Who Must File Pa Local Tax Return? (Solution)

Every resident, part-year resident or nonresident individual must file a Pennsylvania Income Tax Return (PA-40) when he or she realizes income generating $1 or more in tax, even if no tax is due (e.g., when an employee receives compensation where tax is withheld).

  • Every resident, part-year resident or nonresident individual must file a Pennsylvania Income Tax Return (PA-40) when he or she realizes income generating $1 or more in tax, even if no tax is due ( e.g., when an employee receives compensation where tax is withheld).

Do I have to file a local tax return in Pennsylvania?

Yes, if you live in Pennsylvania the state law requires all taxpayers to file a Local Earned Income Tax Return. Berkheimer is one of the local PA Tax Collectors who will file the Local Earned Income Tax Return.

Does everyone have to file local taxes?

Local income taxes generally apply to people who live or work in the locality. As an employer, you need to pay attention to local taxes where your employees work. If the local income tax is a withholding tax, then you are required to withhold it from employee wages. Or if the tax is an employer tax, you must pay it.

What happens if you don’t file local taxes in PA?

If you did not file a local return, the Tax Officer will rely on data from the Pennsylvania Department of Revenue to calculate the tax, penalty, interest and costs of collection due. In such situations, it may be possible for a delinquent notice to issue where no tax is due.

Is Pennsylvania local tax based on where you live or work?

The tax is based on the taxpayer’s place of residence (domicile) and NOT their place of employment. The EIT is separate from the Pennsylvania personal income tax (your state income tax). 2.

What happens if I don’t file local taxes?

(As with late-filing penalties, you will have to pay additional interest and penalties on unpaid state and local taxes, the rates of which are set by your state.) If you continue avoid paying your tax bill, the unpaid amount could come out of future tax refunds if you’re owed any.

Do I have to file a City of Philadelphia tax return?

“Every individual, partnership, association, limited liability company (LLC), and corporation engaged in a business, profession, or other activity for profit within the City of Philadelphia must file a Business Income & Receipts Tax (BIRT) return ”.

Do non residents have to pay PA local taxes?

An individual is considered a Pennsylvania resident for personal income tax purposes if he or she either is domiciled in Pennsylvania, or is a statutory resident. Nonresidents are taxed only on the income they receive from sources within Pennsylvania, and cannot qualify for the credit for taxes paid to other states.

Why did my employer not take out local taxes?

My employer does not automatically deduct local income tax from my paycheck. This is common for an employer to not withhold local tax, if the city you work in does not have a tax; even though the city you live in does have a tax.

Do expats have to file state taxes?

Despite what you might think, American expats pay U.S. taxes on income earned overseas. Unlike almost everywhere else in the world, American expats still need to file U.S. income taxes while living abroad —and that also may include state taxes.

Who Must File Philadelphia tax return?

You must pay the Earnings Tax if you are a: Philadelphia resident with taxable income who doesn’t have the City Wage Tax withheld from your paycheck. A non-resident who works in Philadelphia and doesn’t have the City Wage Tax withheld from your paycheck.

How do local taxes work in PA?

An individual employee’s local Earned Income Tax (EIT) Rate is determined by comparing the employee’s “Total Resident EIT Rate” (for the municipality in which the employee lives) to the “Work Location Non-Resident EIT Rate” (for the municipality in which the employee works).

Do I have to pay local earned income tax?

Yes. You are required to pay local earned income tax on the income earned for the period of time you resided in the municipality. For example, if you lived and worked in the municipality for only 4 months then you only pay on the income earned during those 4 months.

Who pays LST tax in PA?

Any individual who is employed in a municipality/school district that levies a LST has to pay the tax. This tax is determined by where you work and not where you live. 3.

What is taxable for PA Local tax?

Taxable Income Includes: Salaries, wages, commissions, bonuses, tips, stipends, fees, incentive payments, employee contributions to retirement accounts, compensation drawing accounts (if amount received as a drawing account exceeds the salary or commission, the tax is payable on the amount received.

Does Pennsylvania have a local income tax?

Many cities in Pennsylvania collect a Local Earned Income Tax which is typically 1%, but can be as high as almost 3.9%. In smaller municipalities, this tax is capped by state law at 2%.

