Act 32 Changes for Employers
On July 2, 2008 Governor Rendell signed Act 32 into law. Act 32 amends the Local Tax enabling Act to consolidate the collection of Earned Income Tax (EIT) on a county wide basis. Employers in Avis Borough, Crawford Township and Pine Creek I Township must file with the Lycoming County Tax Office starting with the First (1st) Quarter of 2012. Act 32 also changes the withholding and reporting requirements for employers. For further information about Act 32, visit our website at www.wasd.org/taxoffice.
How does this affect you?
1. Registration of Employer.
The law states ‘every employer having an office, factory or other place of business within the Tax Collection District (TCD) who employ one or more persons, other than domestic servants, on a salary, wage, commission basis or other compensation shall within fifteen (15) days after becoming an employer, register with the Tax Office’. The Employer Questionnaire is available on our website.
2. Residency Certificates
Effective 01/01/2012, all employers are required to have a current Certificate of Residence Form on file for each employee, copy enclosed. You must have each current employee and all future employees complete this form and maintain it with their payroll records. Each employee that changes his/her residential or domicile address, after completion of the initial residency form, must complete a new certificate.
The form requires a PSD Code for where the employee is domiciled and a PSD Code for the municipality the employee works in. A link to the PA Department of Community and Economic Development website is available on our website. We have also provided a listing on our a website of the Lycoming County Tax Collection District codes.
The reports that you are required to file quarterly now must include the employee’s social security number, name, address, employee’s domicile PSD code, quarterly wages, quarterly tax, and the work location PSD code.
3. Employer required withholding.
Act 32 requires all employers to withhold the local earned income tax from all employees. The tax must be withheld at the higher of the employee’s domicile tax rate or the municipality’s non-resident tax rate of the municipality where the employee works. The employer will be held liable for any additional tax due for each employee if he/she fails to withhold the correct amount of tax, when a current residency certificate is on file.
4. Remittance by employer
Effective for the first (1st) quarter of 2012, employers must file a return and pay any balance due by the last day of the month following the end of the quarter. The return must contain the names, addresses, social security numbers, gross wages, amount of tax withheld, the employees PSD code and the work location PSD code. Employers who withhold tax amounting to more than fifty dollars ($50.00) during the first or second months of any calendar quarter, shall remit the actual amount of tax withheld to the Municipal & School Earned Income Tax Officer on or before the fifteenth (15th) of the month following the month during which the tax was deducted. Those employers that currently submit payment each payday may continue to do so. The tax returns will be submitted quarterly.
All employers with ten or more employees will be required to file electronically. Electronic filing instructions are available at www.wasd.org/taxoffice.
Any employer who discontinues business shall, within thirty (30) days after discontinuance of business, file returns and pay the income tax due.
ALL TAX RETURNS SUBMITTED AFTER THE DUE DATE WILL BE ASSESSED INTEREST AND PENALTY IN ACCORDANCE TO THE LAW IN ADDITION TO A LATE FEE OF $20.00.
The law also allows employers with business locations in multiple Tax Collection Districts to file all employees on one consolidated tax return. Multi-location employers who have their payroll operations located within the Lycoming County Tax Collection District or multi-location employers who have their payroll located outside of the Commonwealth of Pennsylvania or in the City of Philadelphia may elect to file a combined return of all employees who are employed within the Commonwealth of Pennsylvania to the Lycoming County Tax Collection District. Employers who elect to file combined returns and combined payments are required to file electronically both the detail and the payment on a monthly basis. Any employer who elects tofile a combined return must file aNOTICE OF INTENTION TO FILE COMBINED RETURNS AND MAKE COMBINED PAYMENTS with the tax officer for each employment location at least one month prior to filing the combined return and making the combined payment of tax. The Tax Office should be contacted for additional information regarding consolidated returns.
5. Failure to comply.
Any employer who, for two of the preceding four quarterly periods has failed to deduct the proper income tax or any part of the income tax or has failed to pay the proper amount of income tax as required to the appointed tax collector, may be required by the tax officer to file returns and make payment of the income tax monthly.
Any employer required to withhold income taxes from his/her employees who willfully fails to collect and remit the taxes commits a misdemeanor and shall, upon conviction, be sentenced to pay a fine not exceeding $25,000.00 or imprisonment not exceeding two years or both. Failure to receive forms to file the advance payments or quarterly returns, does not excuse the employer from filing the return in a timely manner.
You are entitled to receive a written explanation of your rights with regard to the assessment, audit, appeal, enforcement, refund, and collection of the earned income taxes. The written explanation is entitled Municipal and School District Earned Income Taxpayers Bill of Rights Disclosure Statement. Upon receiving a request from you, the Municipal and School District Earned Income Tax Office will give you a copy of the Disclosure Statement at no charge. You may request a copy in person, or by mailing a request to the following address:
2790 West Fourth Street
Williamsport, PA 17701
A copy will also be mailed to you if you call the Municipal and School District Earned Income Tax Office at the following number: 570-601-3980
You may call the above telephone number or appear in person at the above address to request a copy during the hours of 8:00 a.m. to 4:00 p.m. on any weekday other than a holiday.
|Initial notice||No Cost|
No payment attached or failure to attach appropriate schedule(s)
|All Subsequent Notices||$20.00|
|Certified Notice||$20.00 plus mailing cost|
|Payment Plan||$20.00 per year|
|Civil Complaint||$25.00 plus mailing cost|
|Failure to File/Audit Letter||$20.00|
|Late Filing Fee/Individual||$20.00|
Returns filed after 10/15 of the year due
|Late Filing Fee/Employer||$20.00 per quarter|
|Wage Attachment||$20.00 plus mailing cost|
Send questions or comments to:
Ms. D.E. Hilliard
Mrs. Mel Rockey