The City of Philadelphia has announced a policy clarification to support businesses that will be required to file and pay the Business Income & Receipts Tax (BIRT) for the first time for Tax Year 2025 (due in April 2026). Businesses that were not required to file or pay BIRT in the past three years, but will have to begin paying in response to a legal challenge to the $100,000 Business Income & Receipts Tax (BIRT) exemption, will be treated as “new businesses” under the City’s policy.
How does it work
If your business was not required to file a return in the last three years, since 2022, because your sales in Philadelphia were under $100,000, you will not be required to make an estimated payment when you file your taxes in 2026 – you will only have to pay for 2025 activity.
In 2027, when you file your next return, you will have the choice to pay your second-year estimate in quarterly installments or in full, in addition to the 2026 liability.
In 2028, when you file your third return, you will be required to make a full estimated payment that is equal to the amount of the prior year tax due.
Check out the following chart to help see how this works
| Year of Business | Year | Due Dates / Filing Requirements for BIRT |
|---|---|---|
| 1 | 2025 | Do business, make sales! |
| 2 | 2026 | First tax return and payment due April 15, 2026 (for 2025 activity) No estimated payment due. |
| 3 | 2027 | Second tax return and payment due April 15, 2027 (for 2026 activity) Then, businesses have two options:
|
| 4 | 2028 | Third tax return due April 15, 2028 – (for 2027 activity). Additional payment required if underestimated. Pay a 100% estimate towards 2028 by April 15, 2028. |
The City has allowed new businesses, those who have never filed a tax return in Philadelphia, to bypass their first estimated payment since 2018. Revenue requires all other businesses to make a 100% estimated payment for the current year at the time they are filing the prior year’s tax return.
As always, the Department of Revenue recommends you work with a trusted tax professional who understands Philadelphia taxes. Stay tuned for future announcements about free tax preparation services and expanded grant programs coming from the Philadelphia Department of Commerce. Sign up for our newsletter to get the latest information!
