PRINTER'S NO. 59
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
83
Session of
2015
INTRODUCED BY GREENLEAF, TEPLITZ, FONTANA, BLAKE, TARTAGLIONE,
SCHWANK AND RAFFERTY, JANUARY 14, 2015
REFERRED TO FINANCE, JANUARY 14, 2015
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," in personal income tax, further providing for
classes of income.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 303(a)(1) of the act of March 4, 1971
(P.L.6, No.2), known as the Tax Reform Code of 1971, amended
November 29, 2006 (P.L.1613, No.182), is amended to read:
Section 303. Classes of Income.--(a) The classes of income
referred to above are as follows:
(1) Compensation.
(i) All salaries, wages, commissions, bonuses and incentive
payments whether based on profits or otherwise, fees, tips and
similar remuneration received for services rendered whether
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directly or through an agent and whether in cash or in property
except income derived from the United States Government for
active duty outside the Commonwealth of Pennsylvania as a member
of its armed forces and income from the United States Government
or the Commonwealth of Pennsylvania for active State duty for
emergency within or outside the Commonwealth of Pennsylvania,
including duty ordered pursuant to 35 Pa.C.S. Ch. 76 (relating
to Emergency Management Assistance Compact).
(ii) Compensation of a cash-basis taxpayer shall be
considered as received if the compensation is actually or
constructively received for Federal income tax purposes as
determined consistent with the United States Treasury
regulations and rulings under the Internal Revenue Code of 1986,
as amended, except that, for purposes of computing tax under
this article:
(A) Amounts lawfully deducted, not deferred, and withheld
from the compensation of employes shall be considered to have
been received by the employe as compensation at the time the
deduction is made.
(B) Contributions to an employes' trust, pooled fund or
other arrangement which is not subject to the claims of
creditors of the employer made by an employer on behalf of an
employe or self-employed individual at the election of the
employe or self-employed individual pursuant to a cash or
deferred arrangement or salary reduction agreement shall be
deemed to have been received by the employe or individual as
compensation at the time the contribution is made, regardless of
when the election is made or a payment is received.
(C) Any contribution to a plan by, on behalf of or
attributable to a self-employed person shall be deemed to have
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been received at the time the contribution is made.
(D) Employer contributions to a Roth IRA custodial account
or employe annuity shall be deemed received, earned or acquired
only when distributed, when the plan fails to meet the
requirements of section 408A of the Internal Revenue Code of
1986 (26 U.S.C. § 408A), as amended, or when the plan is not
operated in accordance with such requirements.
(E) Employe contributions to an employes' trust or pooled
fund or custodial account or contract or employe annuity shall
not be deducted or excluded from compensation.
(iii) For purposes of determining when deferred compensation
of employes other than employes of exempt organizations and
State and local governments is required to be included in
income, the following apply:
(A) The rules of sections 83 and 451 of the Internal Revenue
Code of 1986 (26 U.S.C. §§ 83 and 451), as amended, shall apply.
(B) The rules of section 409A of the Internal Revenue Code
of 1986 (26 U.S.C. § 409A), as amended, shall apply.
(iv) For purposes of determining when deferred compensation
of employes of exempt organizations and State and local
governments is required to be included in income, the following
apply:
(A) The rules of sections 83, 451 and 457 of the Internal
Revenue Code of 1986, as amended, shall apply.
(B) The rules of section 409A of the Internal Revenue Code
of 1986, as amended, shall apply.
(v) Notwithstanding any other provision of this act,
unreimbursed child and dependent care expenses which are used in
calculating the Federal child and dependent care credit in
accordance with section 21 of the Internal Revenue Code of 1986
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(Public Law 99-514, 26 U.S.C. § 1 et seq.) shall be excluded
from the definition of the term " compensation " provided that the
taxpayer submits a copy of the requisite Federal tax form on
which the child and dependent care expenses are claimed when
filing the tax return under section 330.
* * *
Section 2. This act shall apply to the taxable years
beginning after December 31, 2015.
Section 3. This act shall take effect immediately.
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