Pennsylvania · Manufacturing / Jobs · PA-MI-001
Manufacturing Tax Credit
Publication revised September 24, 2026. Sourcebook page 231.
Credit amount / calculation
Up to 5% of the increase in annual taxable payroll from qualifying new full-time jobs; minimum payroll increase is $1 million.
Business fit and eligible activity
Qualifying manufacturers increasing taxable payroll through new jobs can receive a performance credit. Hiring, wages or qualifying training; where the program also requires investment, satisfy both tests.
Illustrative business benefit
An approved manufacturer adds $1.2 million of qualifying annual payroll. At an awarded 5% rate, the credit is $60,000, subject to the agreement and use restrictions.
Timing / first action
Check application or certification requirements before incurring the qualifying expense or beginning the qualifying activity.
Official sources
Related programs
Historic Preservation Tax Credit
Credit based on qualified rehabilitation expenditures
Certified historic mill rehabilitation can qualify for an allocated state credit.
Research and Development Tax Credit
Percentage of Pennsylvania qualified research expenses over
Qualified Pennsylvania research can generate an annually allocated credit.
Rural Jobs and Investment Tax Credit
generally
Potentially useful indirectly to rural businesses receiving capital from approved rural growth funds.
Clean Electricity Investment Credit (Internal Revenue Code §48E)
Generally
Potentially relevant when a forest-products facility owns qualifying zero-emission generation or energy-storage property.
Clean Electricity Production Credit (Internal Revenue Code §45Y)
Production-based
Alternative to the investment credit for owners/operators of qualifying clean-electricity facilities; potentially relevant to qualifying on-site generation.
Credit for Increasing Research Activities (Internal Revenue Code §41)
Regular research-credit method
A sawmill, secondary manufacturer or biomass business can qualify when it performs genuine technological experimentation to improve a product or process.