Philadelphia’s small business community is experiencing significant changes, marked by new tax policies and enhanced support programs. These developments present both challenges and opportunities for local entrepreneurs.
Reinstatement of the Business Income and Receipts Tax (BIRT)
Starting with the 2025 tax year, over 50,000 small businesses, gig workers, and self-employed individuals in Philadelphia are once again subject to the city’s Business Income and Receipts Tax (BIRT). This change follows the expiration of exemptions that had been in place since 2014, which previously allowed businesses to exclude the first $100,000 in gross receipts and a portion of net income from taxation. The reinstatement of BIRT is expected to impose a significant financial and administrative burden on affected businesses. To assist, the city is offering free tax preparation services for businesses earning under $250,000. Read more
Support Programs for Small Businesses
In response to these challenges, Philadelphia has introduced several initiatives to support small businesses:
- The Catalyst Fund: This program offers grants of up to $50,000 to small businesses with demonstrated need and growth potential. Eligible businesses must be located in Philadelphia, up to date on city taxes, and able to accelerate business goals with targeted funding. Learn more
- One-on-One Business Support: The Department of Commerce provides personalized assistance through business service managers who help entrepreneurs navigate the complexities of starting and operating a business in the city. Find support
- Creative Entrepreneur Accelerator: Aimed at creative entrepreneurs in fields such as marketing, design, and media, this program offers $2,000 grants to support business development. Eligible applicants must operate a for-profit micro-business with gross revenue under $200,000 in the Philadelphia area. Apply here
Economic Trends and Outlook
Despite recent challenges, Philadelphia’s small businesses have shown resilience. In 2025, many businesses reported optimism about the future, with some experiencing profitable years despite economic headwinds. This optimism is bolstered by the city’s commitment to supporting small businesses through various programs and initiatives. Read the full article
As Philadelphia’s business landscape continues to evolve, staying informed about policy changes and available resources is crucial for entrepreneurs aiming to thrive in this dynamic environment.