Philadelphia resident with taxable income who doesn’t have the City Wage Tax withheld from your paycheck. Philadelphia residents working outside of Pennsylvania are now eligible to claim a credit against their Philadelphia Wage Tax for taxes paid to localities outside of Pennsylvania. All Philadelphia residents owe the City Wage Tax, regardless of where they work. Non-Pennsylvania residents who work in Philadelphia but do not file a Pennsylvania income tax return must include a signed copy of their state income tax return to be eligible for the income … Answer: Nonresident employees of Philadelphia are eligible for a Philadelphia wage tax refund on work performed outside of Philadelphia. I have a small withholding of Income Taxes for Philadelphia as the majority of my W-2 income is from New Jersey. There is a high likelihood you are due a refund if you lived in Philadelphia and worked in DE or NY during any of these years. Washington, D.C., has sought to enact a commuter tax to recover costs of providing city services to the approximately 300,000 people who commute to the city from suburban Maryland and Virginia. Employees working in the City of Philadelphia shall be covered under the Sterling Act. General Tax Information. Residents of Philadelphia pay a flat city income tax of 3.93% on earned income, in addition to the Pennsylvania income tax and the Federal income tax.. Nonresidents who work in Philadelphia pay a local income tax of 3.50%, which is 0.43% lower than the local income tax paid by residents. exemption from withholding of Philadelphia Wage Tax: Q: Can the university stop withholding Wage Taxes from the pay of non-resident employees who are working outside of the City at the direction of the university? It has long been a source of ire for businesses and workers. For New Jersey residents who currently elect … Solved: If I live outside of Philadelphia, but work in Philadelphia do I pay the slightly lower non- resident city wage tax rate? Be certain your payroll systems are updated to reflect the increased non-resident tax rate. Even More Taxes. City officials argue that wage taxes go toward expenses such as road maintenance and public safety, and commuters use those services. The City of Philadelphia Department of Revenue announced on March 26, 2020, that nonresident employees based in Philadelphia are not subject to the Philadelphia Wage Tax during the time they are ordered to work outside of Philadelphia. A: Yes. The tax rate, currently 3.8809 percent for Philadelphia residents and 3.4567 percent for nonresidents who work in the city, gets reduced a little bit every year. Philadelphia levies a 3.4481% wage tax on people who work but don't live in the city. At its height, the Philadelphia Wage Tax reached 4.96% in 1985. Those same non-resident workers are exempt from the tax when their employer requires them to work outside … Here is a link to four examples of how Philadelphia residents working outside of PA may be affected. The only way to escape this tax would be to work just outside the city lines in a co-working office. But still they expect a … Philadelphia does allow residents employees working in a Pennsylvania local earned income tax (EIT) jurisdiction to take a credit. Harper could save millions, however, if he lived outside the city, paying just $5.1 million in Philadelphia wage taxes in the next 13 years, the Inquirer estimated. Since the mid-1990s, Philadelphia mayors have worked to lower the rate. City of Philadelphia residents and non-residents working in Philadelphia are urged to check their paychecks after July 1, 2018, to ensure the new rate is applied. Employers can stop withholding the tax from the paychecks of non-Philadelphia residents who are now required to work remotely, city spokesperson Mike Dunn said. My company deducts Delaware (non-resident) wage taxes from my paycheck. Is this normal, and how does this affect my nj state return? But they don't receive that money from residents who work in Philadelphia, or from workers who live in the city. It does not deduct city (Philadelphia) wage taxes from my paycheck. In addition, the election should only be made in the month when the payment is received. Effective April 1, 2020 for employees paid monthly and March 28, 2020 for employees paid biweekly, the Philadelphia Non-Resident Wage Tax payroll deduction will be turned off for the applicable employee population. Tax Refund Opportunity for Philadelphia Residents Working Outside PA. Posted … Philadelphia updates Wage Tax guidance for employees ordered to work from home outside of the city for the employer's convenience On May 4, 2020, the Philadelphia Department of Revenue updated its guidance for withholding the Wage Tax from nonresident employees who are working in the city temporarily due to COVID-19; the previous guidance was published on March 26,2020. Philadelphia has a 3.924% wage tax on residents and a 3.495% tax on non-residents for wages earned in the city as of August 2013. Dubow said the proposed refunds would cost as much as $25 million. For example, the city of Philadelphia imposes a wage tax on all resident and non-resident individuals working in the city. Non-resident employees based on work performed outside Philadelphia – Eligible taxpayers may file a Wage Tax Refund Petition to claim a refund. The guidance was published to address the situation that many employees have been forced to work from home, many for the first time. 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