Taxpayer Annual Local Earned Income Tax Return (F-1) FAQ

Earned income is defined as compensation determined in accordance with Section 303 of the act of March 4, 1971 (P.L. 6, No.2), known as the Tax Reform Code of 1971, and regulations in 61 Pennsylvania Code Part I, Section B, Art. V. Earned income is defined as compensation determined in accordance with Section 303 of the act of March 4, 1971 (P.L. 6, No.2), known as the Tax Reform Code of 1971, and regulations in 61 Pennsylvania Code Part I, Section B (relating to personal income tax). Employee business expenditures are permissible deductions under Article III of the Tax Reform Code of 1971, which determines what qualifies as a business expense.

Net profits are defined as the net income generated by the operation of a business, profession, or other enterprise, as defined by the Tax Reform Code of 1971 and the rules in 61 Pennsylvania Code Part I, Section B, Art.

(relating to personal income tax).

The following items are excluded from the definition of farming for taxpayers who are involved in the agricultural business, profession, or activity:

  1. Profits from the sale of agricultural machinery
  2. Profits from the sale of animals held for draft, breeding, or dairy purposes for a period of twelve months or longer
  3. And profits from the sale of other capital assets of the farm are all included in the calculation.
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What income is specifically exempt from the earned income tax?

Dividends, interest, income from trusts, bonds, insurance proceeds, and stock dividends (Schedule D) are examples of income that is exempt from taxation. Among the other exemptions are payments for disability benefits, old-age benefits, retirement pay, pensions (except payments deemed Early Distributions), social security payments, public assistance, or unemployment compensation payments made by a government agency, any wages or compensation paid by the United States for active military service, including bonuses or additional compensation for such service, and supplemental unemployment compensation from a state or local government.

Personal Income Tax Guide (PIT) for Pennsylvania Residents – Find out what is taxable and what is not taxable in order to avoid paying unnecessary taxes.

Active Duty Pay

According to ACT 32 standards, there has been a change in the way active duty military pay is taxed for 2012.

  • Active duty military salary is free from taxation beginning in 2016 regardless of where it was received. 2012-2015: Active duty military pay is taxed if it is earned in the state of Pennsylvania. If military pay is earned outside of Pennsylvania, it is not subject to taxation. Active duty military salary is free from taxation in 2011 and earlier years, regardless of where it was received.
Early Distribution:
  • Taking an Early Distribution (prior to turning 59 12 or using an allowed exception) from a retirement account means that the portion of the distribution that is taxable to the Commonwealth of Pennsylvania is also taxable to the city or town where you live. As a result, the amount included on Line 1 of your PA-40 form as compensation should be added locally and indicated on line 1 of your PA-40 form.
Out of State Tax Credits

For Tax Year 2012 and subsequent years, there has been a change in the taxes to which Out of State Tax Credits may be applied to taxes that are owed. The modification was made in accordance with ACT 32 guidelines:

  • Out of State Credits for 2012 through 2017 — These credits can only be used to the ACT 511 tax rate (which is typically one percent) assessed by your municipality or school district. Neither the credit nor the exemption may be used to taxes collected for the acquisition of open space (ACT 153) nor the removal of an Occupational Assessment Tax (ACT 24/130). Depending on whether you live in a jurisdiction that imposes one or both types of taxes, the rate at which you may claim an Out of State Credit is stated on your tax return. Out of State Credits for 2011 and earlier, as well as 2018 and ahead — May be used to the entire tax rate assessed by your municipality/school district, with the exception of school districts that have levied a tax under ACT 1 of 2007, which are exempt from the credit. ACT 1 taxes are levied in some areas, and the rate at which you can claim an Out of State Credit is recorded on your tax return if you live in one of those areas.
If the tax is withheld in another PA community where I work, do I also pay the PA District in which I live?

No, in most cases, the tax withheld by your employer will be remitted to the jurisdiction in where you reside. You are, however, still obligated to file an annual tax return with your resident taxation jurisdiction, regardless of where you live.

If I am subject to the Philadelphia wage tax, must I pay this tax?

While this is not the case, you are still obligated to complete a final tax return. If you are working in Philadelphia, you may be able to claim a credit for the Philadelphia Wage Tax against your duty to your resident jurisdiction, but the credit cannot be greater than the rate of your resident jurisdiction’s tax. If the amount of withholding is larger than the tax rate in your resident taxing jurisdiction, there will be no refund or credit available. It is not possible to use Philadelphia wage tax credits to your spouse’s tax burden.

