TAXPAYER ANNUAL
LOCALEARNEDINCOME TAXRETURN
A.GeneralInstructions
INSTRUCTIONS
1. WHENTOFILE: IfyoufileaFederalorStateApplicationforExtension,checktheextensionboxonlineoronthe frontoftheformandsubmitalongwithyourestimatedpayment.Ifyouuseaprofessionaltaxpreparer,confirmthatthetaxpreparer timelysubmitsyourfinalreturn.
2. WHERETOFILE:Remit to e-Collect+, LLC at 804 Fayette Street, Conshohocken, PA 19428
3. EFFECTIVEDATES:January1throughDecember31,unlessotherwisenotedonyourlocalearnedincometaxreturn.
4. AMENDED RETURN: IftaxpayeramendstheFederalincometaxreturn,taxpayermustaccordingly amendandre-filethelocal earnedincometaxreturn.
5. RECEIPT/COPY:Yourcancelledcheckoronlineconfirmationissufficientproofofpayment.
6. PENALTY, INTEREST & COST OF COLLECTION: Ifforanyreasonthetaxisnotpaidwhendue,penaltyandinterestwillbecharged. Lateorincorrect filing/paymentmayresultinadditionalcostsofcollection. A copy of cost of collection fee schedule is available upon request.
7. ROUNDOFFCENTStothenearestwholedollar.Donotincludeamountsunder50cents.Increaseamountsfrom50to99centsto thenextdollaramount.
8. USEBLACKORBLUEINKONLYwhencompletingform.
9. Resident PSD Code - The DepartmentofCommunityandEconomicDevelopment(DCED)providesawebpagefortaxpayerstolocatetheirPSDcodesandother taxrateinformationat
B.Regulations/LinebyLineInstructions
LINE1:GROSSEARNINGSFORSERVICESRENDERED
Documentation Required: EncloseFormsW-2,1099andanyotherformindicatingcompensationreceived(submiteachW-2 and1099onaseparatesheet).
TAXABLE INCOME INCLUDES: Salaries, Wages, Commissions, Bonuses, Tips, Stipends, Fees, Incentive Payments, EmployeeContributionstoRetirementAccounts,Compensation DrawingAccounts.Ifamountsreceivedasadrawingaccount exceed thesalaryorcommission, thetaxispayable ontheamount received. Iftheemployee subsequentlyrepaystothe employeranyamountnotinfactearned,adjustthetaxaccordingly.Benefitsaccruingfromemployment,suchas:annualleave, vacation,holiday,separation,sabbaticalleaveandcompensationreceivedintheformofpropertyshallbetaxedatitsfairmarket valueatthetimeofreceipt. Jurydutypay,payments received fromweekend meetings (unittrainingassembly) forNational GuardorReserveUnits,sickpay(ifemployeereceivedaregularsalaryduringperiodofsicknessordisabilitybyvirtueofhis agreementofemployment),andtaxesassumedbytheemployer.Taxpayershouldreferto thePA DepartmentofRevenue regulationsregardingtaxablecompensation. Thislistisnotexhaustive;contactyourprofessionaltaxpreparerorlocalearned incometaxcollectorifyouhaveanyquestions.
NON-TAXABLE INCOMEINCLUDES: SocialSecurityBenefits,Unemployment Compensation, pensions,PublicAssistance, deathbenefits,gifts,interest,dividends,boardingandlodgingto employeesfor convenienceofemployer,lotterywinnings, SupplementaryUnemployment Benefits(subpay),capitalgains(capitallossesmaynotbeusedasadeductionagainstother taxableincome.),disabilitybenefits(periodicalpaymentsreceivedbyanindividualunderadisabilityinsurance plan),active militaryserviceoutsideofPAincludingannualtraining,personaluseof companycars,cafeteriaplans,andclergyhousing allowance.Someformsofpaymentsfromindividualretirementprograms,suchasKeogh,TaxShelterAnnuity,IRA,and401K arenottaxable.TaxpayershouldrefertothePADepartmentofRevenueregulationsregardingtaxablecompensation.Thislist isnotexhaustive;contactyourprofessionaltaxpreparerorlocalearnedincometaxcollectorifyouhaveanyquestions.
LINE2:ALLOWABLEUNREIMBURSEDEMPLOYEEBUSINESSEXPENSES
DocumentationRequired:PennsylvaniaformPA-UEmustbeenclosed(legiblephotocopiesareaccepted).
LINE3:OTHER TAXABLE EARNEDINCOME:Include income from work or services performed, which has not been included on line 1 or line 5. Do not include interest, dividends or capital gains.
LINE4:TOTALTAXABLEEARNEDINCOME:Subtractline2fromline1andaddline3.
LINES5and6:NETPROFITS/NETLOSSESFROMBUSINESS:Useline5forprofitandline6forloss.
Documentationrequired:1099(s),PAschedulesC,E,F,orK-1mustbeenclosed(legiblephotocopiesareaccepted).
Rule:AtaxpayermayNOToffsetabusinesslossagainstwagesandothercompensation(W-2earnings--line1)."Pass- through"incomefromanS-Corporation isNOTtaxableandlossisnotdeductible.Ataxpayermayoffsetalossfromone businessentityagainstanetprofitfromanotherbusinessentity.
LINE7:TOTALTAXABLENETPROFIT:Subtractline6fromline5;iflessthanzero,enterzero.
LINE8:TOTALTAXABLEEARNEDINCOMEANDNETPROFIT:Addlines4and7.
