Pennsylvania Employers– Be Ready for Act 32

Pennsylvania Act 32 legislation requires county wide collection of local earned income tax (EIT).  Starting January 1, 2012 there will be ONE local earned income tax collector for each Pennsylvania county (Philadelphia is exempt under the Sterling Act and Allegheny County will have four EIT collectors) and imposes certain new responsibilities upon employers.  In summary, EVERY employer is REQUIRED to properly withhold EIT.  Initially, employers must obtain accurate residency certificates from all employees.  There are numerous other implementation issues.  With the January 1, 2012 deadline looming, employers should be taking steps now to ensure they are ready for the new EIT requirements.  In addition to obtaining residency certificates, in house payroll personnel should be directed to prepare and to consult outside accountants, payroll service providers, software vendors and other applicable parties as necessary.   Detailed information is available at Department of Community and Economic Development website.