60,000 Philadelphia households will have the ability to receive refund
PHILADELPHIA – Councilmember Allan Domb (At Large) today introduced legislation that would allow about 60,000 Philadelphia households living in poverty to be reimbursed annually for the amount of Wage Tax they pay to the city.
Under Councilmember Domb’s legislation, the current reimbursement amount of half a percent would be increased starting next year to 2.36 percent, which is the city’s portion of the Wage Tax rate. This would allow a family of four earning an income of $34,250 to receive about $810 annually.
“We want to provide struggling families with any amount of relief in order to help with their financial needs,” said Councilmember Domb. “The proposed rate increase would quadruple the current refund amount. Any little bit helps and we have the authority in city council to provide the maximum refund possible.”
A breakdown of reimbursement amounts for families includes:
|Income Limit||Rebate Amount|
|Married, filing jointly||$15,250.00||$360.14|
|Married + 1 dependent||$24,750.00||$584.50|
|Married + 2 dependents||$34,250.00||$808.85|
|Married + 3 dependents||$43,750.00||$1,033.20|
|Married + 4 dependents||$53,250.00||$1,257.55|
|Married + 5 dependents||$62,750.00||$1,481.90|
|Married + 6 dependents||$72,250.00||$1,706.26|
For single parent households, the rebate amount is about $153 less in relation to the breakdown by dependent in the above table.
By Fiscal Year 2024, if the PICA portion of the Wage Tax is removed, the total reimbursement rate would be increased to a full 3.84 percent. This would allow a family of four to be reimbursed more than $1,300.
“We recently learned Philadelphia’s poverty rate dipped below 25 percent for the first time in over a decade,” said Councilmember Domb. “We need to seize this opportunity and continue to fuel the progress. There’s no reason we still have the highest rate among the most populated U.S. cities.”
“We need to provide the resources to remove families from poverty and allow them to gain financial independence,” said Councilmember Domb.
The City of Philadelphia already has a process through the Department of Revenue to oversee an expanded Wage Tax Refund program. The proposed legislation would amend the “Refunds and Forgiveness for Poverty Income” section of the Philadelphia Code by revising the tax rate.
“The framework is already in place and we would be able to implement this starting next year,” said Councilmember Domb.
“I encourage my colleagues to support this legislation and help our city gain significant traction to moving families out of poverty.”