Pennsylvania Act 32 of 2008 changed the way the Earned Income Taxes are collected. Act 32 is a law that streamlines and standardizes the local earned income tax system. Act 32 reduces Pennsylvania’s number of Earned Income Tax (EIT) collectors from 560 to 21. Act 32 requires uniform withholding of earned income taxes and remittance to a single local collector or Tax Officer. The act applies to the earned income taxes levied and collected after December 31, 2011.
Beginning with the tax year 2012, Berkheimer Tax Administrator has been contracted to collect the Earned Income Tax. The Borough of North East also contracted Berkheimer to collect the Local Services Tax (LST) beginning with the tax year 2012.
Residents of the Borough of North East who have earned income are required by local ordinance to file a local return with the tax office. Filing is required even if the taxpayer’s employer withheld local tax from wages and no tax is due.
Employers within the Borough of North East are required to withhold the 1% local earned income tax from ALL employees, and to file quarterly and annually with the tax office.
Employers are also required to withhold the Local Services Tax ($52 per year) from employees. The LST must be assessed and collected on a prorated basis determined by the number of payroll periods established for the calendar year. Employers are required to exempt employees whose total earned income and net profits from all sources is less than $12,000 for the calendar year. Employees must file an annual exemption certificate to receive the exemption. If no exemption request is submitted and the employee does not meet the exemption amount by the end of the year, a refund request may be submitted by the taxpayer. Refund forms and exemption certificates are available on Berkheimer’s website.
For more information on filing requirements or forms, please go to Berkheimer’s website: www.hab-inc.com