PENNSYLVANIA ACT 32#

Calculation and deduction of EIT (Earned Income Tax) and related PSD (Political Sub Division) codes#

Act 32 For Employees/Self-Employed
Employers who maintain worksites in PA or employ individuals who may work from their homes are required to withhold applicable earned income tax from those employees.
Under Act 32, employers are required to withhold the higher of the employee's resident earned income tax amount (rate of total resident EIT where they reside) vs. the employee's municipal non-resident earned income tax amount (rate of total non-resident EIT where they are employed).

Personality Setup#

• A copy of IDSD should be made using IMFN; code this new screen as IDSD_XXX(client code).
• Add the column SCHOOL_DISTRICT_TYPE which contains the Lexicon X_SCHOOL_DISTRICT_TYPE.
• Re-label the field Alt School District to read Tax District Code.
• UPUTR – Run with the Report Parameter Load Tax District Type set to PA PSD Code. The only other field required is a date. This process will populate IDSD_XXX with all PSD codes and trigger the lexicon to show PA PSD Code for these records. All other records with show as School District.
• Insure the following PC usages have been set up in IPPC
  • 6903 - City Work Deduction - School Reg Tax (Work EIT)
  • 6907 - City Work Earnings - School Reg Earnings
  • 6923 - City Res. Deduction - School Reg Tax (Res EIT)
  • 6927 - City Res. Earnings - School Reg Earnings
• Jurisdictions in IDTX must have the fields for County, City, Municipality and School District completed. (It is not essential to have the School District field defined with data in IEPI as Symmetry goes to IDTX to determine how to apply taxes).