Pennsylvania Mileage Deduction 2026: State + Local Earned Income Tax

Pennsylvania has more local tax jurisdictions than any other state. Over 2,500 municipalities and school districts levy their own earned income tax, including on self-employment income. Your mileage deduction reduces what you owe at federal, state, and local levels.

State Income Tax: 3.07% Flat

Pennsylvania's flat state income tax rate is 3.07%. Your federal Schedule C mileage deduction reduces your net self-employment income, which flows through to your PA return.

Local Earned Income Tax (EIT)

Nearly every municipality in Pennsylvania levies a local EIT on earned income. Self-employment income is included. Rates vary:

A self-employed Philadelphia resident pays three layers on their earnings: federal + 3.07% state + 3.84% city. At 15,000 business miles:

Separate Local Filing

You must file a local EIT return with your municipality's tax collector (often Berkheimer or Keystone Collections). This is a separate filing from your federal and state returns. Quarterly estimated payments are required for self-employment income: April 15, June 15, September 15, and January 15.

Employer Reimbursement

Pennsylvania does not require private employers to reimburse mileage. No state statute mandates it.

How to Track Your Miles

Keep a mileage log with the date, destination, purpose, and miles for each trip. One log covers all three filings, federal, state, and local EIT.

FAQ

Does my mileage deduction reduce the local EIT?

Yes. Most PA local tax collectors tax net self-employment profit, which is reduced by your mileage deduction on Schedule C.

How many returns do I file in Pennsylvania?

Three: federal, PA state, and local EIT. Philadelphia residents file the local return directly with the city. Others file through Berkheimer, Keystone, or their local collector.

Can W-2 employees deduct mileage in Pennsylvania?

No. The mileage deduction for W-2 employees was permanently eliminated under the One Big Beautiful Bill. Pennsylvania does not require employer reimbursement, so if your employer does not reimburse, you have no tax remedy.

Three filings, one mileage log. Start tracking free with TruMile →