S-Corp election or multi-state question needs a licensed professional's judgment call. ## When Should You Talk to a Tax Professional About Your Pennsylvania LLC? Pennsylvania's tax picture is simple at the state-income-tax level, but a CPA is worth consulting when confirming your PA S-corp treatment mechanic (whether REV-976 applies to your situation), when setting up payroll for the first time given the unusual employee-side UI withholding, or once 2027 enforcement of the new Annual Report requirement begins and you need to make sure you haven't fallen behind. ## What You Actually Get With LLC Attorney's Pennsylvania Compliance Service Pennsylvania's new annual filing requirement is easy to miss precisely because it replaced a filing most owners only thought about once a decade. LLC Attorney's Pennsylvania service makes sure the new September 30 deadline is on your calendar well before 2027 enforcement begins. - EIN obtained for you at no extra charge. - State tax and sales tax registration handled as part of formation, starting at $49. - An ongoing compliance subscription (available through an ongoing compliance subscription — contact LLC Attorney for current pricing) tracks every Pennsylvania deadline — Annual Report, and registered agent renewal. - Access to professionally trained Business Success Advisors at no charge, plus flat-fee attorney consultations (no retainer) for S-Corp election analysis and multi-state nexus questions. Pennsylvania's flat 3.07% rate is simple, but its brand-new annual filing requirement is not something to rediscover the hard way — LLC Attorney keeps that deadline current every year. ## Get Your Pennsylvania LLC's Taxes Set Up Correctly Getting your EIN, tax registrations, and compliance calendar right from day one prevents expensive corrections later. LLC Attorney's Pennsylvania formation service starts at $49, and an ongoing compliance subscription (available through an ongoing compliance subscription — contact LLC Attorney for current pricing) keeps you ahead of every deadline after that. See our [full pricing](/pricing) for all service tiers. Ready to Launch Your Business in Pennsylvania?Follow our fast, easy process to get started right now.[Start My Pennsylvania LLC](https://app.llcattorney.com/formation?intake_type=formation) ## Frequently Asked Questions ### Does my Pennsylvania LLC have to pay franchise tax? ![icon](/_next/image?url=%2Fimages%2Ficons%2FfaqPlus.png&w=128&q=75) No. Pennsylvania's Capital Stock/Franchise Tax was fully repealed for tax years after 2015. A default Pennsylvania LLC owes no entity-level income tax at all — profit flows through untouched to the owners' PA-40 returns, taxed at the flat 3.07% personal rate. ### Do I need to collect sales tax in Pennsylvania? ![icon](/_next/image?url=%2Fimages%2Ficons%2FfaqPlus.png&w=128&q=75) Only if you sell taxable tangible personal property or enumerated services in Pennsylvania. Register through the Department of Revenue's myPATH portal, then collect the 6% state rate plus applicable local add-ons — Philadelphia adds 2% (8% combined) and Allegheny County adds 1% (7% combined); all other counties stay at 6%. ### What is the Pennsylvania Annual Report and when is it due? ![icon](/_next/image?url=%2Fimages%2Ficons%2FfaqPlus.png&w=128&q=75) As of 2025, Pennsylvania requires an Annual Report every year, due September 30, for a $7 fee — replacing the old Decennial Report that only came due once per decade. Through 2026, the state is running a grace period with no penalties for a missed filing. ### What happens if I miss a Pennsylvania LLC tax or filing deadline? ![icon](/_next/image?url=%2Fimages%2Ficons%2FfaqPlus.png&w=128&q=75) Through 2026, there's no penalty for missing the September 30 Annual Report deadline, since Pennsylvania is running a transition grace period. Starting in 2027, a missed deadline triggers a 6-month grace window, after which the Department of State administratively dissolves the LLC — reinstatement then requires a $35 fee plus $15 per missed report. ### Should my Pennsylvania LLC elect S-Corp taxation? ![icon](/_next/image?url=%2Fimages%2Ficons%2FfaqPlus.png&w=128&q=75) Since Pennsylvania's personal income tax is a flat 3.07% with no bracket escalation, an S-Corp election here is purely a federal self-employment tax play — there's no additional state-level incentive the way there is in states with graduated brackets. Pennsylvania generally follows the federal S election automatically, with REV-976 used only to opt out (uncommon). ### How is a single-member LLC taxed in Pennsylvania? ![icon](/_next/image?url=%2Fimages%2Ficons%2FfaqPlus.png&w=128&q=75) A single-member Pennsylvania LLC defaults to a disregarded entity for federal tax purposes — you report income on Schedule C and pay self-employment tax via Schedule SE. Pennsylvania adds its flat 3.07% income tax on top at the personal level, with no separate entity-level filing. ### I operate in multiple states — which state's taxes apply to my LLC? ![icon](/_next/image?url=%2Fimages%2Ficons%2FfaqPlus.png&w=128&q=75) If your LLC does business in a state other than the one it's formed in — an office, employees, inventory, or significant sales there — you may have created nexus requiring registration and tax obligations in that state too. This is fact-specific and worth a conversation with a tax professional if you operate in multiple states. ### How much will I actually pay in taxes on my Pennsylvania LLC? ![icon](/_next/image?url=%2Fimages%2Ficons%2FfaqPlus.png&w=128&q=75) For a typical Pennsylvania LLC with in-state owners and no employees: a flat 3.07% state income tax on your share of profit, no franchise tax, just the new $7 Annual Report, plus federal income tax and 15.3% federal self-employment tax (up to the $184,500 Social Security wage base for 2026). Add 6%–8% sales tax only if you sell taxable goods or services. ### Does LLC Attorney help with LLC tax compliance? ![icon](/_next/image?url=%2Fimages%2Ficons%2FfaqPlus.png&w=128&q=75) Yes. LLC Attorney's ongoing compliance subscription tracks your Pennsylvania filing deadlines, handles your Annual Report, and connects you with flat-fee attorney consultations (no retainer) when a tax question needs a licensed professional's judgment call. ## Learn More About Pennsylvania - [Pennsylvania LLC Formation](/states/pa/llc-formation-pennsylvania) - [Pennsylvania Registered Agent](/states/pa/registered-agent-pennsylvania)