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Pennsylvania Publishes Act 32 Manual!

State and Local Tax

By Cathleen Condrac

As part of its efforts to define, explain and clarify Act 32, Pennsylvania has very recently published the Act 32 of 2008 Policy and Procedure Manual. This 105-page manual includes a comprehensive explanation of the provisions within Chapter 5 of the Local Tax Enabling Act regarding the consolidated collection of local income taxes. In addition to the plain-language explanations, it includes the related statutes (Sections 503 through 517), sample forms and multiple scenarios, which provide much clarification and guidance. This manual far surpasses the draft proposed regulations published on the NewPA website late in 2011.

Section 501 of the manual sets forth the statutory definitions including additional explanations for “Domicile” and “Resident.” Extensive examples are also provided for “Earned Income” and items that are never considered earned income.

Under paragraph (3) of Section 512, the manual expounds on nonresident rates, particularly in municipalities that have been declared “distressed” under Act 47 of 1987 or as having financially distressed municipal pension systems under Act 205 of 1984.

Finally, paragraph (9) of Section 512 of the manual takes the opportunity to address “Work Rules by Location.” In three separate examples, the manual guides the employer in determining the work location for employees who routinely travel to different work locations for varying periods of time. In the third scenario, the manual even addresses those employees who typically work from home.

This manual serves as an excellent resource for most Act 32 scenarios.

If you have any questions regarding the Act 32 of 2008 Policy and Procedure Manual or any other Act 32 matter, please do not hesitate to contact the state and local tax professionals at Schneider Downs.

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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.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2018 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

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