Pennsylvania Guide for Canadians

Quick Facts

State Income Tax	3.07% flat rate (no tax on Social Security)
Sales Tax	6% state + local (up to 8% total in Philadelphia)
Driver's License Grace Period	60 days for out-of-state license holders becoming residents
Residency Requirement for Tax	Resident for any part of tax year or domiciled in Pennsylvania
Vehicle Registration Deadline	Immediately upon establishing residency
REAL ID Deadline	May 7, 2025 for domestic flights

First 90 Days Checklist

Week 1-2: Essential Documents

• Gather required documents for driver's license and REAL ID
• Open US bank account with Pennsylvania address
• Set up temporary mailing address

Week 3-4: Official Registration

• Apply for Pennsylvania driver's license (within 60 days for out-of-state license holders)
• Register vehicle if brought from Canada
• Register to vote in Pennsylvania

Month 2-3: Establishing Residency

• Update address with Canadian financial institutions
• Establish Pennsylvania ties and documentation
• Obtain Pennsylvania vehicle insurance

Driver's License & Vehicle Requirements

For Canadian Citizens

Required Documents for REAL ID:

• Valid Canadian passport (for identity and lawful status)
• Social Security Number documentation (if applicable)
• Two documents proving Pennsylvania residency

Testing Requirements:

• Pennsylvania does not recognize foreign driver's licenses
• Both written knowledge test and road test required
• Vision screening required

Important Notes:

• 60-day grace period for out-of-state license holders becoming residents
• REAL ID required by May 7, 2025 for air travel
• Non-U.S. citizens need valid immigration documents

Vehicle Registration

• Register immediately upon establishing Pennsylvania residency
• Annual safety inspection required
• Emissions testing required in certain counties
• Pennsylvania insurance required for registration

Tax & Residency Considerations

Pennsylvania State Tax Profile

• **Low flat income tax** 3.07% on all income levels
• **No tax on Social Security** or Railroad Retirement benefits
• **Inheritance tax** on certain heirs (4.5-15% depending on relationship)
• **Moderate sales tax** 6% state + local (up to 8% in Philadelphia)

Establishing Pennsylvania Tax Residency

Pennsylvania residency is based on domicile and physical presence:

• Resident for any part of the tax year
• Domiciled in Pennsylvania during tax year
• Physical presence supporting residency intent

Documentation to Establish Residency

• Pennsylvania driver's license and voter registration
• Bank accounts and utility bills in Pennsylvania
• Employment or business activities in Pennsylvania
• Professional licenses, club memberships, property ownership

US Federal Tax Implications for Canadians

Important: Under the Substantial Presence Test, you may be considered a U.S. resident for tax purposes.
Recommendation: Consult a cross-border tax professional.

Healthcare Considerations

Insurance Options

• Pennsylvania expanded Medicaid but coverage limited to eligible residents
• Travel insurance strongly recommended for visitors
• Consider comprehensive US health insurance for permanent residents
• Excellent medical facilities in Philadelphia and Pittsburgh

Prescription Medications

• Bring adequate supply from Canada
• Understand prescription transfer requirements
• US prices often higher than Canadian prices
• Major pharmacy chains available with discount programs

Special Considerations for Snowbirds

Maintaining Canadian Ties

• Keep principal residence in Canada
• Monitor days in U.S. for tax reasons (183-day rule)
• Maintain Canadian insurance & banking relationships
• Pennsylvania residency determination requires careful planning

Property Considerations

• Moderate property taxes (1.26% effective rate)
• Property values vary significantly by region
• Senior citizen property tax exemptions available
• Consider impact on Canada's principal residence exemption

Climate & Lifestyle Benefits

• Four distinct seasons with moderate climate
• Rich American history and cultural attractions
• Close proximity to major East Coast cities
• Strong Canadian expat community

Travel Documentation

• Ensure passport validity (6+ months remaining)
• Consider Global Entry/NEXUS for easier border crossings
• Track residency establishment carefully
• REAL ID available for enhanced travel convenience

Historic Charm with Modern Amenities

Pennsylvania offers a blend of historic significance and modern living with reasonable tax rates. The low flat income tax and proximity to major metropolitan areas make it attractive for Canadian relocators.

Key Contacts & Resources