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Pennsylvania State and Local Tax Update—Fourth Quarter 2023

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Pennsylvania State and Local Tax Update—Fourth Quarter 2023


The last three months of 2023 offered some interesting developments of note for Pennsylvania taxpayers, particularly those who work in Delaware and New York, Philadelphia residents, and executors of trusts.

Philadelphia Wage Tax Credit Denied

In a 3-2 decision, the Pennsylvania Supreme Court upheld the Commonwealth Court and sided with the Philadelphia Department of Revenue in Zilka v. Tax Review Board, a case addressing whether a city resident was entitled to a credit for state-level taxes paid to Delaware.

During the tax years at issue, the taxpayer lived in Philadelphia but worked full-time in Wilmington, Del. Accordingly, she was subject to state and local tax in Delaware as well as to Pennsylvania personal income tax and city wage tax.

Under the Pennsylvania and Philadelphia laws, she was able to claim a credit for Delaware tax against her personal income tax liability. Likewise, she was able to claim a credit for Wilmington tax against her wage tax liability. The city, however, denied her claim for a credit against wage tax based on the tax paid to Delaware that she was unable to use against her Pennsylvania liability.

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The taxpayer appealed, arguing that denying the credit amounted to unconstitutional double taxation. The high court agreed that the city’s taxing system is constitutional and that the city is required by the state constitution to give a credit only for taxes paid to other local jurisdictions, not for state-level taxes.

The court reasoned that any increased tax burden was the result of rate disparities between the various jurisdictions and that, because of her living and work arrangements, the taxpayer was effectively subject to state tax at the Delaware rate and local tax at the city rate because those rates are higher than their counterparts.

This case is a blow to taxpayers who live in Pennsylvania (and particularly in Philadelphia) but who are subject to income tax in states with which Pennsylvania doesn’t have reciprocity (including Delaware and New York) because those taxpayers are essentially subject to two taxing systems and may not be able to fully use credits.

Property Tax Uniformity Challenges

In Downingtown Area School District v. Chester County Board of Assessment Appeals, the Commonwealth Court held that Downingtown’s policy of appealing any real property tax assessment that “may potentially result in total annual revenue of $10,000 or more” violated the uniformity clause of the Pennsylvania constitution.

The court reasoned that the purpose of the appeal process is to correct mistakes in the most recent countywide reassessment and not to function as a substitute for a countywide reassessment.

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It found that by targeting only assessment appeals that were likely to result in material revenue to the school district, the district was unfairly burdening owners of overassessed properties. It also found that the threshold therefore created a “systematic and disparate treatment” of property owners.

In School District of Philadelphia v. Board of Revision of Taxes, the Commonwealth Court addressed nearly identical facts and the Philadelphia school district’s policy of appealing any real property tax assessment where it was “reasonably likely that an appeal of [the] assessed value will yield a minimum of an additional $7,500.” The court again found that this policy violated the uniformity clause.

As shown by these cases, school districts likely will continue to target certain types of properties for real estate tax appeals and the Pennsylvania Supreme Court may need to weigh in again on the constitutional limits of such policies. Buyers should consider this possibility when determining the appropriate purchase price for a property.

Realty Transfer Tax Ruling

In a case involving realty transfer taxes, or RTT, the Commonwealth Court held in Ebersole v. Commonwealth that deleting a contingency clause with retroactive effect—which authorizes distributions to persons other than the grantor if one of the grantors became incapacitated—allowed a trust to qualify as a living trust.

Under the RTT law, transfers to living trusts may be exempt from RTT, but only if the distributions from the transferee trust can be made only to the settlor(s) prior to the death of the settlor(s). As originally drafted, the trust at issue would have allowed the trustee, in the case of incapacity, to make distributions to charitable organizations.

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That language would have rendered the transfer to the trust taxable. However, the Commonwealth Court overruled the Board of Finance and Revenue and held that an amendment to the trust, which was approved by the Orphans’ Court and retroactive to the formation date of the trust, reflected the intent of the grantor and meant that the transfer was exempt as a transfer to a living trust.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Christopher A. Jones co-leads Ballard Spahr’s tax and real estate team, focused on a wide range of matters, including tax consequences of complex transactions and associated planning opportunities.

