Local Income Tax Requirements for Employers

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. Examples of business worksites include, but are not limited to: factories, warehouses, branches, offices and residences of home-based employees.

Follow the four (4) steps outlined below in order to comply with local income tax requirements as an employer in PA:

  1. Lookup PSD Codes and Tax Rates

    Use the Address Search Application to lookup PSD Codes, EIT Rates and LST Rates. Note: You will want to print or save the report generated by the Address Search Application for future reference.

    Click here for instructions and examples for using the Address Search Application.

  2. Complete the Necessary Forms

    Using the information generated by the Address Search Application, complete the Residency Certification Form for each employee, and save a copy in the employee’s personnel file. This form allows the employee to verify that the employer is withholding the correct tax rates for the correct municipalities.

    Using the information generated by the Address Search Application, register your business with the appropriate local tax collector(s) in order to obtain a local tax ID number. Most often, the easiest way to register your business with a local tax collector is to do so directly through their website (as shown on the report generated by the Address Search Application). Alternatively, you may register your business by completing and submitting a paper version of the Employer Registration for Local Earned Income Tax Withholding form.

  3. Withhold and Remit Local Income Taxes

    If applicable, provide your local tax ID number to your payroll service provider. Quarterly filings and remittances are due within 30 days after the end of each calendar quarter. Most often, quarterly filings and remittances can be made directly through the local tax collector’s website. Alternatively, you may complete and submit a paper version of the Employer’s Quarterly Earned Income Tax Return form.

  4. Complete the W2-R Annual Reconciliation Earned Income Tax Withheld From Wages Form

    Within 30 days of the close of each calendar year, employers must complete and submit the W2-R Annual Reconciliation Earned Income Tax Withheld From Wages form to the appropriate local tax collector(s).

Additional resources:

For technical and detailed information regarding Act 32 of 2008, please refer to the Act 32 Procedure Manual.

Act 32 forms, regulations, tax collector/officer information and other resources.

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