|
By J. Gregory Hamm, J.D., CPA
Act 32 of 2008 made significant reforms and consolidation of Pennsylvania’s earned income tax (EIT) collection system. Act 32 affects all Pennsylvania business employers except those located only in the city of Philadelphia.
Effective January 1, 2012, the number of EIT collection jurisdictions will be reduced to 69 “countywide” collection jurisdictions. Each taxing jurisdiction will be assigned a unique six digit political subdivision number. Employers should start now to prepare for the changes. Employers need to register with its tax collection jurisdiction, if not already registered.
Complete the Residency Certification Form for each employee to identify the correct jurisdiction and political subdivision number of the employee. The form must be signed by the employee.
Withhold the correct local tax from the employee. The employer must determine the nonresident rate for the political subdivision number of the business location and the resident rate of the employee’s residence. The amount withheld is the greater of the above determined resident or nonresident rate.
Send the withheld taxes to the appropriate tax collection officer. There are two options:
Quarterly. Within 30 days after the end of each quarter, the employer must remit withheld taxes and employee information to the tax collection officer of each worksite location.
Monthly. Within 30 days of the end of the month, the employer must electronically remit withheld taxes and employee information to the single tax collection officer where the Pennsylvania corporate headquarters are located.
Within 30 days of the close of the calendar year, complete and submit the Annual Withholding Reconciliation Form to the appropriate tax collection officer(s).
Additional information on ACT 32, including forms, can be found on the PA Department of Community and Economic Development's website.
J. Gregory Hamm, JD, CPA, is a Senior Tax Manager with Boyer & Ritter, CPAs and Consultants. For additional information, contact Gregg at (800) 843-1120 or ghamm@cpabr.com. |
