It's a peculiar form of income tax, but it is an income tax. Can it be deducted? If so, how?
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A state tax based on income would qualify as a state tax deductible as an itemized deduction on your federal tax return. You can read more about that here:
https://www.irs.gov/taxtopics/tc503
Thanks. I'd read that but hesitated because this is a tax on passive income only -- interest and dividends, not wages. (It's definitely not a property tax.)
Still think that applies?
Yes, because it is a tax on INCOME, it is deductible for the State and Local Tax deduction.
If you are a Philadelphia resident who receives certain types of unearned income, you must pay School Income Tax (SIT). Taxable forms of unearned income include dividends, royalties, short-term rental income from a duplex/triplex which is the primary residence of the owner, cash lottery winnings from the Pennsylvania Lottery, and some types of interest.
School Income Tax | Service | City of Philadelphia
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