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September 15, 2011

Employers to collect

local wage taxes Jan. 1

Pitt’s payroll department is gearing up to begin withholding local wage taxes from the paychecks of most employees.

The change comes as the result of a state law that will require the University to withhold the taxes for employees who live in Pennsylvania. Currently, employers withhold local taxes for employees who live and work in the same municipality but other workers typically must file their own local wage tax forms quarterly.

Under Act 32 of 2008, effective Jan. 1 employers will be required to withhold wage taxes that go to local municipalities and school districts for employees who reside in Pennsylvania. Employers initially will need to collect a certificate of residency from all employees stating the county and municipality in which they live. Workers will need to file certificates of residency when they are hired or when they have a name or address change.

The changes aim to simplify tax collections statewide. While they will save many workers from the effort of filing their own local tax forms and ultimately streamline collections for employers, payroll offices are busy adjusting their systems in time for the deadline.

Pitt Payroll director Daniel Jeffreys said logistics still are being worked out, but employees University-wide should be receiving a mailing in early- to mid-October to verify their addresses.

Currently Pitt withholds the taxes for about 10,500 employees. Next year, that number is expected to rise to about 18,500, he said.

Act 32 also consolidated local wage tax collections by requiring taxing jurisdictions within a defined geographic area to select a wage tax collector for their area. The legislation provides for a single tax collector per county, although Allegheny County is divided into four collection districts, according to the Pennsylvania Department of Community and Economic Development.

More information on the legislation can be found at

—Kimberly K. Barlow

Filed under: Feature,Volume 44 Issue 2

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