What working family tax cuts mean for Pa.
Jim Spencer
SBA Mid Atlantic Regional Administrator
This tax season, small businesses across Pennsylvania are seeing the impact of Working Family Tax Cuts where they matter most — on their bottom line.
Last year, President Donald Trump signed into law the largest tax cut in U.S. history, designed to empower the working- and middle-class Americans who keep our nation strong. Already, refunds for taxpayers are up 11% compared to last year, with the average refund reaching approximately $3,500.
But few groups benefit more than America’s 36 million small businesses, who create two out of every three new jobs and generate nearly half of U.S. GDP.
So far this tax season, 12 million small businesses have saved an average of $7,000 thanks to Working Family Tax Cuts. Here in Pennsylvania, an estimated 1.2 million small businesses, or employing 42.5% of private sector employees, are eligible for provisions like the permanent 20% Small Business Tax Deduction. This year, job creators will be keeping more of what they earn — and reinvesting those savings back into their workforce, equipment, and future growth.
At the center of this relief is the permanent extension of the 199A Deduction. This provision alone has already delivered roughly $4,600 in average tax savings to 8 million entrepreneurs nationwide. Without it, many small businesses would have faced a significant tax increase of up to 50%. Instead, they now have the certainty to expand, hire and invest.
Many manufacturers are also taking advantage of provisions that allow 100% expensing for new factories, equipment, and research and development. By allowing the full cost of these investments to be deducted in the year they occur, the law reduces tax burdens up front and supports investment in expansion and modernization.
The law also delivers direct relief to Pennsylvanian workers. More than 4.6 million Americans across the country have already claimed ‘no tax on tips,’ and nearly 20 million have benefited from ‘no tax on overtime’ — with over 25 percent of returns reflecting that relief.
Working Family Tax Cuts also strengthen the financial security of families, retirees and workers preparing for new careers. The law prevents the death tax from hitting family-owned farms and businesses by keeping higher estate tax exemptions in place. It reduces tax burdens for many seniors and increases the child tax credit to $2,200 per family. By expanding workforce Pell Grants for skills-based programs, it helps more workers earn credentials that lead directly to good-paying jobs. It also creates new Trump Accounts to encourage personal saving and investment, giving families a flexible, tax-advantaged way to build wealth over time.
When small businesses grow, Pennsylvania grows with them — through new jobs, higher wages, and stronger local economies and communities. That is the purpose of President Donald Trump’s tax relief: to ensure that the people building businesses, creating jobs, and driving our economy forward have the resources and the support they need to succeed.
This is exactly what President Donald Trump promised: putting American workers and small businesses first by putting more money in their pockets. Working Family Tax Cuts are delivering for Main Street.