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Act 32 Employer, Are You Ready?

Act 32 Employer, Are You Ready?. Kathy Johnson, PRSBA Pennridge School District March 16, 2011. Beyond the TCC. By-laws completed Auditor’s named Solicitor named Collector named Reorganization completed Budget passed for 2011 Waiting … Act-32-Countywide-Tax-Collection-Timetable.pdf.

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Act 32 Employer, Are You Ready?

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  1. Act 32Employer, Are You Ready? Kathy Johnson, PRSBA Pennridge School District March 16, 2011

  2. Beyond the TCC • By-laws completed • Auditor’s named • Solicitor named • Collector named • Reorganization completed • Budget passed for 2011 • Waiting… Act-32-Countywide-Tax-Collection-Timetable.pdf

  3. Next Steps • District as an employer • What do we need to do to get ready • Employee Communication • District as part of the tax collection district • Communicate with your employers

  4. Act 32 Overview • County-wide collection system effective January 2, 2012 • Some counties have chosen to implement the county-wide collection system prior to 2012 • Employers required to register with collector • Employers required to have employees complete DCED residence form • Employers required to deduct the greater of the rate where the employee lives or the “non-resident” rate associated with the place of employment.

  5. Employer Registration • Employers within the Tax Collection District are required to register with the collector • More than one employee • Wages or compensation paid • Household help excluded

  6. Employer Communications • Work with your EIT collector to identify employers within your TCD • Send notification of changes by mail • Work with municipalities to co-sponsor information sessions within the TCD Pennridge Seminar Ad.pdf • Prepare press release • Post to District and Municipal websites • Send to daily and weekly newspapers

  7. Employee Residence Form • Every employee required to complete • School District employees as well • Out of State employees • Withhold at non-resident rate if applicable • Form is an addendum to the Federal Employee's Withholding Allowance Certificate (Form W-4). • Requires any employee who changes his or her address to complete a new Certificate of Residency form. Residency Forms.pdf psd_codes_-_12-15-10.xls

  8. Employee Communication • Pre-fill Employer Section of the form • Prepare a brief explanation of the changes • Non-resident tax • Why the form must be completed by everyone; even long-term employees • Back-to-school • Benefits fair or in-service day • New hires • Employee Portal/website

  9. What Rate to Withhold • For information on obtaining the appropriate Municipality (City, Borough, Township), PSD CODES and EIT (Earned Income Tax) RATES, refer to the Pennsylvania Department of Community & Economic Development website: www.newPA.com Select Get Local Gov Support, >Municipal Statistics Municipal Tax Rate Summary.pdf psd_codes_-_12-15-10.xls

  10. When to Remit • No later than 30 days after the end of each calendar quarter • Monthly – under certain circumstances • Requires electronic filing • Annually Form ER-1

  11. How to Remit • Beginning in 2012, a business with employment locations in more than one tax collection district may file and pay the total amount of income taxes withheld from employees in all work locations to the tax collector for the district where the employer‘s payroll operations is located.

  12. Combined PaymentsOne Collector • If an employer chooses to file in one district for multiple workplace locations, the employer must file monthly rather than quarterly, and must report and pay withholdings electronically. • Employer must file a notice of intention to file combined returns and make combined payments with the tax collectors for each place of employment at least one month before filing the first combined return.

  13. Payroll Systems • Employers who will be filing e-returns will need to be sure their payroll systems can accommodate the PSD codes for reporting • EIT must be reported on employee’s W2 form at the end of the year

  14. Communication Plan • Identify your audience • Employers • Employees • Determine your message • Important facts • Timeline • FAQ’s • Contact Information

  15. Communication PlanContinued • Partner with municipalities • Build relationships • Contact your tax collector • Deliver your message • School District website • Tax collector website • Municipalities website

  16. Summary • A well planned and executed communication plan may enhance EIT revenue • Act 32 for all counties in effect January 1, 2012 • Are you ready?

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