Does Pennsylvania tax tips and overtime?

Pennsylvania's personal income tax is fully independent of the federal base — it taxes eight enumerated classes of income at a flat rate with no federal AGI or federal taxable income starting point, so neither IRC 224 nor any other federal deduction can reach it. The PA Personal Income Tax Guide, Gross Compensation chapter, defines gross compensation to include 'salaries, wages, commissions, bonuses and incentive payments whether based on profits or otherwise, fees, tips, and similar remuneration received', and states flatly that 'For individuals, Pennsylvania law does not exempt or exclude from income, or allow a deduction for, any personal expenses, federal itemized deductions, or federal standard deductions.' Pennsylvania allows only direct unreimbursed employee business expenses. Tips therefore remain fully taxable at the PA PIT rate. No enacted Pennsylvania legislation adopting the OBBBA tip deduction was found.

Same independent-base mechanism. Overtime pay is 'wages' and thus taxable PA gross compensation, and the PA PIT Guide's Deductions and Credits chapter allows no federal standard, itemized, or above/below-the-line deductions to individuals. The federal IRC 225 deduction reduces federal taxable income only and has no channel into the PA base. Note that a state overtime tax credit has been floated in the PA legislature but I found no enacted Pennsylvania statute providing relief for overtime as of Aug. 2026 — I deliberately do not cite a bill number because I could not verify one from a legislative source.