PA Preparer RE Local Earned Income

[TaxLadyinPA]

This question is in regards to LOCAL EARNED INCOME TAX

I know the PA preparers just love Local Earned Income Tax so much.....

I am from the old school. In my day an employer withheld from employee and filed quarterly sending the money to the school district where the employer was located. On the W-2 the employer would put the school district where it was located on the local box. Then when the employee filed his tax return to his local school district the w-2 told the school district who had the money that was withheld.

NOW …. These big companies (PAMS, Berkheimer, Central Tax Bureau) are all trying to force the employer to file quarterly returns to ALL the school districts that their employees live in, send the money to the correct district and put the twp/boro that the employee lives in on the w-2.

I have small employers who can't afford to pay me or anyone to do 4 different school district quarterly reports (And I am NOT doing these for free). And I know there are huge businesses (i.e. hospitals, foundries, etc) that have employees from many many many school districts and there is no way that I will believe that they are doing so many district returns.

What I want to know is ……. Is there a BOOK that I can buy that tells what the State Guide Line is for the law of local earned income tax. I know that each school district makes many of their own rules but they have to follow a state guideline from someplace.

Is this a new law that states an employer MUST withhold and file to many school districts?? Or is this just these big agencies laziness trying to force employers to do the job the agencies are actually hired to do??

I want to know what the law is ….. before I dig deeper into each school district in my area.

Thanks for your input

[BP.]

This question is in regards to LOCAL EARNED INCOME TAX

I want to know what the law is …..

PA Local Tax Enabling Act- http://www.scribd.com/doc/21978124/P...x-Enabling-Act

[KBTS]

I have never read the law to see what it has to say, but I know I see tax clients with W2's from large employers that do not withhold any local taxes..it is just too much hassle to try and figure out all the rules and/or file multiple returns for all taxing districts. For my payroll clients, I follow your procedure and only file the local taxes with one taxing authority. From my experience with Berkheimer, I would guess they are trying to force employers to file all those returns to save themselves the work.

I'm not sure if you are aware of Act 32 or not, but here is a link to the state's webpage:

http://www.newpa.com/get-local-gov-support/tax-information/dceds-act-32-eit-collection-system/index.aspx

This law basically says each county will have a single collector, which all employers in that county will submit the quarterly taxes.

[TaxLadyinPA]

First I want to thank you both for responding.

BP: That is the same copy of law that I have in my possession but I truly appreciated that link as there was other things of interest there also.

KBTS: From what I know Employers are required by law to withhold at least 1% local withholding, but as you say … there are many big employers who refuse… including at one time The Post Office which they too finally conformed to the law. And out of state companies coming into PA to work are suppose to follow the 1% rule, but they never do either (i.e. construction companies, pipelines, gas, etc.).

One large place in my area is in a 2% district and they ended up telling their employees that no matter where they lived they would withhold the 2% from all. My clients that worked there but lived in a still 1% district were all upset until I told them that the alternative was the company would withhold none and they would have to make estimated payments to their school districts. They suddenly all liked the idea of getting a refund even if it did mean that was money out of their weekly pay. (no one likes to make estimated payments)

I was aware of the Act 32 but I did not have a copy of it so I am very appreciative of your link.
I am glad to hear that there is someone else of the old school doing things the way I do and that I am not entirely wrong in the way I do it.

Thanks again to you both.