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Personal income tax. Pennsylvania has a flat tax rate of 3.07% on individual income, with no personal exemptions.
Pennsylvania is a fairly tax-friendly state. Most retirement income â Social Security, federal, state and local pension income â is not taxed. And interest, dividends and capital gains are subject only to a tax at 3.07%. But at 10.3%, the Keystone Stateâs overall tax burden is fairly high compared with most other tax-friendly states.