Tax Forgiveness is a credit against PA tax that allows eligible taxpayers to reduce all or part of their PA tax liability. To claim this credit it is necessary that a taxpayer file a PA-40 return and complete Schedule SP. It is not an automatic exemption or deduction.
Further, to qualify for the credit, it is necessary to calculate both the taxable and nontaxable income. (Do not include Social Security benefits, retirement payments, unemployment or child support in the calculation.) If you are married, the percentage of Tax Forgiveness will be based on the joint eligibility income, even if filing a separate return.
The amount of the Tax Forgiveness tax credit you receive depends on your eligibility income, state withholding, and family size.
Here is a link to see if you qualify for Tax Forgiveness:
http://www.revenue.pa.gov/GeneralTaxInformation/Tax%20Types%20and%20Information/Pages/Personal%20Income%20Tax/Tax%20Forgiveness/Tax%20Forgiveness.aspx
Taxpayers who qualify for PA’s Tax Forgiveness program may also qualify for the federal Earned Income Tax Credit program.
Here is the link to the Internal Revenue Service's website: www.irs.gov or call the IRS toll-free, 1-800-829-1040.