Interim Reporting Changes

2011 EMPLOYER RATE CHANGE FOR FUTA TAXES
Effective July 1, 2011, the federal unemployment tax rate has dropped to .6%, from the original .8%, for all employers who pay their state unemployment taxes in full on a timely basis.  The tax applies to the first $7,000 of wages paid to each employee.  If you have any questions, please contact us for more information.
2012  EMPLOYER WITHHOLDING CHANGES FOR LOCAL EARNED INCOME TAX:
Effective January 1, 2012 every employer in Pennsylvania will be required to withhold local earned income tax from all employees, not just the employees residing in the municipality in which the employer is located.  In order to prepare for the change, employers are encouraged to have each employee complete a Residency Certification Form now.  The form is available on the web at www.newPA.com under Get Local Gov Support, then Tax Information, then DCED’s Act 32 EIT Collection System.  [ http://www.newpa.com/get-local-gov-support/tax-information/dceds-act-32-eit-collection-system]  In order to complete the form, the employee must provide the municipality and county where he/she resides and the municipality and county where he/she is employed.  The employee must also provide the PSD Code and resident earned income tax rate for his/her place of residence and the PSD Code and non-resident earned income tax rate for his/her place of employment.  The PSD Codes and tax rates are available online at www.newPA.com under Get Local Gov Support, then Municipal Statistics.  [ http://www.newpa.com/get-local-gov-support/municipal-statistics ] The top section of the Municipal Statistics page has a link [Political Subdivision (PSD) Codes List] to a list of all of the codes.  The second section on the page has a link [EIT/PIT/LST Tax Registers] to a listing of the resident and non-resident tax rates for each locality in Pennsylvania.  If the employee completes this form, the employee will be responsible for the accuracy of the information reported; however if the employer completes this form, the employer will be responsible for its accuracy.  Therefore, we recommend employers provide employees with the listings necessary for completion of the forms, but that the employees to be required to complete the form, sign it, and return it to the employer.  This change in reporting will no doubt cause some degree of confusion, so we recommend having employees complete the forms prior to year-end and we would encourage employers to contact us with any questions that result.

Please note that this list is not inclusive of all federal and Pennsylvania taxes to which any business may be subject, but only represents information about changes made during the year to those certain selected tax rates and filing procedures that are listed.  Readers are referred to their professional tax preparer for more information on these matters or to determine other taxes to which a particular business may be subject.

Do you need a professional tax consultant for your business? Our firm has provided tax preparation and consulting services to businesses in western Pennsylvania since 1942.  We specialize in small businesses and nonprofit organizations and provide services at all levels from bookkeeping and payroll to audits under GAAP or GAGAS guidelines to preparation of reviewed and compiled financial statements according to SSARS to annual income tax preparation.

Please feel free to refer to the Contact information listed on this blog to speak to a firm representative of Roy & Associates, PC.  We welcome new business.

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Roy & Associates, PC serves clients in western Pennsylvania located predominantly in Westmoreland County, Allegheny County, and Fayette County.

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