Pennsylvania Income Tax Withholding Requirements

Filed under Payroll Taxes. Fact checked on February 8, 2013.

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Employers in Pennsylvania must conform with these state rules relating to income tax withholding and administration.

General Withholding Requirement: Pennsylvania income tax generally must be withheld from wages paid to resident employees for services performed either within or without the state and from wages paid to nonresident employees for services performed in the state. However, when resident employees perform all their services in another state, their wages are not subject to Pennsylvania withholding if the other state imposes a withholding tax on their wages.

Employee Withholding Exemption Forms: Pennsylvania does not have a state withholding exemption certificate. A flat 3.07 percent rate is applied to determine the appropriate level of state income tax to withhold from earnings. Of course, Federal Form W-4 must be completed by each employee to determine the appropriate level of federal income tax to withhold from earnings.

Reciprocal Agreements: Pennsylvania has reciprocal agreements in effect with Indiana, Maryland, New Jersey, Ohio, Virginia, and West Virginia.

Administration:

Pennsylvania Department of Revenue
Employer Withholding Tax
Bureau of Business Trust Fund Taxes (Inquiries)
P.O. Box 280904
Harrisburg, PA 17128-0904br /> Telephone: 717-787-1064

Local Tax Jurisdictions: Numerous cities and boroughs impose local income taxes that must be withheld from employees' wages.

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