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Pennsylvania

These new 2026 health care laws are taking effect in Pa., N.J. and Del.

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These new 2026 health care laws are taking effect in Pa., N.J. and Del.


From Philly and the Pa. suburbs to South Jersey and Delaware, what would you like WHYY News to cover? Let us know!

This past year, lawmakers in the Delaware Valley pursued changes to health care policies and regulations that will expand access to prescription drug savings, ensure coverage for breast cancer imaging, reaffirm lead testing requirements, increase breastfeeding support in prisons and more.

Here are some new health care laws coming to Pennsylvania, New Jersey and Delaware that will be in place or take effect in 2026.

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Medicaid coverage for weight loss medication

The Pennsylvania state budget increases funding in several areas, but will cut costs by limiting coverage for glucagon-like peptide-1 drugs such as Wegovy and Zepbound for people in the Medicaid insurance program beginning Jan. 1.

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The state’s Medicaid program, called Medical Assistance, will no longer cover GLP-1 drugs solely for obesity and weight loss, but will continue to do so for people with diabetes and other health conditions.

Pennsylvania started paying for GLP-1 drugs for obesity in 2023. But the cost to the state rose as an increasing number of enrollees obtained prescriptions.

The commonwealth spent $650 million for GLP-1 drugs in Medicaid, for all reasons, in 2024, according to state officials. Lawmakers estimate it would soon cost over $1 billion annually.

Naloxone distribution by emergency responders

Emergency responders like emergency medical service workers can leave packages of naloxone, an opioid overdose reversal medication, with families and caregivers at the site of a 911 call or other treatment response.

The law codifies an executive order signed by former Gov. Tom Wolfe in 2018, which established a standing order allowing emergency responders to not only use naloxone to reverse an overdose, but to leave additional doses with others at the scene.

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However, executive orders are temporary and can expire or be reversed by a sitting governor. The new law now makes this policy permanent and strengthens protections for EMS workers.

The legislation also increases transparency in prescription prices and costs. When asked by a customer, pharmacists must disclose the current retail price for band name and generic versions of any medication being picked up.

They also must help customers and patients figure out their out-of-pocket costs for brand-name and generic options.

All parts of the law will be in effect by July 2026.

Prescription savings programs for seniors

Seniors who save money on their prescriptions through state assistance programs will get to stay in those programs even if their annual incomes go over the eligibility limits because of a bump in their Social Security payments.

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A law passed this year ensures that Social Security cost-of-living adjustments will not disqualify someone from participating in the Pharmaceutical Assistance Contract for the Elderly and the Pharmaceutical Assistance Contract for the Elderly Needs Enhancement Tier program.

The moratorium on Social Security cost-of-living adjustment income increases will last from Jan. 1 through Dec. 31, 2027.

“The PACE and PACENET programs play an important role in supporting older adults and offering tremendous savings by helping them pay for their prescription medications,” Pennsylvania Secretary of Aging Jason Kavulich said in a statement. “This new law will allow older Pennsylvanians to remain eligible for this benefit which provides them with lifesaving medication and a cost savings to their fixed incomes.”

Diagnostic mammogram and breast cancer imaging

A new law requires insurers to cover follow-up testing for women who need additional imaging after an abnormal mammogram, including an MRI or ultrasound.

While annual mammograms are fully covered by insurance, additional diagnostic testing can come with high costs, which cancer activists say can delay an early diagnosis of breast cancer.

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The expanded coverage will apply to insurance plans and policies that are issued or renewed starting summer 2026.

“With early detection and diagnostic imaging, we have the tools to limit the harm caused by cancer and the suffering it brings to families across the Commonwealth,” Donna Greco, Pennsylvania government relations director for the American Cancer Society Cancer Action Network, said in a statement.



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Pennsylvania couple accused of living with dead relative for months to cash his Social Security checks

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Pennsylvania couple accused of living with dead relative for months to cash his Social Security checks


A Pennsylvania couple is accused of living with their dead relative for months to reap the benefits of his Social Security checks. 

