Act 32 For Municipalities
Employers who maintain worksites in PA or employ individuals who may work from their homes are required to withhold applicable earned income tax from those employees.
Under Act 32, employers are required to withhold the higher of the employee's resident earned income tax amount (rate of total resident EIT where they reside) vs. the employee's municipal non-resident earned income tax amount (rate of total non-resident EIT where they are employed). Employers are required to obtain information in the Residency Certification Form for every employee.
What is required of the Municipality under Act 32?
Any new tax enactments, repeals or changes in rates for withholding taxes (EIT or LST) must be reported annually, on the Municipal Tax Information form. This form must be received in the Department of Community and Economic Development (DCED) by December 1, along with a copy of the fully executed ordinance/resolution, in order to be included in the Official EIT/LST/PIT Register (Official Register).
If there are no new tax enactments, repeals or changes in rates for withholding taxes or withholding collectors (EIT or LST), the Municipal Tax Information form is due by January 15, or 15 days after adoption of the budget, whichever is sooner, along with a fully executed ordinance/resolution.
Please Note: The Earned Income Tax (EIT) collector information fields in the online annual Municipal Tax Information form, available November 15th, will be automatically populated by DCED based on your municipality’s Tax Collection District. Starting November 15, these fields will be locked and you will no longer be able to access them. The paper annual Tax Information form will no longer have an area available for updating the EIT collector information. The information will be populated in the Official and Real-time Registers based on your municipality’s Tax Collection District.
The Local Services Tax (LST) collector information fields in the online annual Municipal Tax Information form will remain open in both the online and paper forms. Any changes in LST collector name and/or contact information that is effective January 1, must be received in DCED by December 1, in order to be included in the Official Register.
|Due to the large call volume, please complete the contact form for Act 32 related issues in order to expedite your assistance request.|