Pennsylvania 1099 taxes: a 2026 guide for the self-employed
Keeper StaffKeeper is a delightfully smart tax filing software that's especially useful for people with 1099 contracting and freelance income. Our blog breaks down IRS guidance with real-world examples and analysis by tax professionals — empowering taxpayers to save money and take control of their finances.
Krislyn ChanKrislyn is Chief Growth Officer at Keeper. At Keeper, she strives to make expert-level tax strategies that used to require a traditional CPA accessible to all. Prior to Keeper, she was at Curology, where she helped bring custom, prescription-grade skincare out of the dermatologist's office to millions of faces.
Key takeaways
- 1099 income in Pennsylvania is subject to three taxes: 15.3% federal self-employment tax, 10% to 37% federal income tax, and a flat 3.07% Pennsylvania income tax. Most cities and townships add a local earned income tax.
- Set aside 25–30% of your profit in a high-yield savings account, so the money earns interest until your tax payments are due. For a single filer with no other income, total tax runs from 21.6% of profit at $40,000 to 29.8% at $200,000, before local tax.
- Pennsylvania taxes your whole profit at 3.07%. There’s no standard deduction, no personal exemption, and no deduction for half of your self-employment tax.
- Pennsylvania estimated payments start at $14,000 of income. For 2026, you make quarterly estimated tax payments once you expect $14,000 or more of income with no tax taken out, up from $11,000 in 2025.
- Your local earned income tax is separate. You pay it to your local tax collector, often with its own quarterly payments. It’s 3.735% in Philadelphia and 3% in Pittsburgh.
How much tax do 1099 workers pay in Pennsylvania?
These tables show estimated 2026 tax on self-employment profit, the amount left after business expenses. They assume this is your only income, you take the standard deduction, and you have no kids or tax credits.
Single filer, 2026
| 1099 profit | Total tax | % of profit | Self-employment tax | Federal income tax | Pennsylvania income tax |
|---|---|---|---|---|---|
| $40,000 | $8,655 | 21.6% | $5,652 | $1,775 | $1,228 |
| $60,000 | $13,879 | 23.1% | $8,478 | $3,559 | $1,842 |
| $80,000 | $19,103 | 23.9% | $11,304 | $5,344 | $2,456 |
| $100,000 | $25,435 | 25.4% | $14,130 | $8,235 | $3,070 |
| $150,000 | $42,213 | 28.1% | $21,194 | $16,413 | $4,605 |
| $200,000 | $59,571 | 29.8% | $28,234 | $25,196 | $6,140 |
Married filing jointly, one self-employed spouse, 2026
| 1099 profit | Total tax | % of profit | Self-employment tax | Federal income tax | Pennsylvania income tax |
|---|---|---|---|---|---|
| $40,000 | $7,278 | 18.2% | $5,652 | $398 | $1,228 |
| $60,000 | $12,205 | 20.3% | $8,478 | $1,885 | $1,842 |
| $80,000 | $17,310 | 21.6% | $11,304 | $3,550 | $2,456 |
| $100,000 | $22,534 | 22.5% | $14,130 | $5,335 | $3,070 |
| $150,000 | $35,595 | 23.7% | $21,194 | $9,795 | $4,605 |
| $200,000 | $50,846 | 25.4% | $28,234 | $16,472 | $6,140 |
How Pennsylvania taxes 1099 income
If you’re a freelancer, independent contractor, gig worker, or solo business owner in Pennsylvania, your net profit (1099 income minus business expenses) is taxed three ways, plus a local tax in most places:
- Federal self-employment tax: 15.3% on most of your profit (92.35% of it). That’s 12.4% for Social Security, on earnings up to $184,500 in 2026, plus 2.9% for Medicare with no cap. It replaces the payroll taxes an employer would split with you. Estimate it with the self-employment tax calculator.
- Federal income tax: 10% to 37% on what’s left after three deductions: the $16,100 standard deduction ($32,200 married filing jointly), half of your self-employment tax, and the 20% QBI deduction.
- Pennsylvania income tax: a flat 3.07% on your net profit, with no deductions on top. You report it on Form PA-40 with Schedule C.
What’s different about Pennsylvania
- A low rate on almost all of your profit. Pennsylvania has no standard deduction or personal exemption, so the 3.07% applies from the first dollar.
- No deduction for half of your self-employment tax. The IRS lets you subtract half of it from your income. Pennsylvania figures your business profit under its own rules and doesn’t, so at $80,000 of profit you pay Pennsylvania tax on the full $80,000.
- No QBI deduction. The IRS lets you deduct up to 20% of your business profit. Pennsylvania doesn’t. At $80,000 of profit, that’s $11,650 you deduct on your federal return but still pay Pennsylvania tax on.
- A business loss can’t lower the tax on your paycheck. Pennsylvania taxes each type of income separately. If your side business loses money, that loss can’t offset your wages, the way it can on your federal return.
- Local earned income tax on top. Most Pennsylvania municipalities and school districts charge a tax on wages and business profit. More on that below.
Even with no deductions, Pennsylvania’s low rate keeps a self-employed person at $80,000 at $19,103: about $157 less than in California and $2,456 more than in Texas, which has no income tax. That’s before local tax.
