Updated Tax Rules for Independent Contractors
Anyone who received income as an independent contractor, or is fiscally sponsored as a “Model C” entity, this is for you!
Starting with the 2025 tax year, the City of Philadelphia announced changes to the BIRT (Business Income and Receipts Tax) and NPT (Net Profits Tax), which affect many independent contractors and small businesses.
From the Philadelphia Department of Revenue:
Mandatory Filing Requirement: If your business is located in Philly and you did business in 2025, you must file a BIRT return by April 15.
The $100,000 statutory exemption has expired. It's now mandatory to file BIRT returns regardless of sales. Even if you didn't do business in 2025, but still have an active Philly tax account, you need to file a BIRT return. File a BIRT-EZ if all of your sales were in Philadelphia. We no longer have a no tax liability form.
Key Philadelphia tax policy changes you need to know now (City of Philadelphia)
Filing Your BIRT: Official City Guidance(Lift Philly)
The City has launched the Philadelphia Free Business Tax Preparation program to provide small businesses earning less than $250,000 in revenue with free local, state and federal tax preparation assistance. That includes navigating several changes to the City's tax structure.
