Act 32 Employer, Are You Ready?

Act 32Employer, Are You Ready?

Kathy Johnson, PRSBAPennridge School District

March 16, 2011

Beyond the TCCBy-laws completedAuditor’s namedSolicitor namedCollector namedReorganization completedBudget passed for 2011Waiting…Act-32-Countywide-Tax-Collection-Timetable.pdf

Next StepsDistrict as an employer

What do we need to do to get readyEmployee Communication

District as part of the tax collection districtCommunicate with your employers

Act 32 OverviewCounty-wide collection system effective January

2, 2012Some counties have chosen to implement the

county-wide collection system prior to 2012Employers required to register with collectorEmployers required to have employees complete

DCED residence formEmployers required to deduct the greater of the

rate where the employee lives or the “non-resident” rate associated with the place of employment.

Employer RegistrationEmployers within the Tax Collection District

are required to register with the collectorMore than one employeeWages or compensation paidHousehold help excluded

Employer CommunicationsWork with your EIT collector to identify

employers within your TCDSend notification of changes by mailWork 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

Employee Residence FormEvery employee required to complete

School District employees as wellOut of State employees

Withhold at non-resident rate if applicableForm 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.pdfpsd_codes_-_12-15-10.xls

Employee CommunicationPre-fill Employer Section of the formPrepare a brief explanation of the changes

Non-resident taxWhy 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

What Rate to WithholdFor 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.comSelect Get Local Gov Support, >Municipal Statistics

Municipal Tax Rate Summary.pdfpsd_codes_-_12-15-10.xls

When to RemitNo later than 30 days after the end of each

calendar quarterMonthly – under certain circumstances

Requires electronic filingAnnually Form ER-1

How to RemitBeginning 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.

Combined PaymentsOne CollectorIf 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.

Payroll SystemsEmployers 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

Communication PlanIdentify your audience

EmployersEmployees

Determine your messageImportant factsTimelineFAQ’sContact Information

Communication PlanContinuedPartner with municipalities

Build relationshipsContact your tax collectorDeliver your message

School District websiteTax collector websiteMunicipalities website

SummaryA well planned and executed communication

plan may enhance EIT revenueAct 32 for all counties in effect January 1,

2012Are you ready?