Table Of Contents
An obligation to withhold the PA Personal Income Tax is imposed on every employer maintaining an office or transacting business within the Commonwealth and making payment of compensation to a resident individual or to a nonresident individual performing services on behalf of the employer within the Commonwealth. An employer includes any individual, partnership, association, corporation, government body or agency, or other entity that employs one or more persons for compensation. Any person required under the Internal Revenue Code to withhold federal tax from compensation paid to an employee will be considered an employer.
Account ID Number:
The PA Department of Revenue has issued you an eight-digit Account Identification Number to file and pay your Employer Withholding Tax. Please reference this number whenever you pay or correspond with the Department regarding your account.
Federal Employer Identification Number:
An employer is required to provide its Federal Employer Identification Number (EIN).
Compensation Subject to Pennsylvania Withholding:
Compensation subject to PA Personal Income Tax withholding includes salaries, wages, commissions, bonuses and incentive payments, fees, tips, and similar remuneration received for services rendered. Compensation shall NOT include payments paid to persons retired from service, unemployment compensation, or payments paid to reimburse allowable business expenses if the employer requires the employee to account for the expenses and reimburses the employee in the exact amount of the expense.
All compensation paid to a resident of Pennsylvania is subject to withholding even though the services may have been performed outside the Commonwealth. However, in the event a Pennsylvania resident is employed wholly outside Pennsylvania and is subject to the withholding tax of the state or foreign country where that person is employed, the employer is not obligated to withhold PA Personal Income Tax.
The tax shall be deducted and withheld on compensation paid to nonresident employees for services performed in Pennsylvania. If a nonresident employee performs services partly within and partly outside the Commonwealth, only compensation for services performed within the Commonwealth is subject to withholding.
The Commonwealth of Pennsylvania has entered into reciprocal agreements with the states of Indiana, Maryland, New Jersey, Ohio, Virginia and West Virginia. Under the provisions of these agreements, an employer in a reciprocal state withholds the PA Personal Income Tax from compensation earned by a resident employee in that state and forwards the tax to Pennsylvania. A PA employer, upon receipt of the proper application (REV-420), will not withhold PA tax from compensation earned by a nonresident employee, but will withhold the income tax of the reciprocal state in which the nonresident employee resides and will forward the tax to that state.
An employer is not required to withhold PA tax from the compensation of an employee who files a REV-419, Non-withholding Application with the employer. To qualify for the non-withholding provision, the employee must have incurred no liability for the preceding tax year and will incur no liability for the current tax year under the revised method of computing partial or complete tax forgiveness.
The amount of tax required to be withheld is determined by multiplying PA taxable compensation by the statutory tax withholding rate. An agreement in writing may be made between the employer and the employee to have additional amounts of PA tax withheld which will increase withholding tax. An employer is not required to enter into such agreements.
Every employer will remit the PA tax withheld on a schedule based on the amount of taxes withheld during a quarter. If the total amount withheld for each quarterly period is expected to be $1,000 or more, the employer shall remit the tax withheld three banking days after the close of each semi-monthly period. The semi-monthly periods end on the 15th and on the last day of each month.
If the total amount withheld for each quarterly period is expected to be at least $300, but less than $1,000, the employer shall remit the tax monthly on or before the 15th day of the succeeding month for January to November and on or before January 31 for the month of December.
If the total amount withheld for each quarterly period is expected to be less than $300, the employer shall remit the tax on or before the last day of April, July, October, and January for the four quarters ending the last day of March, June, September, and December.
Once a filing status is established, the employer must maintain that schedule unless the amount withheld warrants a change.
An employer is permitted to request a change in filing frequency. The change will be effective only at the beginning of a filing period. To request such changes, complete Section I of Form REV-1705, Tax Account Information Change/Correction.
Remittance of Payments:
Use the electronic deposit statements provided in this site. The remittance coupon is titled PA-501, Employer Deposit Statement of Withholding Tax. The electronic deposit statement will be filled in with the employer identification data, period ending date, and payment due date. Employers must use the correct coupon for each payment period.
Quarterly filers are not required to use a PA-501 deposit coupon. Payments for tax withheld by quarterly filers will be forwarded with the reconciliation document as explained in "Quarterly Reconciliation" below.
Remittance of Tax Payments by Electronic Funds Transfer:
Payments of $10,000 or more must be remitted by Electronic Funds Transfer (EFT).
Failure to make a payment by an approved method may result in the imposition of a 3% penalty of the tax due, up to $500.
If a payment was made EFT, the PA-W3 return must still be filed with the Department.
Employers are required to file a reconciliation return for each quarter. These returns must be received on or before the last day of April, July, October, and January for the quarters ending on the last day of March, June, September, and December.
Monthly and semi-monthly type filers must submit Form PA-W3, Employer Quarterly Return of Withholding Tax.
