Manufacturing Tax Credit (MTC)

Manufacturing Tax Credit (MTC) — FY

Provides manufacturing tax support for Pennsylvania job creation through measurable payroll growth in advanced factories.

Eligibility · United States · US-PA

Pennsylvania's Manufacturing Tax Credit (MTC) program rewards qualified taxpayers who create new full-time manufacturing jobs in the Commonwealth by delivering a credit equal to 5% of the resulting increase in annual taxable payroll, provided that increase is at least $1,000,000. The program is administered by DCED on a first-come, first-served basis, and the Commonwealth issues no more than $4,000,000 in credits per Pennsylvania fiscal year (July 1 through June 30). Because credits are awarded until the cap is exhausted, early-fiscal-year submissions have a structural advantage. Eligible taxpayers include entities subject to PA Personal Income Tax, Corporate Net Income Tax, Capital Stock/Foreign Franchise Tax, Bank Shares Tax, Insurance Premiums Tax, Gross Receipts Tax, and several other state-level levies.

The credit applies strictly to new full-time jobs in manufacturing that generate a net payroll increase of at least $1 million on an annualized basis. There is no employee-count ceiling and no minimum company age requirement, but the jobs must be in manufacturing — other industries are not eligible. Credits are assignable and sellable to other Pennsylvania taxpayers through DCED's Tax Credit Assignment Application, providing liquidity for manufacturers with limited current-year state tax liability. Applications are submitted electronically through Pennsylvania's Enterprise eGrants System at grants.pa.gov and must include required program addenda and a tax compliance form.

Manufacturers planning an expansion that will add significant payroll should monitor the fiscal year opening (July 1) and prepare their eGrants application in advance, as the $4 million statewide cap can be reached before year-end. Applicants must be current on all state tax obligations at time of filing. DCED's most recently published deadline was August 20, 2025, reflecting the prior fiscal year's FCFS window; the same annual cycle structure applies each subsequent year.