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    Tax Credits

    Pennsylvania Economic Development for a Growing Economy Tax Credits

    The Pennsylvania Economic Development for a Growing Economy (PA EDGE) tax credits authorized under Article XVII-L of the Tax Reform Code of 1971, as amended under Act 108 of 2022 is a collection of tax credit programs designed to attract new investment from businesses resulting in economic growth and job creation for the Commonwealth. Tax Credits for qualified taxpayers are approved by the Pennsylvania Department of Revenue.

    Overview

    The PA EDGE tax credit is limited to 20% of any of the qualified taxpayer’s qualified tax liabilities incurred in the taxable year for which the credit was approved. A qualified tax liability includes corporate net income tax, bank and trust companies shares tax, title insurance companies shares tax, insurance premiums tax, gross receipts tax, mutual thrift institutions tax and personal income tax liabilities for owners of pass-through entities receiving the credit.

    If the qualified taxpayer receiving the PA EDGE tax credit holds the credit through the end of the calendar year in which the credit was granted, the taxpayer may apply for approval to sell or assign the credit to a buyer or assignee. A buyer or assignee may offset up to 50% of its own qualified tax liability with the purchased or assigned credit. The PA EDGE tax credits must be used by the buyer or assignee in the calendar year the purchase or assignment is made. Credits may only be purchased or assigned once.

    For additional information on Pennsylvania Economic Development for a Growing Economy Tax Credits, contact the Office of Economic Development at 717-772-3896 or ra-rveconomic-dev@pa.gov.

    Programs

    Qualified Taxpayers purchasing dry natural gas for use in manufacturing petrochemicals or fertilizers at a facility in the Commonwealth will be entitled to a Local Resource Manufacturing (LRM) Tax Credit. The LRM Tax Credit will be equal to forty-seven cents per unit of dry natural gas purchased and used in manufacturing petrochemicals or fertilizers.

    Qualified Taxpayers purchasing milk for use in dairy processing at a facility in the Commonwealth will be entitled to a Pennsylvania Milk Processing (“PMP”) Tax Credit.  The PMP Tax Credit will be equal to five cents per gallon of milk purchased and produced from sources exclusively in the Commonwealth and processed at the project facility by the qualified taxpayer.

    Qualified Taxpayers purchasing clean hydrogen and natural gas for use in manufacturing at a facility in the Commonwealth will be entitled to a Regional Clean Hydrogen Hubs (“RCHH “) Tax Credit. The RCHH Tax Credit will be equal to eighty-one cents per kilogram of clean hydrogen purchased from a Regional Clean Hydrogen Hub within the Commonwealth and/or forty-seven cents per unit of natural gas that is purchased and used in manufacturing at the project facility by a qualified taxpayer.

    Qualified Taxpayers conducting semiconductor manufacturing, biomedical manufacturing or biomedical research may apply for the Semiconductor Manufacturing and Biomedical Manufacturing and Research (“SBMR”) Tax Credit. The SBMR Tax Credit may be awarded, based upon any one or more of the following: 2.5% of the initial capital investment and/or 100% of Personal Income Tax withholding (payroll) or $20,000 per job, whichever is less for each permanent job at the project facility.