Non-resident wage tax withholding may be used as a credit against wages received OUTSIDE of the city if the taxes are paid by the non-resident.

Taxpayers who have had Philadelphia wage tax deducted in excess of their obligation will not be entitled to a refund. The crediting provisions will be used in the same manner as they were in tax years 2011 and prior to the adoption of this judgment.

Whose Earned Income Tax will be withheld by their employer?

With effect beginning in the first quarter of 2012, all employers who maintain a physical location in the Commonwealth of Pennsylvania are required to determine which of the two tax rates applicable to an employee, either the employee’s resident tax rate or the work location’s non-resident tax rate, is the higher of the two tax rates, withhold at that rate, and remit the taxes due at least once a quarter.

Must all taxpayers file a final return?

Yes. If you live in a jurisdiction that has an Earned Income Tax in place and received wages during the calendar year in question, you must file a local earned income return by April 15 (unless the 15th falls on a Saturday or Sunday, in which case the due date is the next business day) for the calendar year that has passed. If you did not have any earned income, you must explain why on your final tax return.

What should I do if I lived in a jurisdiction/municipality for only part of the year?

Any length of time during which you were or are a resident of a municipality for which Berkheimer is the tax administrator necessitates you to file a return. You must file a tax return for the period during which you resided in that municipality and prorate your income, spending, withholding, and other obligations. On your final tax return, you must also complete the part under “Change of Address.” The following is a formula that you may use to calculate proration: Total annual income divided by 12 months or 365 days multiplied by the amount of time spent in the jurisdiction equals income taxable in that jurisdiction (same formula can be used for withheld and expenses)

How can I update my information (name, address) with your company?

Please complete our online Individual File Maintenance form by clicking here.

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What documentation do I need to submit with the final return?

The paperwork you provide should be adequate to support the amounts stated on each line of your return, and may include (but not be limited to): W-2 forms (if applicable), State business reporting schedules (if applicable), expenditure schedules (if applicable), and other supporting documents. For non-resident state income taxes paid to a non-reciprocating state, you must include a copy of that state’s return with your final return in order to receive credit for any taxes paid there that are in excess of the PA taxes due on the same taxable income.

Pay special attention to each line of the accompanying tax return and instructions to determine the particular form or schedule that is necessary.

Where is my Earned Income reported on my W2?

Your local earned income should be reported in the box labeled “State Wages, Tips, and Other Earned Income” on your tax return. (Please keep in mind that if the amount recorded in the State box differs significantly from the amount reported as Medicare Wages, you must provide an explanation for the discrepancy.) If this box is not filled out, you should go to the box under “Medicare Wages” for further information.

You should keep in mind that if you are employed outside of the state, you should refer to the section entitled “Medicare Wages.” It is necessary to record the amount of local earned income tax withheld in the box labeled “Local Income Tax.”

What address do I send my return to?

Those anticipating a refund or credit can send their request to the following address: Refund/Credit Request. HAB-EIT PO Box 25160 Lehigh Valley, PA 18002 HAB-EIT PO Box 25160 When sending money, please make it out to the address: Payment. HAB-EIT PO Box 25158 Lehigh Valley, PA 18002 HAB-EIT PO Box 25158 You or your spouse should use the refund/credit address if you or your spouse are anticipating a refund/credit and making a payment. If you are not anticipating a refund or are not making a payment, please send a letter to the following address: No Payment/No Refund.

Who should I make my check payable to?

Those anticipating a refund or credit should send their request to the following address: Refund/Credit Request Form. Lehigh Valley, Pennsylvania 18002 HAB-EIT PO Box 25160 Lehigh Valley, Pennsylvania 18002 You can mail your money to the following address: Payment Lehigh Valley, Pennsylvania 18002 HAB-EIT PO Box 25158 It is necessary to use the refund/credit address if you or your spouse are expecting a refund/credit and making a payment. No Payment/No Refund: Please mail to the address below if you are not expecting a refund or making a payment.

How can I find out what jurisdiction my address is located in?

If you need to find out the jurisdiction you are currently reside in, please visit this page.

Where can I locate the tax rate or PSD Code for a specific jurisdiction?

