Airbnb Host Taxes in Philadelphia, Pennsylvania - 2026

Updated for 2026 (Filing 2025 Taxes)

Tax Basics for Airbnb Hosts in Philadelphia, Pennsylvania

Philadelphia’s vibrant tourism, fueled by historical landmarks and a thriving arts scene, makes it a popular destination for Airbnb guests. However, generating rental income through platforms like Airbnb comes with tax obligations at both the federal and Pennsylvania state levels. Understanding these obligations is crucial for compliance and maximizing potential deductions.

Pennsylvania State Tax Rules for Rental Income

As a resident of Pennsylvania, any income earned from your Philadelphia Airbnb property is subject to Pennsylvania state income tax. Pennsylvania operates under a flat income tax rate of 3.07% for the 2025 tax year. All self-employed individuals, including Airbnb hosts, are required to file an annual Pennsylvania income tax return, even if no state tax is ultimately due. The primary form used for reporting self-employment income is the PA-40, Pennsylvania Resident Income Tax Return. Schedule UE, which is part of the PA-40, is used to calculate net profit or loss from a business or profession.

Pennsylvania does not have a separate tax specifically for short-term rentals. However, the income is included in your overall adjusted gross income and taxed at the flat rate. It’s important to accurately track all income and expenses related to your Airbnb activity. Philadelphia also has its own local wage tax, which may apply to your rental income depending on your residency and the location of the rental property. Consider the impact of parking regulations in areas like Old City or Center City when calculating expenses – parking tickets related to guest turnover or property maintenance are generally not deductible. Furthermore, be aware of any specific Philadelphia ordinances regarding short-term rentals, as non-compliance could lead to penalties. Resources for understanding Pennsylvania tax laws can be found on the Pennsylvania Department of Revenue website: https://www.revenue.pa.gov/

The Critical Tax Question: Are You a Business or a Rental?

This is the most important tax question for an Airbnb host, as it determines if you owe self-employment tax.

• Schedule E (Passive Rental Income): Most casual hosts report on Schedule E (Passive Income) and are exempt from Self-Employment Tax. This applies if you only provide basic lodging and cleaning between guests. Think of it as simply renting out a space.
• Schedule C (Active Business Income): However, if you provide "substantial services" (daily cleaning, meals, concierge services, providing toiletries beyond basic soap), you report on Schedule C and must pay the 15.3% self-employment tax. This is treated as running a bed and breakfast-style business.

Top Tax Write-offs for Philadelphia, Pennsylvania Hosts

• Platform Fees: Fees from Airbnb, VRBO, etc., are fully deductible.
• Mortgage Interest & Property Taxes: Deduct the portion corresponding to the rental space and period. If you rent out a portion of your primary residence, you'll need to calculate the percentage of the home used for rental purposes.
• Repairs, Maintenance & Cleaning: Deduct costs for fixing items, professional cleaning, and supplies. This includes costs for maintaining the property’s appeal to guests in a competitive Philadelphia market.
• Depreciation: A powerful but complex deduction for wear and tear on your property. Often requires a tax professional. This applies to the building itself and certain furnishings.