Is Philadelphia's "school income tax" on passive income deductible on federal taxes along with PA state taxes?

[lowprofile]

It's a peculiar form of income tax, but it is an income tax.  Can it be deducted?  If so, how?

[ThomasM125]

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

[lowprofile]

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?

[MaryK4]

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

@lowprofile