If you want information on tax rates and PSD Codes, please see the following link.

Can I file an extension for the Local Earned Income Tax?

In the event that you submit a Federal or State Application for Extension, please email us a copy along with an estimate of your payment, or file your extension online by April 15th.

How can I file an amended return?

By clicking here, you may get a blank final return in PDF format. Write the words AMENDED RETURNat the top of the form and fill in the blanks with the updated information. Please provide any supporting paperwork with your updated tax return as well as your modified tax return.

My employer is located in an area with a distressed tax. Am I entitled to a refund?

Some taxation authorities apply a distressed tax (such as Act 205 or Act 47) on both residents of that jurisdiction and non-residents who are employed inside the jurisdiction, depending on the circumstances. It is not refundable if the extra earned income tax imposed exceeds the earned income tax rate owed your residence municipality/school district under Act 511. Instead, that amount of the tax remains in the township or borough that implemented the distressed tax.

Who must file a Personal Income Tax return?

A PA tax return is required if you are a resident, nonresident, or a part-year resident of Pennsylvania and you meet any of the following criteria:

  • You received total Pennsylvania gross taxable income in excess of $33, even if no tax is payable with your PA return
  • And/or
  • You sustained a loss from any transaction, whether as a person, sole proprietor, partner in a partnership, or shareholder in a PA S corporation.

Even if a child is claimed as a dependant on a federal tax return, Pennsylvania law does not exclude him or her from the above-mentioned obligations to file a Pennsylvania tax return. If the decedent satisfied the qualifications outlined above, the executor, administrator, or other person in charge of the decedent’s affairs is required to submit a Pennsylvania tax return. Pennsylvania levies taxes on eight categories of income: (3) net gains or income less net losses from the disposition of property; (4) net gains or income from rents, royalties, patents, and copyrights; (5) dividends; (6) interest; (7) gambling and lottery winnings; and (8) any other income or gain from a company, profession, or farm.

*** A cash prize or annuity payment from the Pennsylvania Lottery, received on or after January 1, 2016, must be reported as taxable income on the winner’s Pennsylvania personal income tax return, as provided by Act 84 of 2016. ***

Earned Income Tax

An employee who resides in a Pennsylvania municipality other than Cranberry Township, which has a 1 percent EIT resident rate, and works in Cranberry Township, which has a 1 percent EIT non-resident rate, is considered to be a non-resident of the municipality in question. Is it mandatory for us to collect an additional 1% to cover Cranberry Township’s expenses? No, if the employee lives in Pennsylvania and has already paid the tax in the municipality or school district where they reside, you are not required to withhold an extra one percent from their paycheck.

If they reside in a neighboring state, they would be subject to the non-resident tax imposed by the city of Cranberry.

Example 2

Employers in Pennsylvania municipalities with EIT resident rates of 0.5% and 1%, respectively, may choose to relocate their employees to Cranberry Township, which has a 1 percent EIT resident rate. We, as an employer, are obligated to withhold.5 percent EIT for the associate’s municipality and.5 percent EIT for the Cranberry Township non-resident rate, respectively. As an employer, you would be compelled to withhold the one percent from this associate’s wages. According to Berkheimer, the 1 percent will be divided between the associates’ resident municipality and Cranberry.

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No, the associate is only needed to submit a local tax return in the jurisdiction in which they live.

Example 3

An employee who resides in a neighboring state and commutes to Cranberry Township for work does so. In order to comply with Cranberry Township’s non-resident rate, we would be forced to withhold 1 percent EIT from our employees, is I correct? That is accurate, you are correct. Berkheimer would then send the entire 1 percent to Cranberry as non-resident money, and the process would be repeated. Because a School District cannot tax a non-resident, the entire one percent is transferred to the Township.

The filing of a non-resident return by an employee who lives in a neighboring state is not a legal necessity in this situation.

Earned Income Tax

The Township of Pine/Pine-Richland School District levies a combined tax of one percent on all earned income and net profits generated in the municipality and school district. This tax applies to all inhabitants, regardless of whether they own or rent their property. The majority of employers are now obligated to withhold the employee’s share of the earned income tax. Employees are required to provide their payroll department with the “PSD Code” for the municipality in which they currently reside.

