Earned Income Tax

Act 32 – Local Earned Income Tax

What is Act 32?

Act 32 is a law that reforms and standardizes the local earned income tax system. The appointment of collection responsibility falls on countywide committees made up of representatives from local municipalities and school districts. The committees established tax collection districts and elected tax officers to collect the Earned Income Tax (EIT).

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.

Employers must begin to withhold the local EIT from employees on January 1, 2012. Appointed tax officers start collecting the EIT on January 1, 2012, unless the tax collection district has opted for early implementation.

Act 32 – Taxpayer Responsibilities

What are the steps required by the Employee under Act 32?

Step 1. – Provide complete street address of residence, (PO boxes, Rural Routes or Rural Delivery box numbers are not acceptable) sign and date Residency Certification Form and file with Employer. The employee must provide updated information, sign and date a new form upon change of address.

Step 2. – If an individual is self-employed or obtains compensation other than through an employer/business entity, a Quarterly Estimated Earned Income Tax coupon must be filed with the Tax Officer for the tax collection district where the individual resides, within 30 days following the end of each quarter of the calendar year.

Step 3. – No later than April 15, every employee must complete the Taxpayer Annual Local Earned Income Tax Return and file with the Tax Officer of the tax collection district where the employee resides. Any outstanding local earned income tax obligation must be remitted with this return.

Parryville’s ACT 32 PSD Code:  130205