Can You Claim Pennsylvania School Tax on Your Federal Tax Return?

by James Rada, Jr. ; Updated July 27, 2017

Pennsylvania property owners pay their school taxes as a property tax. This makes the school tax a legitimate deduction on Pennsylvania residents’ federal income tax returns. To claim the deduction, taxpayers need to itemize their deductions. The tax amount is recorded on Form 1040 Schedule A as a real estate tax.

Calculating the Tax

Pennsylvania uses a millage rate to calculate its property taxes. The school district in which the taxpayer’s property is located will have its assessed value multiplied by the millage rate for the school district to come up with the school tax. One mill equals 1/1000th of a dollar. If your property is worth $200,000 and the rate is 3 mills, you would divide $200,000/1,000 and multiply by 3 to get a tax owed of $600.

State School Tax

Pennsylvania does not tax real estate or personal property at a state level. This right is left to counties, municipalities and school districts and usually all three entities do it, so your property tax is actually the sum of all three millage rates. According to Bankrate.com, the millage rate cannot exceed 30 mills on the assessed value unless the courts grant special permission.

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Real Estate Tax

For the school tax to be considered a deductible real estate tax, it must be for a non-business property and based on the assessed value of the property. All of the properties in the neighborhood must have also undergone the same uniform assessment process. The proceeds from taxes must also be used by general community or governmental purposes. Under these IRS conditions, the school tax qualifies.

Taxpayer Relief Act

Since taxes can become burdensome, particularly on someone who has lived in a property for a long time and seen it increase in value, there is the Taxpayer Relief Act. This allows school districts to add earned income and net profits taxes or a personal income tax in order to lower a property owner’s property tax. This works well for senior citizens who have less income, in general, while their homes may have increased in value. By shifting some of the tax to an income tax, it lowers their tax burden.

About the Author

James Rada, Jr. was a newspaper reporter for eight years and earned 23 awards from the Maryland Delaware D.C. Press Association, Associated Press, Society of Professional Journalists, Maryland State Teachers’ Association and CNHI. He also worked for 12 years as a marketing communications writer, earning a Print Copywriter of the Year Award from the Utah Ad Federation. He holds a Bachelor of Arts in communications.

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