Employers: Do You Have Your Act Together?
And by act, we mean Act 32, which consolidates Pennsylvania’s tax collection systems, reassigning Earned Income Tax from each individual school district into a county wide Tax Collection District. This consolidation has resulted in a myriad of changes that employers must follow, beginning with the first payroll in 2012*. Is your business ready?
One major paperwork change, for example, is that employers will be responsible for collecting ”Residency Certification” forms for each employee. This form is required by the state and will be requested in the event of any audits. A new form also must be completed by the employee each time an employee moves. Besides making sure your current employees have this form completed, we recommend updating company new hire procedures to incorporate the forms as well. Of course, all employees will need to have the explanation for the new form communicated to them as well. In addition to this new form and related compliance procedure for Act 32, employers are now obligated to withhold the greater of the employee’s resident tax (where they live) or non-resident tax (where they work). That’s right, its the employer’s responsibility to determine the greater percentage and withhold accordingly. Under withhold this, and you will be responsible for the difference in taxes due and will also potentially be subject to fines by the State.
Are we having fun yet?
hireVision Group’s HR DirectLink services are ready to assist you with these and other tax compliance issues. To our current HR Direct Link clients: We will be discussing with you in the upcoming weeks about how we can best assist you with meeting these new requirements. If you currently utilize hireVision for Payroll Administration, we will work directly with your payroll provider to ensure the requirements of Act 32 are met.
- To determine who will be serving as your local tax collection officer, click the following link: http://www.newpa.com/webfm_send/1567.
- More information about Act 32 can be found at www.newpa.com, then by clicking on the link for information about EIT and PSD codes.