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Payments, assistance & taxes

Net Profits Tax

Due date

April 15 for previous year returns and

June 15 for the second estimate of each year

Tax rate

For Tax Year 2022:

  • 3.79% of net profits (Resident)
  • 3.44% of net profits (Non-resident)

 

IMPORTANT UPDATE: From now on, please complete online returns and payments for this tax on the Philadelphia Tax Center. For help getting started, and answers to common questions, you can see our online tax center guide. You can choose to continue filing paper returns for this tax.
Where do you mail a return? It depends if you’re just filing, paying, or requesting a refund. Refer to the ‘How to Pay’ Section below.

Who pays the tax

The Net Profits Tax (NPT) is imposed on the net profits from the operation of a trade, business, profession, enterprise, or other activity by:

  • Philadelphia residents, even if their business is conducted outside of Philadelphia.
  • Non-residents who conduct business in Philadelphia.

Businesses must pay the Net Profits Tax if they are organized as:

  • Individuals (sole proprietors)
  • Partnerships
  • Associations
  • Limited liability companies (LLCs)
  • Estates or trusts

The rental of property, in most cases, is considered the operation of a business.

A return must be filed even if a loss is incurred. If no return is filed, non-filer penalties are imposed.

Note that the NPT does not take the place of the net income portion of the Business Income & Receipts Tax (BIRT). However, you may be able to take a credit on the NPT based on the amount of tax owed from your BIRT.

If you must amend an NPT return, complete a new tax return with the updated amount. Place an “X” in the box that indicates the form is an amended return.

Important dates

Paperwork for the Net Profits Tax is filed annually, but payments for the current year’s estimated tax are due twice per year. The first payment is due April 15 of each year, and the second installment is due by June 15. Each payment must equal 25% of the prior year’s Net Profits Tax.

You must file a return even if your business has an overall loss and no tax is due.

Tax rates, penalties, & fees

How much is it?

For Tax Year 2022:
3.79% of net profits (Resident)
3.44% of net profits (Non-resident)

For Tax Year 2021:
3.8398% of net profits (Resident)
3.4481% of net profits (Non-resident)

For Tax Year 2020:
3.8712% for Philadelphia residents
3.5019% for non-residents

For Tax Year 2019:
3.8712% for Philadelphia residents
3.4481% for non-residents

For Tax Year 2018:
3.8809% for Philadelphia residents
3.4567% for non-residents

For Tax Year 2017:
3.8907% for Philadelphia residents
3.4654% for non-residents


What happens if you don't pay on time?

If you don’t pay on time, interest and penalties will be added to the amount you owe.

For more information about rates, see our Interest, penalties, and fees page.

There are no extensions for tax payments, but you can apply for an extension to file your return.

You can get a 60-day extension (until June 15) by filing an extension payment coupon. You must visit our payments website to print a customized extension payment coupon.

If you have obtained a federal six-month extension, you will be granted additional time to file the NPT. The extension period to file the return cannot exceed the end date of the federal extension period.

Filing extension

Need more time to prepare and file your Philadelphia Net Profits Tax (NPT) returns?

We will automatically grant you an extension of time to file up to 60 days from the April due date or the original due date of the NPT return. When this initial 60-day extension period ends, we may grant you an additional extension time if the Internal Revenue Service (IRS) grants you an extension of time for filing the federal return. In effect, we will grant you a matching extension for filing the BIRT return up to the termination date of the federal extension period.  

Please be aware that if granted an extension period to file your NPT return, it cannot exceed the end date of the federal extension period of up to six months from the original IRS filing due date.  

There’s no specific filing extension form for Philadelphia’s NPT. Filing an extension payment voucher either by paper or online serves the dual functions of filing an extended return and making the extension payment.

Please understand that an extension of time to file your returns does not grant you any extension of time to pay your taxes. Payments made after the original due date are subject to interest and penalty charges. See our Interest, penalties, and fees page for more information about rates. 

If you have an overpayment or tax credit, which you do not wish to be refunded, please contact taxpayer services at (215) 686-6600 to request that it be applied to your desired tax period. You can also apply for credits online through the Philadelphia Tax Center:

  1. Log into your Tax Center profile.
  2. Find the BIRT panel under the “Summary” tab. Select “Apply for credit programs” on the right side of this same screen.
  3. Follow the onscreen prompts to complete the process.

Discounts & exemptions

Are you eligible for a discount?

To qualify to pay the reduced income-based rates for Net Profits Tax, you must be eligible for Pennsylvania’s Tax Forgiveness Program. This program is available to working families who have paid income tax throughout the year and meet certain income eligibility requirements based on household size and marital status.

Reduced rates

The reduced income-based rate for residents and non-residents is 1.5%.

Reduced rates for residents
For Tax year 2021 = 1.5000% (0.015000)
For Tax year 2020 = 1.5000% (0.015000)
For Tax year 2019 = 3.3712% (0.033712)
For Tax year 2018 3.3809% (0.033809)

Reduced rates for non-residents
For Tax year 2021 = 1.5000% (0.015000)
For Tax year 2020 = 1.5000% (0.015000)
For Tax year 2019 2.9481% (0.029481)
For Tax year 2018 2.9567% (0.029567)

How to apply for the reduction

You must attach a completed Pennsylvania Schedule SP for the relevant tax year to your Net Profits Tax return to be eligible to receive the income-based rates. The City of Philadelphia will check to make sure your Schedule SP matches the state’s records.

Non-Pennsylvania residents who work in Philadelphia but do not file a Pennsylvania income tax return must include a signed copy of their state income tax return to be eligible for the income-based rates.


Can you be excused from paying the tax?

Corporations are exempt from the Net Profits Tax.

How to pay

File and pay online

You can file NPT returns and make payments through the Philadelphia Tax Center. Starting with payments due in April 2018 for Tax Year 2017, taxpayers who owe $5,000 or more for the Net Profits Tax are required to pay those taxes electronically.

File a return by mail

Mail your return to:

Philadelphia Dept. of Revenue
P.O. Box 1660
Philadelphia, PA 19105-1660

Pay by mail

Mail all payments with a payment coupon to:

Philadelphia Dept. of Revenue
P.O. Box 1393
Philadelphia, PA 19105-1393

Request a refund by email

Mail your return and refund request to:

Philadelphia Dept. of Revenue
P.O. Box 1137
Philadelphia, PA 19105-1137

Tax code

03

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