Important Notice for Pennsylvania Employers

1. NEW UPDATE
NovEmbEr 17Th
IMPORTANT NOTICE FOR PENNSYLVANIA EMPLOYERS
Pennsylvania Act 32 of 2008 provided for the restructuring of the Earned Income Tax Collection
System for local governments and school districts covered by the Local Tax Enabling Act. As
of January 1, 2012, the Earned Income Tax Collection System will be restructured into 69
Tax Collection Districts (TCD), predominately based on county boundaries. The collection of
taxes for each TCD will be handled by a “certified” tax collector designated by Pennsylvania’s
Department of Community and Economic Development (DCED). Employers must fully
implement the changes contained in Act 32 beginning on January 1, 2012.
A properly completed certificate requires
What employers need to do as a listing the appropriate Political Subdivision
result of amendments to Act 32 Code (PSD) for each Pennsylvania-based
employee’s lived in and worked in localities.
The certificate refers to the information
1. RegisteR With the AppRopRiAte tAx necessary to look up the appropriate
ColleCtoR (if NeCessARy) PSD codes.
Employers should ensure that they are
3. estABlish psd Codes ANd tAx RAtes foR
registered with the appropriate Certified
eACh peNNsylvANiA-BAsed WoRkeR
Tax Collector for their area. To determine
the appropriate tax collector go to Update
http://munstatspa.dced.state.pa.us/, and Employers will now be required to withhold
indicate your county or municipality. and report local income taxes for all
employees, whether resident or non-resident,
2. hAve eACh peNNsylvANiA-BAsed working in their Pennsylvania business
WoRkeR Complete A “ResideNCy location. The withholding tax rate will be
CeRtifiCAtioN foRm”. determined for each employee by comparing
Employers will need to have all Pennsylvania- the highest rate between their non-resident
based employees complete a “Residency worksite and residence location rates. The
Certification Form”. This form can be found employer should withhold and remit the
on the DCED’s website at www.newpa.com higher of the two tax rates to the Certified
in the forms section or by using the link Tax Collector for each of its Pennsylvania
http://www.newpa.com/webfm_send/1605. employment locations.
hR. payroll. Benefits.

2. Employers will also be required to report 4. Notify AffeCted employees of
a PSD code for both the residence and ANy ChANges
employment locations of each employee It may be helpful to advise Pennsylvania-
when remitting and filing withholding based employees that their local income
tax reports. The assigned PSD code tax withholding may change beginning in
for Pennsylvania local jurisdictions can 2012; particularly if you did not withhold
be found at http://munstatspa.dced.state. local taxes for jurisdictions outside of the
pa.us/ and entering the applicable county locality in which your business is located.
and/or municipality. PSD codes can also be Some employees are likely to notice a
found by using the “Find Your Withholding change in the amount of their withholding
Rates by Address” link http://munstatspa. for the Earned Income Tax (EIT).
dced.state.pa.us/FindLocalTax.aspx.
About Adp
ADP is committed to assisting businesses with increased compliance requirements resulting
from rapidly evolving legislation. Our goal is to minimize your administrative burden across
the spectrum of payroll, tax, HR and benefits, so that you can focus on running your business.
Neither the content nor the manner in which this notice is presented reflects the thoughts
or opinions of ADP or its employees. This notice is provided as a courtesy to our clients, to
assist in understanding the impact of certain regulatory requirements, and should not be
construed as tax or legal advice. Such information is by nature subject to revision and may
not be the most current information available. ADP encourages interested readers to consult
with appropriate legal and/or tax advisors.
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adp.com Last updated: November 17, 2011