PA return help

[HV Ken]

Hi. Looking for some help preparing a PA return for a college student who is a dependent of our client and client is NY resident.

Student received W2 (~$9000) from university (Univ of PA). PA state taxes, and Philadelphia local taxes were withheld.

Problem #1: In the ATX W2 input, it only allows for localities of Allentown, Pittsburgh, and Springfield.

Problem #2: I don't see anywhere on the PA 40 return to account for the Philadelphia local tax that was withheld. The state tax withheld exactly equals the tax liability.

Not sure what to do with the Philadelphia local tax withheld. The local tax withheld amount is actually greater than the state tax withheld.

Thanks for any assistance!

[Kimberly K]

Hi Ken,

As for problem number one, if the local that you need is not listed on the W2 input screen(many locals are not) just type in local. Problem number 2, the Pa40 wants to know what county your client lived in and School district. That is all they want for the PA40.

When completing the local, the best place to go to find out the percentage for your client's area is http://munstatspa.dced.state.pa.us/Registers.aspx

If your client lives in the city of Philadelphia the tax is higher than the state return 3.93% ouch!

Before tax season started I made a generic local form for locals not appearing in the program. Let me know if you need more help!

[Kimberly K]

I guess I shouldnt have said that the only thing they want on the PA40 is the county, and school district, of course they want more than that. But thats all they want when it comes to anything local. There is no deduction for what is withheld from the local on the PA return.

[HV Ken]

Thanks for your reply. If I understand you correctly, there is no place on the PA 40 to report the local tax withheld ? It just gets withheld and is (assumed to be) the correct amount ??

And I thought NY was confusing!!!!!

[Catherine]

Thanks for your reply. If I understand you correctly, there is no place on the PA 40 to report the local tax withheld ? It just gets withheld and is (assumed to be) the correct amount ??

And I thought NY was confusing!!!!!

There is also the local return. I ran into a couple of these with some folks who moved to MA from PA. ATX has a generic local form, but frequently the local district has a blank or fill-in version specific to them at a local web site. They have to be mailed in anyway, so using the local version means you don't miss any tiny twists. I noticed some differences between the ATX local generic and the from-their-site local specific forms.

[HV Ken]

There is also the local return. ATX has a generic local form, but frequently the local district has a blank or fill-in version specific to them at a local web site. They have to be mailed in anyway, so using the local version means you don't miss any tiny twists. I noticed some differences between the ATX local generic and the from-their-site local specific forms.

Thanks - can you provide a pointer (either URL or merely a suggestion on where to start and send me on my own way) on where to obtain the PA local form ?

[Kimberly K]

Thanks - can you provide a pointer (either URL or merely a suggestion on where to start and send me on my own way) on where to obtain the PA local form ?

http://www.phila.gov/revenue/pdfs/Rev%20PDFs/2009%20Wage%20Refund%20Petition%20Salary.pdf

I dont know if this is the form you need or not. I do not know all the details, Individuals are taxed on where they lived in 2009. If your client lived on campus in Philadelphia and not a surrounding area, I think this is the form you might be looking for, but not sure whether the client is considered a nonresident of Philadelphia.

[Catherine]

Thanks - can you provide a pointer (either URL or merely a suggestion on where to start and send me on my own way) on where to obtain the PA local form ?

I got a form and locality name from the prior-year return and then did a Google search. Each locality seems to have their own form version, so the place I got mine (if I could find it; this was a couple years ago) won't do you much good.

Good luck! Tracking down the bleeping form was the worst part for me.

[elfling]

http://www.phila.gov...on%20Salary.pdf

I dont know if this is the form you need or not. I do not know all the details, Individuals are taxed on where they lived in 2009. If your client lived on campus in Philadelphia and not a surrounding area, I think this is the form you might be looking for, but not sure whether the client is considered a nonresident of Philadelphia.

This form is only useful if the student is both a nonresident and not working within Philadelphia city limits with Phila tax withheld. Working within the city means tax is withheld and no refund is allowed, period. Persons who live in PA but outside Phila city limits may or may not be subject to a local earned income tax. Those who are typically receive a credit of Phila tax paid up to the amount owed to the resident locality. The remainder is not refundable.

Is this student actually a resident of NY who is temporarily absent from the state for education purposes? If so, is it possible NY will owe her a refund or credit on taxes paid to Phila and/or PA?

[HV Ken]

This form is only useful if the student is both a nonresident and not working within Philadelphia city limits with Phila tax withheld. Working within the city means tax is withheld and no refund is allowed, period. Persons who live in PA but outside Phila city limits may or may not be subject to a local earned income tax. Those who are typically receive a credit of Phila tax paid up to the amount owed to the resident locality. The remainder is not refundable.

