h�bbd```b``�"A$�9����L�`0Y Bonita Springs, FL 34134, © Copyright 2020 Wouch Maloney & Co. LLP All Rights Reserved | Website by Mediaboom | Disclaimer, -- Select A Service --Accounting & AuditTax ServicesBusiness AdvisoryForensic Accounting & Litigation SupportBusiness ValuationEstate PlanningInternational Services, The final quarter of 2020 is upon us. These are the main income taxes: City of Philadelphia Wage Tax – This is a tax on salaries, wages, and other compensation. However, there is a Pennsylvania income tax credit for taxes paid to another state by a Pennsylvania resident. The PDF tax form for printing and mailing can be found here. }�����r���=d��VF>���7O����7����>��?���g7O���|��/_�d�y���7?� What if my employer does not stop withdrawing the tax from my paycheck? * A copy of the approved telecommuting agreement must be on file in the employee’s personnel file maintained in Human Resources. Philly’s wage tax is the highest in the nation. If you file for Pennsylvania tax forgiveness through PA Schedule SP and are approved, you may be entitled to receive a refund of 0.5% of employer-withheld City Wage Tax. 73 0 obj <>stream The Net Profits Tax is imposed on the net profits from any business activity by any individual or entity that is: The NPT return must be filed even if the business activity resulted in a net loss. Refund requests can be submitted to the Philadelphia Department of Revenue after the end of a tax year, or in 2021 for days worked outside the city during the current crisis. University City Wage Tax Refund Request form found on the University Forms channel on TUportal. �����/n�~��Κ�xhT����'��tyy����������������Z��S�y��������?�x��/ooo��w�������͛�ޮg�|���������>yv{w�Yo����ܾ��/w���v���;~C�����ޟ�&��Wo��^m�>O��:�y;����?�|���|����ϼ��[[���P���?��|��ӧ�|������v����ǿ���ͻ���R�>! endstream endobj startxref On the other hand, if you have earnings not reported and paid through a properly designed payroll system then, yes, you do file a separate tax return with the City of Philadelphia. And Eagles players who live outside the city don’t pay the wage tax when they’re at away games. Full instructions, along with a schedule of eligible income amounts and rate reductions, are included in the refund petition form. Philadelphia City Income Taxes to Know. Additionally, individuals who maintain a Commercial Activity License (CAL) must file a BIRT return, even if they didn't actively engage in any business. Below are some key tax-related…, The September/October 2020 issue of the Valuation and Litigation…, Inside the September issue we learn common tax scams announced…, Additional Guidance for Owner-Employees and Non-Payroll costs The Employee Earnings Tax return is due by April 15 of each year. Philadelphia residents who make income tax payments to local jurisdictions (like cities and counties) outside of Pennsylvania can request a refund if they also paid one of the following City of Philadelphia taxes on that same income: Calculate the return. You may also download a copy of the form online. Tom Wolf, you do not have to keep paying the city wage tax. As long as companies are requiring employees to work from home, they are exempt from the 3.4481% nonresident tax. Individuals engaged in any for-profit activity within the city of Philadelphia must file a BIRT return. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed. 93% of TaxSlayer Pro respondents reported that they continue to use TaxSlayer Pro software after switching. NOTE: This page will be updated as more resources become available. Click here for more information about completing the School Income Tax Return in TaxSlayer Pro. An authorized IRS e-file provider, the company has been building tax software since 1989. To generate the PHI Earning Tax or Wage Tax Petition, do the following: Navigate to the Pennsylvania Tax Authority. Employees who were not permitted to or did not change their tax status while working outside of the city will be able to apply for a refund after the end of the year for the days they worked outside of the city. Click here for more information about completing the Net Profits Tax Return in TaxSlayer Pro. (People who live in the city, no matter where they work, must always pay the 3.8712% resident wage tax.) If an employer does not change the tax withholding on your