As of 2016, there are 501 school districts in the Commonwealth of Pennsylvania, each with a distinct six-digit code that identifies it to the state government and the Pennsylvania Department of Revenue. School district codes serve many functions, but are particularly important in helping the Department of Education determine the annual state funding allotment for each school district. These 501 school districts are spread across Pennsylvania's 67 counties.

School district codes are partially determined by the country that the district is in. For example, Fairfield Area, Gettysburg Area and Littlestown Area are all in Adams County and each of their codes begin with the digits 01. However, this standard is not universal across the state: Anon Grove and Twin Valley are both in Chester County, but Anon Grove's code begins with 15 and Twin Valley's begins with 06.

School funding allotments are determined by the Department of Education on the basis of tax revenue information collected by the Department of Revenue. Taxpayers in Pennsylvania must affix the school district code in their town or city to their state personal income tax returns. This information is collected and compiled by the Department of Revenue, and the total Pennsylvania taxable income for each district is transmitted to the Department of Education. The Pennsylvania state government then uses this information to determine which districts need more funding and which need less support.

Pennsylvania taxpayers put school district codes on their personal income tax returns. This lets the Department of Revenue collect information about state taxable income for each taxpayer. Taxpayers identify the school districts they lived in as of Dec. 31 of the appropriate tax year. Even if a taxpayer moves after that date but before filing taxes, the prior school district code applies.