Overview

Official source

Under Pennsylvania case law, including Gosewisch v. Commonwealth, 397 A2d 1288 (Pa. Cmwlth. 1979), profit-sharing plans are taxable as Pennsylvania compensation. In Gosewisch, a distribution was made to the taxpayer from the “Profit-sharing Trust” and was considered to be remuneration received for services rendered. Since it was a severance, not a retirement benefit, the court held that the payment was compensation as defined in the Tax Reform Code and the regulations.

Pursuant to the Gosewisch case, during 2001, the department adopted provisions in Section 1.101 of its Regulations which provide that “Severance Pay” under PA PIT tax law is defined as follows:

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Overview

Official source

Under Pennsylvania case law, including Gosewisch v. Commonwealth, 397 A2d 1288 (Pa. Cmwlth. 1979), profit-sharing plans are taxable as Pennsylvania compensation. In Gosewisch, a distribution was made to the taxpayer from the “Profit-sharing Trust” and was considered to be remuneration received for services rendered. Since it was a severance, not a retirement benefit, the court held that the payment was compensation as defined in the Tax Reform Code and the regulations.

Pursuant to the Gosewisch case, during 2001, the department adopted provisions in Section 1.101 of its Regulations which provide that “Severance Pay” under PA PIT tax law is defined as follows: