As was discussed in some earlier Insights (January 7 and February 24, 2011), Pennsylvania Act 32 will require all Pennsylvania employers (except for those located in Philadelphia) to withhold local earned income tax from their employees beginning January 1, 2012. The following references are available to help employers in implementing this requirement:
The Pennsylvania Institute of Certified Public Accountants (PICPA) has created a checklist to assist employers in complying with Act 32. The Act 32 checklist is available on PICPA's website.
Employers will need to know the six (6) digit Political Subdivision Code (PSD) for the area/school district in which the business is located. These can be found at http://www.newpa.com/get-local-gov-support/municipal-statistics. Click on the (PSD) codes list.
Employers must register with the appropriate tax collector for their business location(s). A listing of tax collectors can be found at www.newpa.com/webfm_send/1926.
The first column headed prefix has a two (2) digit number identifying the appropriate tax collector. The first two (2) digits of the employer’s PSD code referenced above identify the employer’s appropriate tax collector.
Employers must obtain, and keep on file, a completed and signed Residency Certification Form from each employee. These forms are available online at www.newpa.com/webfm_send/1933. The PSD codes reference above will be needed for these forms for both the employer and the employee.
Employers can get assistance in determining the required withholding rate by filling in the work location and the employee’s home address on a “Find Your Withholding Rates by Address” form at http://munstatspa.dced.state.pa.us/FindLocalTax.aspx.
At this time, there are only draft regulations amending the PA Code concerning this Act, but Act 32 is effective January 1, 2012.
If you have any questions, please contact Tom Lisak at firstname.lastname@example.org or Tim Adams at email@example.com.
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This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.