The Greene Washington Regional Police Department said James and Debbie Bebout of Canton Township were arrested in the death of James Bebout’s brother, Michael Bebout. 

Police paperwork details allegations

According to police paperwork, authorities received a call on Jan. 16 from James Bebout, who said he went to serve his brother breakfast when he found him “stiff as a board.” When officers arrived at the home on Hayes Avenue for a welfare check, DeForte said several red flags were raised.

“Instead of finding the decedent that would have passed away within the last 24 hours, we found the decedent in a state of severe decomposition,” DeForte said.

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DeForte said an investigation revealed Michael Bebout had been dead for about six months.

“You have two defendants that we believe knew the decedent had passed that were more interested in reaping the benefits of a governmental check and access to a warm home than they were providing some type of moral and ethical solution to their relative passing,” DeForte said.

During an interview with Debbie Bebout, investigators said she allegedly admitted to knowing Michael Bebout had been dead since around October but did not contact anybody.

“Debbie stated she cashed several of Michael’s $1,200/month Social Security checks in order to pay for food. Debbie stated she was concerned about getting kicked out of the house if Michael was known to have died,” police paperwork stated.

“What we found throughout the investigation was roughly a half a dozen Social Security checks that were cashed by the defendants,” DeForte said.

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During an interview with police, Debbie Bebout later admitted to officers that she “actually noticed that her brother-in-law, Michael Bebout, dead around Labor Day 2024.”

She also allegedly told officers that she pretended to take care of Michael Bebout every day so her husband would not find out.

Neighbors say it smelled “awful” outside the home

“We believe, through our investigation, that both defendants were well aware that the decedent was decomposing in the house with them. The smell was so pungent that you could smell it outside of the home prior to entry,” DeForte.

Neighbors described the couple as “bad news” and said that they knew something was wrong when it began to smell outside.

“We smelled an awful smell. We called the gas company, thinking it was a gas leak. Here, it wasn’t a gas leak. It was him. They always had a window cracked, to let the smell out, apparently,” Samuel Burgess said.

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Burgess said he was friends with Michael Bebout and knew he had been sick before his death.

“He was a sweetheart. He would do anything for anyone. He would give you his last dollar, his shoes, his shirt, anything. He was a perfect gentleman,” Burgess said.

Dead animals found inside home

Burgess said Michael Bebout had a dog that he loved that also lived in the home.

“There was a little dog. I don’t know what happened to the little dog. He might be in there dead also, yeah, because Michael had a little black puppy dog,” Burgess said.

DeForte said that several dead animals were found inside the home.

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“When we conducted the welfare check, we had noticed dead animals that were also severely decomposed throughout the house, that would also have been accompanied by a lot of garbage. A lot of clutter,” DeForte said.

“To have something like this happen in society today is an absolute violation of the human construct. This is both morally and ethically reprehensible,” DeForte said. “In over three decades of my law enforcement career, I have never witnessed something as macabre as what we saw inside of that residence.”



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Police officer rescues 8 people from inside burning duplex in Bucks County, officials say

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Police officer rescues 8 people from inside burning duplex in Bucks County, officials say


Thursday, December 11, 2025 1:21PM

Fire crews battling blaze at duplex in Penndel, Bucks County

Firefighters in Bucks County battled a fire inside a duplex Penndel, Pennsylvania, on Thursday morning.

PENNDEL, Pa. (WPVI) — A police officer’s quick actions helped save eight people from inside a burning duplex in Bucks County.

The fire broke out at 4:40 a.m. Thursday on the unit block of West Woodland Drive in Penndel Borough.

Officials say Officer Sean Peck observed the active fire and immediately jumped into action.

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Officer Peck ran into the home, which was filled with fire and heavy smoke, and rescued eight people from inside.

Fire crews that were called to the scene reported heavy hoarding conditions inside, making it difficult to enter the property.

There are no reports of any injuries.

The cause of the fire remains under investigation.

Copyright © 2025 WPVI-TV. All Rights Reserved.

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