Pennsylvania local earned income tax
Most Pennsylvania residents pay a local earned income tax (EIT) to their municipality and school district, on wages and on business net profit. It’s figured separately from your state tax and paid to your local tax collector, not the Department of Revenue.
- Philadelphia: 3.735% of net profits for residents in 2026 (3.425% if you live elsewhere and do business in the city), through the Net Profits Tax. Philadelphia businesses may also owe the Business Income & Receipts Tax, which earns a credit against the Net Profits Tax.
- Pittsburgh: 3% for residents (1% city plus 2% school district).
- Most other places: about 1% to 2%. Look up your exact rate with your local tax collector.
- Local services tax: many municipalities also charge a flat tax of up to $52 a year on people who work there.
Self-employed people usually make quarterly local estimated payments too, since nothing is withheld. Your collector sets the forms and due dates.
Example: Pennsylvania tax on $80,000 of 1099 income
Here’s the math for a single self-employed person in Pennsylvania with $80,000 of profit and no other income, before local tax.
| Step | Amount |
|---|---|
| Self-employment tax: $80,000 × 92.35% × 15.3% | $11,304 |
| $80,000 minus half of self-employment tax | $74,348 |
| Income the IRS taxes: $74,348 minus the $16,100 standard deduction and $11,650 QBI deduction | $46,599 |
| Federal income tax | $5,344 |
| Pennsylvania income tax: $80,000 × 3.07% | $2,456 |
| Total 2026 tax | $19,103 (23.9%) |
Self-employment tax is the biggest piece. Every dollar you write off as a business expense lowers all three taxes, since your self-employment tax, federal income tax, and Pennsylvania income tax are all based on your profit after expenses. It lowers your local earned income tax too.
What tax write-offs can I claim?
How to lower your Pennsylvania 1099 tax bill
At $80,000 of profit, every $1,000 of business expenses you deduct cuts about $261 from your total tax. Common write-offs for self-employed people in Pennsylvania include:
- Your phone and internet, for the share you use for work
- Car expenses, using a set rate per mile or your actual costs (compare the two)
- A home office, if you use part of your home regularly and only for work (estimate yours)
- Software, equipment, and supplies you buy for your business
- Health insurance premiums you pay as a self-employed person
- Retirement contributions to a SEP-IRA or Solo 401(k)
Most of these are small purchases spread across a year of bank and card statements, which is where they get missed. See the full list of tax write-offs for self-employed people.
Track and claim every eligible deduction with Keeper
Keeper scans your accounts for write-offs and files your return — with tax pros reviewing every one.
Try it freePennsylvania estimated tax payments
If you expect $14,000 or more of income in 2026 with no Pennsylvania tax taken out, which works out to $430 of tax, make estimated payments to the Pennsylvania Department of Revenue online or with Form PA-40 ES. That threshold rises each year: $11,000 in 2025, $14,000 in 2026, and $17,000 in 2027. Each payment is a quarter of your Pennsylvania tax:
| Payment | Share of your Pennsylvania tax | Due date |
|---|---|---|
| 1st | 25% | April 15, 2026 |
| 2nd | 25% | June 15, 2026 |
| 3rd | 25% | September 15, 2026 |
| 4th | 25% | January 15, 2027 |
- Federal payments are separate: you pay the IRS on the same four dates with Form 1040-ES.
- To avoid a penalty for paying too little, pay at least 90% of this year’s Pennsylvania tax, or 3.07% of last year’s Pennsylvania taxable income if you lived in Pennsylvania all of last year. There’s no 110% rule for higher earners.
- Local earned income tax is paid separately to your local tax collector.
Get your payment amounts with the Pennsylvania quarterly tax calculator.
Should you form an LLC or S corp in Pennsylvania?
You don’t need one to work as an independent contractor. If you work for yourself without forming a business, you report 1099 income on Schedule C, part of your regular tax return, and pay the taxes above. Pennsylvania is cheap to set one up:
- LLCs cost $125 to form and $7 a year for the annual report, which started in 2025.
- S corps can make sense once your profit is around $80,000, when the self-employment tax savings get significant. You pay yourself a reasonable salary and take the rest as profit payouts (distributions) that aren’t subject to self-employment tax.
Run the numbers for your income to see what you’d save.
Do self-employed people in Pennsylvania charge sales tax?
Usually not. Most professional services, like writing, design, consulting, and bookkeeping, aren’t taxable in Pennsylvania. Physical goods, prewritten software, and digital products are, at 6% (7% in Allegheny County and 8% in Philadelphia).
9 sources
- 2026 REV-413(I): instructions for estimating Pennsylvania personal income tax · pa.gov
- 2026 REV-414(I): Pennsylvania estimated tax worksheet · pa.gov
- Pennsylvania personal income tax guide: pass-through entities · pa.gov
- Philadelphia Net Profits Tax · phila.gov
- City of Pittsburgh taxes · pittsburghpa.gov
- Department of State fees and payments · pa.gov
- Annual reports (Department of State) · pa.gov
- IRS releases tax inflation adjustments for tax year 2026 · irs.gov
- Contribution and benefit base · ssa.gov
This article is for informational purposes only and isn’t tax, legal, or financial advice. Tax rules change and depend on your situation, so talk to a tax professional about yours.
