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    Pennsylvania local taxes

    I'm in Wisconsin so don't see many PA returns. Client moved from PA mid-summer and has W-2's from PA:
    1) husband
    Box 18, 19, 20: $17542, $87.74, PA NORTH EAST
    Box 18, 19, 20: $17542, $87.74, PA N EAST

    2) wife
    Box 18, 19, 20: $7839, $78.38, PA0693
    Box 18, 19, 20: $7839, $10.00, OPT

    3) wife
    Box 18, 19, 20: $9289, $92.91, PA0693
    Box 18, 19, 20: $1361, blank, OPT

    I included all these amounts on Fed Sch A as Local Taxes paid. Do I do anything with these amounts on the PA 40? Are there any local tax returns that should/must be filed? Also, the husband's W-2 -- not sure if that's a misprint with the same amount being on two lines and the NORTH EAST vs. N EAST.

    Any insight would be wonderful!

    Thanks,
    Bill

    #2
    PA Returns

    All the amounts except for the OPT (Occupational Privilege Tax) are deductible as local taxes paid on Sch A.. The $10 flat tax for the wife is only deductible as a miscellaneous deduction subject to 2% of AGI – see “Occupational Taxes” in chapter 28 of Publication 17 for details. The amounts do not go on the PA-40.

    It looks like your clients had 1% withheld for local taxes, which is kind of the standard amount in much of PA. The husband’s is split out on the W-2 due to half the amount going to the school district he lived in and the other half going to the township/city. Unless the taxing authority forwarded the tax forms to your client, you will have to find out who they should file with. This website lets you search by address to find the local tax rates and collectors http://munstatspa.dced.state.pa.us/Registers.aspx

    The correct amount was probably withheld so you could always take the chance and not file anything, but it could come back later to haunt the client especially if they lived in an area where Berkheimer Associates is the tax administrator. They have a nasty habit of coming back on a taxpayer years later with notices and big fines for not filing a return – even if one did not need filed. I had a client this year that did not pay a $10 per capita tax several years ago and now Berkheimer is trying to collect and the amount was $175 and climbing.

    Send me a private message if you need more help.

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