LINE9:TAXLIABILITY:Multiplyline8by1%.
LINE10:EARNEDINCOMETAXWITHHELD:YoumayclaimcreditforlocaltaxwithheldasshownonyourW-2form,butonlyuptothe amountofyourlocaltaxliabilityasshownonLine9ofthisreturn.Donotclaimentireamountoftaxwithheldifitisgreater thanthetaxliabilityforyourresidenttaxingjurisdiction,unlessitalsoexceedsthenon-residenttaxliabilitywhereyouwork(by lawyouremployermustwithholdthehighestratebetweenthePAjurisdictionwhereyouresideandthePAjurisdictionwhere youwork).
LINE11:QUARTERLY ESTIMATEDPAYMENTS/CREDITS FROMPREVIOUSTAXYEAR:Listanyquarterlyestimatedpayments madetodateforappropriatefilingyear.Donotincludeanypenaltyandinterestamountsthatmayhavebeenmadewiththe quarterlypayments.Also,includetaxcreditfromtheprevioustaxyear.
LINE12:MISCELLANEOUS CREDITS
GeneralRulesApplicabletoLine12Credits:
(1) CreditsforincometaxespaidtootherstatesmustfirstbeusedagainstyourPennsylvaniastateincometaxliability;any creditremainingthereaftermaybeusedagainstyourlocalearnedincometaxliability.
(2) CreditsforincometaxespaidforwagetaxespaidtoPhiladelphiamaybetakendirectlyagainstyourlocalearnedincome taxliabilityforthosewagesactuallyearnedinPhiladelphia.
(3) Incalculatingyourcreditforincometaxespaidtoanotherstateortoapoliticalsubdivision,notethatthesameitemsof incomemustbesubjecttobothyourlocalearnedincometaxandtheout-ofstatetax.
(4) Nocreditforincometaxespaidtoanotherstateorpoliticalsubdivisionmayexceedyourtotallocalearned incometaxliability (including Philadelphia).
CreditforTaxesPaidtoOtherStates:Youmaytakeacreditbaseduponthegrossearningstaxedbothinanotherstateand inPennsylvaniathatisinexcessofPennsylvaniastatepersonalincometaxrate.THISCREDITWILLBEDISALLOWEDIFTHE NON-RESIDENTORFOREIGNUSSTATERETURNANDYOURW-2FORMSHOWINGSTATEINCOMETAXWITHHELDIS NOTPROVIDED.
Nocredits aregiven forstate incometaxespaidtostates thatreciprocate withPennsylvania. These statesare: Maryland,NewJersey,Ohio,Virginia,WestVirginiaandIndiana.
CreditforTaxesPaidtoPoliticalSubdivisions OutsideofPA:Youmaytakeacreditbaseduponthegrossearnings taxed in both another political subdivision and where you live in PA. THIS CREDITWILLBEDISALLOWEDIFTHEFOREIGNCITYRETURNANDORYOURW-2FORMSHOWINGCITYINCOMETAX WITHHELDISNOTPROVIDED.
CreditforTaxestoPhiladelphia: YoumayuseanywagetaxpaidtoPhiladelphia asacredittowardyourlocalearned incometaxliabilityonthesamewagestaxedbyPhiladelphia. Youmustcomplete theLocalEarned IncomeTaxReturn. ENCLOSEA COPYOFYOURW-2AND/ORVERIFICATIONOFTAXESPAIDWITHTHEFORMORCREDITWILLBE DISALLOWED. NorefundsorcreditswillbeallowedforanyoverpaymentmadetoPhiladelphia.Multiplywagesearnedand taxedinPhiladelphiabyyourlocaltaxrateandentertheamountonline12ofthetaxreturn. Yourcreditcannotexceedyour localtaxliability.
LINE13:TOTALPAYMENTSANDCREDITS:Enterthesumoflines10,11and12.
LINE14:REFUND: Iftax(line9)islessthanyourcredits(line13),enteramountofrefund.Ifyouhaveanoverpayment oftaxesin excessof$1.00,youmayelecttoreceivearefund,orreceiveacreditagainstthenextyear'staxliability.A1099willbe issuedtotheFederalGovernmentforanycreditorrefundinexcessof$10.00.
LINE15:CREDIT:Iftax(line9)islessthanyourcredits(line13)enteramountofcreditandchecktheapplicableboxforcreditto spouseorcredittonextyear.A1099willbeissuedtotheFederalGovernmentforanycreditorrefundinexcessof$10.00.
LINE16:AMOUNTOFTAXDUE:Iftax(line9)islargerthanyourcredits(line13),enteramountoftaxdue,iflessthan$1.00, ENTERZERO.
LINE17:INTERESTANDPENALTIES:Ifforanyreasonthetaxisnotpaidwhendue,interestandpenaltyoftheunpaidtaxfor eachmonthshallbeaddedandcollectedat the rate of one percent (1%) per month of the unpaid principal balance from the due date until payment is made. Returnsreceivedaftertheduedatemaybechargedadditionalcostsofcollection.
LINE18: Late Fee: (10% of Line 16 plus Line 17) plus an additional $45.
LINE19: TOTAL AMOUNT: Sum of lines 17 and 18.
Note:Allaccountsaresubjecttoauditandreview.LocalorcitycopyofW-2and/orsupportingschedulesmustbeenclosed withtaxreturn.
(SubmiteachW-2and1099ona separatesheet.)