Pennsylvania Department of Revenue
May 2026 - July 2026
Why This Matters For Families
The Pennsylvania Department of Revenue (PA DOR) has a long history of providing tax relief to low-income filers and has made significant investments to help residents access tax relief, through programs like Tax Forgiveness and, more recently, the Working Pennsylvanian Tax Credit (WPTC). The Tax Forgiveness program, which was established in 1974, recognized that certain citizens in the Commonwealth, because of poverty, needed special tax provisions, as personal income tax in some situations could deprive people of basic necessities. Certain eligible individuals are able to critically relieve their economic burden. And, refundable tax credits are one of the country’s most effective anti-poverty tools.
Implementation Challenge
Pennsylvania has multiple tax relief programs that can provide meaningful financial support to low-income filers, but accessing the full range of available benefits can require residents to navigate different eligibility rules, filing requirements, and communications. We know across a large body of work that interacting with the tax system can be loaded with fear, confusion, and a general lack of awareness about the potential benefits available to people.
Despite PA DOR’s deep commitment to increasing awareness and improving access by streamlining the filing process, eligible residents do not always receive all the relief available to them. One in five Pennsylvanians is eligible for reduced tax liability via Special Tax Forgiveness, yet only 68% of eligible filers participate. By comparison, the newer WPTC, a refundable credit worth up to $805, had a 98% participation rate in its inaugural year (2025). The programs also reach many of the same families. In Tax Year 2025, 37% of the more than 708,000 filers who claimed the WPTC also claimed Tax Forgiveness.
Increasing the Tax Forgiveness participation rate could therefore help more Pennsylvanians take full advantage of the combination of tax relief benefits available to them.
Our Approach
Between May and July 2026, PA DOR partnered with the New Practice Lab on a six-week discovery sprint to understand where residents encounter barriers to claiming Tax Forgiveness and the WPTC – and identify opportunities across policies, processes, communications, and digital tools that could help more eligible Pennsylvanians understand and claim the tax benefits available to them.
We used the end-to-end filer journey as the organizing framework for the sprint, examining opportunities at each stage: awareness, deciding to file, filing taxes, receiving a refund, and amending a return.
To understand where residents encounter friction and where PA DOR could intervene, the New Practice Lab team:
Interviewed Commonwealth of Pennsylvania employees administering the WPTC and Tax Forgiveness to understand systems that impact the process of filing.
Reviewed policies via desk research to understand overlap and deviations between Tax Forgiveness and WPTC as relief programs.
Conducted user research with tax filers on Tax Forgiveness materials, including an outreach letter, DOR informational webpages, and myPATH, the state’s free online filing tool.
What We Learned
Through our research, we identified five key findings:
PA’s Tax Forgiveness program provides a unique opportunity for families to maximize their refundable tax credits.
Decisions about WPTC implementation could benefit from direct feedback from filers.
Pennsylvania has built a strong foundation with myPATH, but current usage and filing patterns suggest opportunities to improve the online filing experience.
Pennsylvania tax filers who aren’t knowledgeable about taxes find it difficult to understand Tax Forgiveness. Existing materials could be improved to better help filers understand the benefit, determine their eligibility, and claim it.
Pennsylvania has demonstrated that coordinated outreach can increase awareness of tax benefits – they could apply the same approach to Tax Forgiveness.
Through the discovery sprint, we learned that Tax Forgiveness and WPTC programs could collectively deliver more tax relief and dollars in pockets for low-income filers. Our team developed a set of recommendations for PA DOR in three primary areas:
Although these are two distinct programs, they collectively add up to much-needed tax relief, and helping eligible Pennsylvanians understand and access tax benefits will require improving webpages, improving outreach materials, and expanding coordinated outreach across tax benefit programs.
The filing process itself — which is difficult due to the program’s complexity and Pennsylvania’s divergence from standard IRS definitions — should make claiming Tax Forgiveness as simple as possible, improving the end-to-end filer journey and reducing friction and barriers to overall adoption.
Improving awareness and the mechanics of filing should be accompanied by modernizing tax benefit policy. For example, exploring opportunities to standardize the definition of a dependent and review eligibility thresholds to better reflect today’s economic realities.
Delivering long-term economic impact to Pennsylvanians will require attention to all parts of the filer’s journey.
Next Steps
The New Practice Lab will continue its partnership with the PA DOR, beginning with a feasibility study to inform policy development that could streamline eligibility and delivery of these programs.
