HB 1850 — An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, providing for teacher tax credit.

PRINTER'S NO.   2286

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 1850
                                               Session of
                                                 2025

     INTRODUCED BY NEILSON, McNEILL, FREEMAN, GUZMAN, WAXMAN, CEPEDA-
        FREYTIZ, POWELL, GIRAL, HILL-EVANS, SANCHEZ, K.HARRIS,
        DOUGHERTY, GALLAGHER, SHUSTERMAN, BOROWSKI, MERSKI, CIRESI
        AND PARKER, SEPTEMBER 5, 2025

     REFERRED TO COMMITTEE ON FINANCE, SEPTEMBER 9, 2025


                                    AN ACT
 1   Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
 2      act relating to tax reform and State taxation by codifying
 3      and enumerating certain subjects of taxation and imposing
 4      taxes thereon; providing procedures for the payment,
 5      collection, administration and enforcement thereof; providing
 6      for tax credits in certain cases; conferring powers and
 7      imposing duties upon the Department of Revenue, certain
 8      employers, fiduciaries, individuals, persons, corporations
 9      and other entities; prescribing crimes, offenses and
10      penalties," providing for teacher tax credit.
11      The General Assembly of the Commonwealth of Pennsylvania
12   hereby enacts as follows:
13      Section 1.    The act of March 4, 1971 (P.L.6, No.2), known as
14   the Tax Reform Code of 1971, is amended by adding an article to
15   read:
16                             ARTICLE XVII-B.1
17                            TEACHER TAX CREDIT
18   Section 1701-B.1.    Scope of article.
19      This article relates to teacher tax credits.
20   Section 1702-B.1.    Definitions.
21      The following words and phrases when used in this article
 1   shall have the meanings given to them in this section unless the
 2   context clearly indicates otherwise:
 3      "Certified teacher."       A teacher who, during any portion of
 4   the taxable year for which the tax credit is being sought, was
 5   certified as a teacher by the Commonwealth and was employed as a
 6   teacher in a public, nonpublic or charter school.
 7      "Classroom expenses and supplies."       The term includes books,
 8   supplies, computers and related equipment, including related
 9   software and services, other equipment and supplementary
10   materials.
11      "Department."     The Department of Revenue of the Commonwealth.
12      "Tax credit."     The teacher tax credit established under this
13   article.
14      "Taxpayer."     An individual subject to tax under Article III.
15   Section 1703-B.1.    Tax credit for teachers.
16      A taxpayer who is a certified teacher and incurs business
17   expenses for the purchase of classroom expenses and supplies in
18   a taxable year may apply for a tax credit.
19   Section 1704-B.1.    Eligibility.
20      (a)     Determination of eligibility.--In order to determine
21   eligibility for the tax credit, the Department of Education
22   shall annually provide to the department a list of all
23   individuals who were certified teachers during the taxable year.
24      (b)     Ineligibility.--
25            (1)   A taxpayer shall be ineligible for the tax credit
26      unless the department verifies that the taxpayer's name
27      appears on the list provided by the Department of Education
28      for the taxable year in which the tax credit is being sought.
29            (2)   A taxpayer shall be ineligible for the tax credit if
30      the taxpayer has claimed a deduction for unreimbursed

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 1      business expenses related to classroom education under
 2      Article III for the taxable year in which the tax credit is
 3      sought. This paragraph shall not apply if any part of the
 4      amount of unreimbursed business expenses claimed is unrelated
 5      to classroom expenses and supplies.
 6   Section 1705-B.1.   Carryover, carryback, sale, and assignment of
 7               tax credit.
 8      A taxpayer is not entitled to carry forward, carry back, sell
 9   or assign all or a portion of a tax credit granted to the
10   taxpayer under this article.
11   Section 1706-B.1.   Amount of credit.
12      The amount of the tax credit shall be equal to 50% of the
13   amount of the Federal tax deduction claimed by the taxpayer
14   under 26 U.S.C. § 62(a)(2)(D) (relating to adjusted gross income
15   defined).
16   Section 1707-B.1.   Application.
17      A taxpayer may apply for a tax credit under this article in a
18   manner prescribed by the department.
19   Section 1708-B.1.   Administration.
20      The department shall promulgate rules and regulations to
21   administer the provisions of this article.
22      Section 2.   This act shall apply to taxable years commencing
23   after December 31, 2026.
24      Section 3.   This act shall take effect immediately.




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