REV-330 -- Electronic Filing Guide for Business Taxpayers. PA Department of Community and Economic Development. You may choose to have federal income tax withheld from your UC benefit payments at the rate of 10 percent of your weekly benefit rate plus the allowance for dependents (if any). If you have any questions on the revised process, please contact Sherry Brady at sbrady@pa.gov or 717.783.1159. PSD Codes play an integral role in assisting employers and Tax Officers to remit and distribute the correct amount of local Earned Income Tax to the appropriate taxing jurisdictions. Employers with worksites located in Pennsylvania are required to withhold and remit the local Earned Income Tax (EIT) and Local Services Tax (LST) on behalf of their employees working in PA. Except for monitoring when an employee who has filed an exemption certificate earns more than $12,000, the intent of the amendment is that employers are not responsible for investigating exemptions, monitoring tax exemption eligibility or exempting an employee from the tax. As an employer, how does Act 32 and local Earned Income Tax withholding apply to me? Sign up to receive the latest Pennsylvania news, direct to your inbox. Our mission is to improve the quality of life for Pennsylvania citizens while assuring transparency and accountability in the expenditure of public funds. 400 North Street Harrisburg ... Download File Residency Certification Form Local Earned Income Tax Withholding Pdf. As an out-of-state employer, you are NOT required to complete the Residency Certification Form or withhold the local Earned Income Tax (EIT) for a PA resident employee. The more state tax withholding allowances an employee claims on their state W-4, the less you withhold. Published: April 1, 2020 Effective: Pay Period 05, 2020. The mission of the Department of Community and Economic Development (DCED) is to foster opportunities for businesses to grow and for communities to succeed and thrive in a global economy. Act 32 does not apply. If that person’s earned income from the primary employer exceeds $12,000 or the municipality’s tax collector informs the employer that the employee’s income has reached $12,000, employers “restart” withholding of the LST by withholding: (1) a “catch-up” lump sum tax equal to the amount of tax that was not withheld from the employee as a result of the exemption; and (2) the same amount per payroll period that is withheld … Pennsylvania is one of 43 states that have a state income tax and one of 14 states that have local taxes. This form needs Javascript to display, which your browser doesn't support. You do not need to register your business with the local tax collectors for your employees’ home municipalities—unless you have employees who work from home, thus establishing additional worksite locations. Follow the steps outlined on the Local Income Tax Requirements for Employers page for more information. However, there are important implications associated with doing so, including: In order to exercise the option to make combined filings and remittances, follow the steps outlined below: Employers are required to withhold the Philadelphia resident rate for employees who live and work in Philadelphia. In addition to withholding state and local income tax from employees’ wages, Pennsylvania employers must also comply with special tax rules. 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