Its “PSD Code,” “711001,” and its resident EIT rate, respectively, are both zero percent. The only people who will be obliged to make quarterly anticipated payments will be those who fall into one of the following categories:

  • Self-employed
  • Working outside of Pennsylvania
  • Employed by some agencies of the federal government that are exempt from the withholding rules
  • Self-employed

If you are a Pine resident who falls into one of these categories, you should continue to make quarterly anticipated tax payments until your account is fully funded. Payment vouchers are available on the website of Keystone Collections Group. Residents of Pine who have their taxes withheld by their employer are still expected to submit the yearly Final Earned Income Tax Return by April 15th of the following year, regardless of whether their taxes are withheld. Keystone Collections should be contacted if you need to file your tax returns.

Information for Employers

Earned income tax withholding will be mandated for all employers with work locations in Pennsylvania, including home-based companies, beginning in 2018. If the employee’s home district tax rate is higher than the nonresident tax rate of the employment area, the employer is required to withhold the higher of the two. AResidency Certification Form (PDF) must be completed by each employee and returned to the employer. This form will indicate the employer which Political Subdivision the employee resides in.

This document will be used as an addition to the W-4 form and will be maintained on file with their personnel files.

Out-of-State Employers with Home-Based Employees

Employers based in other states with workers who work in Pennsylvania are subject to the same withholding obligations as employers based in the state of Pennsylvania themselves. Please complete the Keystone Collections Group registration form.

Employees Working in Pennsylvania Who Live in Another State

When employees travel to Pennsylvania from another state or when they remain in Pennsylvania for a short period of time but have their legal abode in another state, they must pay a Nonresident Tax to the employer at the workplace site. Non-resident employees who work in Pine are required to pay a half-percentage tax. In order to distinguish between nonresident and resident personnel, employers should use the PSD code”880000″ on their quarterly reports.

Earned Income Tax

A half-percentage point earned income tax is levied by the Middletown Township Earned Income Tax (0.5 percent ). Residents of Middletown Township, as well as nonresidents who work in the Township, are liable to the tax, which is levied on their earned income and collected by the Township. Individuals with annual earnings of less than $12,000 are exempt from paying the Earned Income Tax (EIT). Working in Middletown Township as a nonresident is only required to pay the Earned Income Tax to Middletown Township if the nonresident’s municipality of residence does not impose its own Earned Income Tax.

Keystone Collections Group has been designated as the Earned Income Tax collector for Middletown Township and the whole county of Bucks, effective immediately.

In addition, Keystone offers all of the appropriate forms, connections to more information, and payroll instructions for residents and business owners on its website, which may be found at: www.keystonecollects.com.

You will need to register with and pay the tax directly to Keystone Collections Group if you work in a country where it is not withheld, or if you are self-employed in a jurisdiction where it is not withheld.

Keystone Collections Group can provide you with a copy of the yearly return. If you have any more inquiries, please do not hesitate to call Keystone Collections Group at 866-539-1100.

Earned Income Tax (EIT)

616 Germantown Pike Lafayette Hill, PA 19444 (610) 825-3535 616 Germantown Pike Lafayette Hill, PA 19444 Berkheimer’s Bridgeport, Connecticut, office Office Hours: 9:00 a.m. to noon, 1:30 p.m. to 4:00 p.m., 62 West 4th Street, Bridgeport, PA 19405, 1-866-225-8451.

Real Estate Tax Payments

The Berkheimer Company’s mailing address is PO Box 25144 in Lehigh Valley, Pennsylvania 18002-5144, and its phone number is 1-866-225-8451.

Hours

The working week is Monday through Friday. 8:30 a.m. to 4:30 p.m. Monday through Friday Directory of Employees TAX BILL FOR REAL ESTATE IN 2022 IMPORTANT DUE DATES: The last day to make Discount Period payments for the 2022 County and Township Real Estate Tax will be on Saturday, April 30, 2022, unless otherwise noted. Unless payment is received before April 30, 2021, it will not be eligible for the 2 percent discount. Payments received or postmarked after April 30, 2022 will be added to the face period and must be sufficient to cover the face period’s total amount due.

Please keep in mind that in-person payments should be made at the Berkheimer office in Bridgeport, not at any other location.

Those who want to pay by mail should note that the payment must be postmarked before midnight on April 30, 2022 in order to qualify for the discount.

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