PA Preparers

[RNuse09]

Sorry for the question but I really am stumped. I have a client who live in Lower Merion TWP, PA and works in Philly. I cannot find the eanred income tax rate for Lower Merion anywhere. When I go to the website it says TWP is now a firsl class TWP. I have also heard that if someone works in Philly and live in another TWP Philly just keeps the money. Sorry I am a new preparer. Thanks in advance.

[travis bickle]

Welcome to

Sorry for the question but I really am stumped. I have a client who live in Lower Merion TWP, PA and works in Philly. I cannot find the eanred income tax rate for Lower Merion anywhere. When I go to the website it says TWP is now a firsl class TWP. I have also heard that if someone works in Philly and live in another TWP Philly just keeps the money. Sorry I am a new preparer. Thanks in advance.

the wonderful world of Pennsylvania, Philadelphia, Politics and Taxes.

It has been a couple of years since I had to labor with local taxes in PA, but your post intirgued me because the townships where I worked were usually straightforward in the local tax forms and situations.

First, Lower Merion does not have an EIT. Please see this item:

http://www.lowermerion.org/index.aspx?page=1125

Currently, the Township levies five taxes: real estate (RET); business privilege; mercantile; local services; and real estate transfer. The Township has not imposed the following taxes that are permissible by State law: earned income/net profits; occupation; per capita; sign; amusement; and mechanical device.

Second, individuals who commute into Philadelphia to work there will pay the non-resident tax to the city of Philadelphia AND they can use that payment as a credit on their residential township's Earned Income Tax if extant. In order to obtain that credit they must provide their residential township with a copy of the Philadelphia non-resident tax form. I am unable to recall any situation wherein a tax payer received a refund of the local Philadelphia tax since it is levied at a straight percentage of income earned with no provision for deductions, exemptions, etc. If you want some reading [and perhaps file] material on this topic, please refer to: http://www.lowermerion.org/archive/rhenryrpt3.htm . The information there is too lengthy to reproduce here, but it essentially says that Philadelphia gets first dibs.

Third, and final please note the tax rates shown in the left column area of this website: http://www.township-directory.com/Mo...r%20Merion.htm .
It shows there a 0.5% Municipal Earned Income Tax and a 0.5% School (District) Earned Income Tax (these are the normal apportionments in that region by the way). Since Lower Merion does NOT have an EIT, these funds would be generated from the Business Privilege Tax levied on employers.

As a side note, if the townships in your area have some form of email notification for NEW EVENTS I would think that you would be wise to subscribe to them in order to stay abreast of local tax issues.

Hope this helps.

[KBTS]

For future reference on PA local taxes:

Here is a website that the state maintains with all the local EIT information - including rates and the tax collector.

http://munstatspa.dced.state.pa.us/Registers.aspx

One of the links on the side will let you enter an address and it will search for the taxpayer's municipality.

[Bert73]

I was going to post the same link to http://munstatspa.dced.state.pa.us/Registers.aspx but I think Rnuse already used that site. I looked up Montgomery County, Lower Merion Twp. and it gave me the same message that Rnuse got.

Thanks Travis, Eventhough I live on the other side of the state, ( I have done a few Eastern Pa returns) I have never run into this!

[RNuse09]

Just make sure

Thanks so much for your response your a life saver. My client does not have to file a local at return siince Lower merion does not have an earned income tax return and the client had 4% deducted for the philadelpha tax from his pay. His wife works where there is a 1% withholding since lower merion has eanred income tax would I be entitled to get that abck for her. I graduated with an Accounting degree and passed the enrolled agent exam, I wish there would have a class in local taxes.

[travis bickle]

When a PA taxpayer

Thanks so much for your response your a life saver. My client does not have to file a local at return siince Lower merion does not have an earned income tax return and the client had 4% deducted for the philadelpha tax from his pay. His wife works where there is a 1% withholding since lower merion has eanred income tax would I be entitled to get that abck for her. I graduated with an Accounting degree and passed the enrolled agent exam, I wish there would have a class in local taxes.

pays non-resident EIT to a township, the only way they can "get the money back" is to claim their payment on their residence city EIT form. If there is no residence EIT form, then they made a donation to the cities where they work.

And a tip of the hat to KBTS and Bert73 for the excellent website reference.

[BP.]

Same topic- slight hijack . . .

Hey PA people- do you have a new EIT collector for your jurisdictions this year? We lost Berkheimer, but now have Keystone, for most, but not all, of my clients' jurisdictions.

The Municipal Register is more vital to me this year than before, to check on all the various collectors & EIT rates.

0.5% Municipal Earned Income Tax and a 0.5% School (District) Earned Income Tax (these are the normal apportionments in that region by the way)

No "normal" any longer. Many jurisdictions have moved off the 1% rate, and they can range in my area from 1% up to 2.5% in various 1,000's of a percentage point (notwithstanding Philly wage tax- 4 something %.)

[KBTS]

No changes around my area - still mostly Berkheimer. Not sure what will happen when the local EIT consolidation takes place. Any idea of the timetable for the single collector system (per county) going into effect?

[BP.]

No changes around my area - still mostly Berkheimer. Not sure what will happen when the local EIT consolidation takes place. Any idea of the timetable for the single collector system (per county) going into effect?

Ours went into effect 2011, but some jursidictions around here elected last qtr of 2010 to start. I mean, why not complicate something that was meant to simplify?

[Bert73]

Bp

In my area, there is 3 big taxing Authorities( Berkheimer is one) and about 7 that take care of the school tax portion. Every area is taxed at a different % and most are split going to 2 different addresses. The 10 Authorities have their own rules on how they want things done.
Every year I have to go through the site from above and change my local book, and print up new address labels. Wish we only had one to worry about!

[Terry]

At the last seminar I attended, the speaker said the law takes effect 1-1-2012, and asked the local collector's that were they on the panel if they would like to come back for another round table at the end of this year (2011), to help us all get geared up for the changes.
Some counties did elect early adoption, but some did not.

[BP.]

and print up new address labels

Yes, totally need to print labels, 'cause the collectors give those labels that have to be moistened- yuck!!