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PA Act 32

Urgent information for all Pennsylvania Employers (outside of Philadelphia).

Effective January 1, 2012, pursuant to PA Act 32, there will be a new filing and payment system for the remittance of Local Earned Income Tax (EIT) in Pennsylvania. Under the current system, each municipality and school district in PA was responsible for the collection and administration of its own earned income tax. Many municipalities hired outside tax collection services such as Berkheimer, Centax and Keystone Tax Bureau to name a few, to handle the administration of the EIT.

Effective January 1, 2012 this will all change. Please note Chester and Lebanon Counties chose to implement these changes effective January 1, 2011.

The following are the steps employers must take to be compliant with the new regulations:

Determine if you need to register with the tax collector in your region.

Designated Tax Collectors by County in Philadelphia Region

Residency Certification Form

All employers must have every employee complete a Residency Certification form. The employee must look up their 6 digit "PSD Code". The employer must retain the completed forms.

Determine the rate of withholding.

The rate the employer withholds will be the higher of the employer's rate or the employee's rate. You will need to update any software you use for processing payroll with the new rates, which, can be found at http://munstatspa.dced.state.pa.us/FindLocalTax.aspx.

Employer to remit tax to their taxing authority quarterly.

We will be contacting you shortly to check on your compliance progress. Please feel free to contact our office if you have any questions.

Posted: November 2011

Bassman, Laserow & Company, PC
350 Sentry Parkway East
Building 630, Suite 200
Blue Bell, PA 19422
voice: 215-628-0420
fax: 215-628-3461
email: Bassman, Laserow
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