Is this student actually a resident of NY who is temporarily absent from the state for education purposes? If so, is it possible NY will owe her a refund or credit on taxes paid to Phila and/or PA?

Thanks for the reply. I understand the NY credit part....

If I am understanding correctly, there is no place on the PA 40 to report the local tax withheld ? It just gets withheld and is (assumed to be) the correct amount ??

[elfling]

Thanks for the reply. I understand the NY credit part....

If I am understanding correctly, there is no place on the PA 40 to report the local tax withheld ? It just gets withheld and is (assumed to be) the correct amount ??

Right.

There have been several proposals for local taxes to process through the state returns. Our state Congress just can't seem to ever get it out of committee, or off the House floor, or past the lobbyists, yadda-yadda. And every time it comes up another Act of one kind or another ends up making the local EIT systems more quirky. For those of us running hundred of returns in PA, we no sooner get accustomed to one methodology and it changes. Uniformity doesn't even exist within each school district or county.

We just found out last week that Keystone Collections has taken over for Whitehall-Coplay school district and raised the rate to 1.3%. But the rate is still 1.09% for North Whitehall Township which is within that district. And since South Whitehall Twp falls within the Parkland school district, that rate is only 1%. There are 6 geographic divisions within the Northampton school district. Only two have the same rate. Northern Lehigh has on township that refuses to get on board with Central Tax Bureau. Separate forms, separate collector. I could go on for an hour without touching outside the Greater Lehigh Valley, let alone the rest of the state!

[Lion EA]

Are there still large agencies like Berkheimer or White something that collect for lots of areas? Where my kids live out in the boonies, they go down the road to Mary Wenk who's open to collect taxes on Tuesdays from 11 a.m. to 4 p.m., but don't go between 2 and 3 p.m. when the school buses bring her children home -- it says that right on the tax forms! She even gives discounts for early payments. PA has a very bizarre system. :spaz:

[Crank]

For Pennsylvania local Earned Income Tax (EIT) returns many accept the generic form included in ATX "PA-FREIT Final Return For Earned Income Tax". Just make sure to input the local tax rate, many are 1% and get the mailing address from the local taxing authority

[mlinder42]

Are there still large agencies like Berkheimer or White something that collect for lots of areas? Where my kids live out in the boonies, they go down the road to Mary Wenk who's open to collect taxes on Tuesdays from 11 a.m. to 4 p.m., but don't go between 2 and 3 p.m. when the school buses bring her children home -- it says that right on the tax forms! She even gives discounts for early payments. PA has a very bizarre system.

[mlinder42]

PHILADELPHIA tax is a wage tax there is no return and no refund.If you work in Philly you pay it.

[HV Ken]

Thanks to everyone for helping me understand the Philadelphia local wages.

[Crank]

Many local taxing authorities allow you to take a credit against local taxes for taxes paid to philadelphia. Check with your local taxing authority.

[elfling]

Are there still large agencies like Berkheimer or White something that collect for lots of areas? Where my kids live out in the boonies, they go down the road to Mary Wenk who's open to collect taxes on Tuesdays from 11 a.m. to 4 p.m., but don't go between 2 and 3 p.m. when the school buses bring her children home -- it says that right on the tax forms! She even gives discounts for early payments. PA has a very bizarre system.

Yes, there are still a few bigger collection groups for EIT ~ Central Tax Bureau, Berkheimer, Keystone. There are a few counties that collect for all within their district. We deal with Berks and Lancaster regularly.

Mary Wenk is one of the many-many-many tax collectors for real estate, per capita, and occup taxes. Just about every one of those folks have hours that include personal caveats. Close to me there is one who delivers meals on wheels to the elderly so he's not in office from 11:00-12:30. Another is available at the Borough Hall on the 2nd & 4th Thursdays so people who don't drive can walk in. And then there's one in the next village over who collects both EIT and RE taxes. We still can't figure how holiding both an elected offices and a full-time job in the same office isn't a conflict of interest. But, oh well.

You're right. Our state system is bizarre. Born and raised here in PA. Never left the state aside from vactions. I greet newcomers with a "Welcome to the land of potholes and taxes." We have plenty of both!

[Lion EA]

My hubby's from PA, Harrisburg actually, and schooled at Carnegie Mellon. But, son lives in the tiny town of Lakewood and works at The Inn at Starlight Lake in Starlight (the bear has emerged from hibernation, so it must be springtime!) and bought land in Hancock, NY. He also bought a used Ford F-150 truck and votes Democratic. I told him if he puts a rifle rack on his truck, he's outta my will. :read: