What taxes does an LLC pay in Pennsylvania?
In Pennsylvania, the taxes your LLC owes depend on how it's classified for federal tax purposes and how it earns income. Pennsylvania recognizes the flexibility of LLCs, but you’ll still need to comply with several tax obligations at both the state and local levels.
Common Taxes Paid by Pennsylvania LLCs:
1. Pennsylvania Personal Income Tax (for pass-through entities)
Most LLCs are taxed as pass-through entities, meaning profits flow directly to the members.
- Rate: 3.07% flat state income tax
- Who pays it: The individual members report profits on their personal PA income tax returns.
2. Corporate Net Income Tax (for LLCs taxed as C Corporations)
If your LLC elects to be taxed as a C Corporation, it will pay corporate-level taxes.
- Rate: 4.99% in 2025
- Filing: Required annually using the PA Corporate Tax Report (RCT-101)
3. Annual Registration for Certain LLCs
While most Pennsylvania LLCs do not pay an annual state fee, LLCs providing restricted professional services (like legal, medical, or accounting) must file a Certificate of Annual Registration.
- Fee: $560 per member per year
- Due: April 15
4. Local Taxes
Local governments may impose additional taxes, such as:
- Business Privilege Tax
- Local Earned Income Tax
- Mercantile Tax
Check with your municipality or school district for specifics.
5. Employer Taxes (if hiring workers)
If your LLC has employees, you must comply with:
- State income tax withholding
- Unemployment Compensation Tax
- Local payroll-related taxes
Summary
A Pennsylvania LLC may face personal income tax, corporate income tax (if elected), professional registration fees, local levies, and employer obligations. For accurate planning and compliance, businesses often work with service providers like One IBC USA to streamline tax strategy and filings.
