You'll get a 1099 from PA so you pay Federal tax. I got 1K last year. They don't make it simple to apply for this. The website was down for some time, so they said I had to file on paper (much paperwork, copies and about 2 bucks to mail). Then the website came back and they refused to accept the paper, so had to file online (only in PA, what a state). They only grant like 250 of these for the whole state, but I have noticed they don't even give out that many, typically. I think the enormous hassle keeps most from going through the effort.