Interest and Penalties:
If any amount of tax required to be withheld is not reported and paid in full on or before the due date, simple interest will be charged daily from the date that tax is due and payable to the date of payment. The rate of interest will be announced annually by the PA Department of Revenue. This interest rate will continue for the calendar year regardless of any subsequent changes in the federal interest rate in such calendar year.
Failure to file a quarterly return may result in the imposition of an addition to tax of 5% per month, or fraction thereof, of the amount shown on the return (minimum $5, maximum 25%). Additionally, failure to pay withheld tax to the Department on or before the due date for filing the quarterly reconciliation return will result in an addition to tax of 5% per month of the underpayment for each month or fraction thereof (maximum 50%). If any part of any underpayment of tax that is later proved to be the result of fraud, 50% of the underpayment will be added to the tax.
Any person required to collect, account for, and pay any income tax who willfully fails to collect, truthfully account for, or attempts to evade or defeat any such tax or the payment thereof shall be liable to a penalty equal to the total of tax evaded, not collected or accounted for and paid, and may be subject to criminal prosecution.
Any person who willfully fails or refuses to collect and remit tax, fails to file a return, files a fraudulent or false return, attempts to prevent full disclosure of taxable sales, presents for payment of the tax a check which is returned to the Commonwealth as un-collectable, may be subject to criminal prosecution.
A W-2, Wage and Tax Statement for each employee must be submitted to the PA Department of Revenue by January 31, following the year of compensation or thirty days from the termination of business, if the business terminated during the calendar year.
The W-2(s) must contain the following information:
- The name "Pennsylvania" printed, stamped, or typed on the form;
- Employer's name, address, and EIN;
- Employee's name, address, and Social Security Number;
- Total amount of compensation subject to PA Personal Income Tax for the entire year;
- Total amount of PA tax withheld.
In lieu of filing copies of the W-2(s) with the PA Department of Revenue, employers may submit information on magnetic media. Employers also may submit a computer-printed listing instead of copies of the W-2(s). To be acceptable, the listing must include all information printed on the W-2. Information on magnetic media submission can be obtained from: PA Department of Revenue, Dept. 280904, Harrisburg, PA 17128-0904.
W-2 forms, magnetic media, or listing(s) must be forwarded to the PA Department of Revenue with the W-2 Transmittal.
Any employer who willfully furnishes a false or fraudulent W-2 form, willfully fails to furnish a statement in the prescribed manner of time, or fails to show the information required is liable for penalty of $50 for each failure.
Information Statements - Federal Form 1099R:
The only information return employers must file is Federal Form 1099R. No other information returns are required. These forms are due February 28 of each year for the preceding year's distribution. Mail your Federal Form(s) 1099R to the PA Department of Revenue, Bureau of Individual Taxes, Forms 1099R, Harrisburg, PA 17128-0509.
By electing to file your tax return(s)/payment(s) electronically, you will no longer receive a pre-printed coupon book. To request forms, send all requests to the PA Department of Revenue, Dept. 280901, Harrisburg, PA 17128-0901, or call the Taxpayer Service and Information Center at (717) 787-1064 Service for Taxpayers with Special Hearing and Speaking Needs 1-800-447-3020 (TT only). The request must include the employers name, address, Account ID Number, and EIN.
Overpayments and Refunds:
Overpayments will be applied to the most current period after offset to any outstanding collectible liabilities and notification sent to the taxpayer. If a cash refund is desired, return the credit notice with a written refund request to the PA Department of Revenue, Dept. 280904, Harrisburg, PA 17128-0904.
If an error is discovered after a return has been filed, it can be corrected by filing an amended return (PA-W3R). This form may be obtained from any local Department district office or by calling the taxpayer FACT & Information Line: Toll-free at 1-888-PATAXES (1-888-728-2937). Within the local Harrisburg area, taxpayers call (717) 772-9739.
To file an amended return:
- File a new return, clearly marked "Amended Return".
- If the error results in an overpayment, the amended return must be filed within three years from the date the original payment was received in order to receive a credit or refund.
- If a payment was remitted with the original return, include the amount this payment in total deposits for the quarter.
- If a credit was received from the original return, deduct that amount from total deposits for the quarter.
- If the amended return results in a balance due, remit the tax due with the amended return. Late charges will be billed, if applicable.
Mail the amended return to: PA Department of Revenue, Dept. 280903, Harrisburg, PA 17128-0903.
Amended Withholding Statement:
Use Federal Form W-2C, Statement of Corrected Income Tax Amounts, to correct errors on previously filed W-2 forms. Mail Forms W-2C with an amended W-2 Transmittal to the PA Department of Revenue, Dept. 280902, Harrisburg, PA 17128-0902.
FACT & Information Line:
The Department has a toll-free line available 24 hours a day, seven days a week. The service features forms ordering by fax or mail, and a telephone bulletin board that provides answers to frequently asked questions. The telephone numbers for the FACT & Information are 1-888-PA TAXES (1-888-728-2937) nationwide or (717) 772-9739 within the local Harrisburg Area.