paycheck, or begins doing so after you’ve already been working from home for a few weeks, you can apply for a refund from the city for days worked outside the city. It isn't filed by self-employed individuals or partners in a partnership, both of whom will file the Business Income & Receipts Tax Return and/or the Net Profits Tax Return. The completed petition form must include the following: • W-2 showing Federal, State, Medicare and Local wages • Statement of dates worked outside the City of Philadelphia signed by both the employee and the employer • Signatures from both the employee and the employer Any refund claim must be filed within three (3) years from the date the tax was paid or due, whichever date is later. Q: How will I receive the refund of Philadelphia Wage Tax? Get an in-person appointment with a Law Department representative by calling (215) 686-0500. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. News, ideas, and advice to keep you informed and ahead of the curve. If you’re approved, you should receive your refund in July of the year in which you apply. �"��A$����e�&%$Xo��}�%H2Z�#��!�( �?h&�U��*�����K� �3r Use the forms linked on this page to apply for the Wage Tax for salaried or commissioned employees. At its height, the Philadelphia Wage Tax reached 4.96% in 1985. TaxSlayer Pro makes tax filing simpler and less stressful for millions of Americans with exceptional, easy-to-use technology. If you requested a refund on your return, you do not need to fill out these forms. ��S� Since 1939, the City of Philadelphia has imposed a tax on the net profits of resident businesses as well as nonresident businesses to the extent their business was conducted in the city, and since 1940 the city has imposed a tax on the wages of Philadelphia residents and nonresidents to the extent they worked in the city. The Earnings Tax and the Wage Tax refer to the same tax, and an employer with nexus in Philadelphia will normally withhold and remit the Philadelphia Wage Tax on its employees. Do you still have to pay the Philly wage tax if you’re working from home in suburbs due to coronavirus? However, resident employees may use these forms to apply for a refund based on deductible, non-reimbursed business expenses. Show full articles without "Continue Reading" button for {0} hours. Workers will essentially receive a 3.4481% increase in take-home pay during the time they are working from home. And more than 240,000 residents commute to Philadelphia from surrounding counties in Pennsylvania, New Jersey, and Delaware, according to an analysis of U.S. Census data completed last year by the Pew Charitable Trusts. Visit The Philadelphia Inquirer at www.inquirer.com. Provide documentation of the taxes you paid in the other jurisdiction. The exemption from the wage tax only applies if a Philadelphia-based employee is required to work outside the city. Be certain your payroll systems are updated to reflect the increased non-resident tax rate. The City of Philadelphia has several municipal tax returns that an individual taxpayer may need to complete if they lived in and/or worked in the city. Call our tax information hotlines between 8 a.m. and 7:30 p.m., Monday to Friday. In most cases, employers provide the refund petition at the same time they provide employee W-2’s or comparable forms. Since the mid-1990s, rates have slowly dropped. So if your company decides remote work was so effective during the coronavirus pandemic that it is closing its offices forever, non-Philadelphia employees can stop paying the tax. 3333 Renaissance Boulevard But did you know that certain low-income taxpayers may qualify for a 0.5% reduction in their Philadelphia Wage tax and are due a refund? The wage tax, which raised $1.7 billion in revenue for the city in the last fiscal year, accounts for more than one-third of the city’s annual general fund revenue. How much does it cost — or save — workers to commute across state lines?Will this hurt the city financially? The NPT is paid in two installments during the year, on April 15 and June 15, and each installment must be at least 25% of the prior year's NPT. “No other jurisdiction comes particularly close in levying a wage or income tax at the local level at such rates,” said Jared Walczak, a senior policy analyst for the Tax … Refund requests can be submitted to the Philadelphia Department of Revenue after the end of a tax year, or in 2021 for days worked outside the city during the current crisis. Philadelphia has the highest local wage tax in the country — and the city relies on it for about 44 percent of its annual revenue. Note that if you live in a municipality with its own earned income tax you may have to begin paying those taxes for the time you are working from home. But that doesn’t necessarily mean you can stop paying the tax forever. As always, if you have questions about this or other topics, please know we are available to speak by phone at 215-675-8364 or you may reach us via email at [email protected]. “My sense is that that would be a fairly sizable exemption and have fairly sizable impacts on the nonresident wage tax,” said Robert Inman, a finance professor at the University of Pennsylvania. [���w�_�����?��=m7��n��S���te��^��{���߯�C�������y�V���6���~ú�{q��v�wO_ا���峛�nz���}ы7������}���gV��f������'�>{��y�/��iq�Y�g���;&m�ҁ��ϸ�aO{l�\�Tʹｏs�v;㧔�9�]�B'jNt]K��h�_�S(Ž�|Ne[�^�9��nv|�9��n����Q��Ѷ���P��C5�P���fy�Q��n�l:�� g�&�#�j�nk�-j�5�V��ͪ��ǹ�z==:E�����q��?t�4�z����3��Rk}��:${l�����Nm7߿���/���)m��c#���!2���S���l ~��‡D�?��~�՛W/>Ii�J��!����Lo��Лc:�_���ծ��L��|���d�5Q����n�NNFC�z\ߙ'�f�CSn� ,cj�t���t��~��r�q�(��O���S~;��������Bq�����k�^(�d�� ���Sܷ�������X+a�ߜ/�Ge�IZ��B8�o#�mo��mg[?�Yv��E�:{v�Mv]�W����!I3t9�3��+X�z ��?e�k��i��?Ez���D�����ٲK�E��. The SIT return must be filed and paid by April 15 of each year. In most cases, employers provide the refund petition at the same time they provide employee W-2’s or comparable forms. The new wage tax rate for non-residents of Philadelphia, who are subject to the Philadelphia city wage tax, is 3.5019% (.035019). Click here for more information about completing the Employee Earnings Tax Return in TaxSlayer Pro. Some of those modifications may be significant. Relief from the wage tax may be good news to suburban residents, but it will add to the already damaging impact of the pandemic on the city’s finances. Philadelphia employers are required to give an income-based Wage Tax refund petition form to employees by February 1. The NPT return doesn't replace the BIRT return, although a credit for BIRT may be taken on the NPT return. The documents below are meant to provide guidance to taxpayers and tax professionals as the City of Philadelphia adapts to disruptions caused by the COVID-19 coronavirus epidemic. Business Income & Receipts Tax Return (BIRT). %PDF-1.6 %���� Philadelphia employers are required to give an income-based Wage Tax refund petition form to employees by February 1. The BIRT return must be filed and paid by April 15 of each year, and the filing must include payment for an estimate of the following year’s BIRT. h�b```c``�f`e`0�� Ȁ �,@Q���@�=���b��CFs�8:::2@X�30YEi1 �30�m�x6>�T��,G�w2��La`��a��a`�cch����d���� w'�;D���y�| |FN� �G� Some nonresidents are continuing to commute to Philadelphia for jobs at hospitals, grocery stores, and other essential businesses. Please check this webpage regularly … If you do not find guidance for a specific tax type below, that means there has been no change. About 40% of wage tax revenue is paid by nonresidents, according to the city’s financial data. For questions about City tax refunds, you can contact the Department of Revenue by emailing the Tax Refund Unit or calling any of the following phone numbers: Philadelphia residents who make income tax payments to local jurisdictions (like cities and counties) outside of Pennsylvania can request a refund if they also paid one of the following City of Philadelphia taxes on that same income: Diversity, inclusion, accessibility & immigration, Get a building permit for a tank to store hazardous materials, Get a Make Safe Permit for a dangerous building, Get an assigned plans examiner for a multi-phase project, Get an Electrical Permit to install solar panels, Get approval for construction in the floodplain, Register in eCLIPSE as a design professional or attorney of record, Request a preliminary review of construction projects, Submit as a PA Home Improvement Contractor to get construction permits, Get a dust control permit for construction and demolition, Request a permit for a septic 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