Withholding Earned Income Tax From Your Employees
Earned Income Tax Collection Reform (ACT 32)
In 2008, Pennsylvania passed the Earned Income Tax Collection Reform, or ACT 32, to change how PA's local income tax system worked. Employers with worksite locations in Pennsylvania are required to withhold and remit Earned Income Tax (EIT) and Local Services Tax (LST) on behalf of their employees working in PA.
Within fifteen (15) days of becoming an employer, you are required to register with the Tax Officer in your municipality using the Registration Form promulgated by the Department of Community and Economic Development (DCED).
On or before the last of February following the close of the calendar year, employers must complete and submit a W2-R Annual Reconciliation form with EIT withholding detail to the Bureau.
Employer Local Income Tax Requirements
Find Your PSD Codes
Register Your Business
Register Your Business
If you're not sure of your work location's PSD code, use the DCED Address Search Application to search by work or home address.
Use the Earned Income Tax Rate Lookup or the Local Services Tax rate lookup tools to find your tax rates:
Register Your Business
Register Your Business
Register Your Business
Employers who have PA resident employees must complete a Residency Certification Form for each employee. Using the information found using the DCED Address Search Application, register your business with YATB in order to obtain a local tax ID number.
Withhold Local Taxes
Register Your Business
Annual Reconciliation
Quarterly filings and remittances are due within 30 days after the end of each calendar quarter, and can be filed online using PALite.
Alternatively, you may complete and submit a paper version of the Employer's Quarterly Earned Income Tax Form.
Annual Reconciliation
Register Your Business
Annual Reconciliation
On or before the last day of February following the close of the calendar year, employers must complete and submit a W2-R Annual Reconciliation Earned Income Tax Withheld From Wages form to the Bureau.