How PA ACT 32 is Affecting Businesses

Pennsylvania ACT 32 was enacted a few years ago by our state legislature in regards to filing and collecting the appropriate and correct Earned Income Tax by each employee of a company or organization.

The legislation started on January 1, 2012, affecting all Suburban Philadelphia and Pittsburgh businesses and organizations.

As a business owner, you are required to have each of your employees fill out a Pennsylvania Local Jurisdiction Form.

The form requires each employee to fill in their home address and the municipality they live in.  The employer fills out the portion of their official business address and municipality.

For example, just writing down Newtown doesn't suffice.  The employee needs to write down for municipality Newtown Borough, Newtown Township, Upper Makefield Township or Lower Makefield Township.

The employer is required to remit the higher of the earned income tax, whether it be where the employer business is located or where the employee lives.

The two biggest agencies handling ACT 32 are Berkheimer and Keystone.

Philadelphia employees working for employers outside of Philadelphia only pay Philadelphia Wage Tax.

They are however subject to the Local Service Tax of the municipality which could run from a $10 to $52 year tax.

Needless to say, I run into many business owners that either are not aware of ACT 32 or haven't complied with it since the January 1st start date.

If you have any questions or need assistance on ACT 32, please don't hesitate to call or e-mail me at 267-557-3600 X223 or ssabel@streamlinepayroll.net