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    Pennsylvania Act 32 Local Withholding Requirements

    Article ID: 2001225

    Overview

    On July 2, 2008 the Pennsylvania legislature enacted an amendment (Act 32) of the Local Tax Enabling Act, Act 511 of 1965 with the goal of consolidating and simplifying the collection of Local Earned Income taxes on a countywide basis. Mandatory compliance is effective January 1, 2012. However, some Tax Collection Districts (TCD's) have elected to be early adopters in 2011 and will require employers to comply now.
    Under Act 32, employers are required to withhold the higher of the employee's resident earned income tax amount (rate of total resident EIT where they reside) vs. the employee's municipal non-resident earned income tax amount (rate of non-resident EIT where they are employed). Employers are required to obtain information in the Residency Certification Form for every employee.

    Assumptions

    You have an active Intuit Full Service Payroll subscription.

    Details

    Which TCD's have elected to be early adopters in 2011?

    • Chester County
    • Lancaster County
    • Lebanon County
    • Wyoming County

    What do I have to do?

    Step 1:


    Employers must register with their new tax collection district. Click here for a list of PA Tax Collection Districts.


    Step 2:


    Fill out the Residency Certification (RC) Form. This form must be filled out by the employer and signed by the employee. The Employer will retain this form for their records.


    Step 3:


    For Intuit Full Service Payroll, forward a copy of the R C form to IFSP_Tax@Intuit.com.

    What are PSD Codes?

    Political Subdivision Codes (a 6-digit code) are used to identify municipalities and school districts for each tax collection district. Act 32 requires employers and tax officers to utilize the PSD codes prescribed by DCED.

    How do I find EIT rates and PSD Codes?

    To find the resident and non-resident withholding, employers must use the DCED Official Tax Register to determine the rate applicable to every employee and the corresponding 6-digit Political Subdivision (PSD) Code for where they work and live.

    The Official Tax Register is located at http://munstatspa.dced.state.pa.us/Registers.aspx.
    We emphasize that as an employer you are aware of the new Act 32 requirements as well as any additional requirements your new County Tax Collector may have by visiting its website.

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