If you live in Philadelphia and work outside Pennsylvania, you might be eligible for a break on your wage tax bill. Philadelphia updates Wage Tax guidance for employees ordered to work from home outside of the city for the employer's convenience On May 4, 2020, the Philadelphia Department of Revenue updated its guidance for withholding the Wage Tax from nonresident employees who are working in the city temporarily due to COVID-19; the previous guidance was published on March 26,2020. GTIL and each member firm of GTIL is a separate legal entity. I received Form 1099-G for each refund in January 2016 and applied them to my 2015 tax return in the Turbotax section for State and Local Tax refunds as additional income. (Philadelphia, Harrisburg: sales, for rent) User Name: Remember Me: Password Please register to participate in our discussions with 2 million other members - it's free and quick! Address vulnerabilities with predictive modeling to identify causes and action steps. Non-residents who work in Philadelphia must also pay the Wage Tax. The Philadelphia wage tax applies to non-resident employees who work in Philadelphia. When policy shifts, our insights and analysis can help you plan and respond. This deduction is claimed on your personal income tax return. For example, the city of Philadelphia imposes a wage tax on all resident and non-resident individuals working in the city. Deductions reduce the amount of income you pay tax on, so they reduce your overall income tax liability. Philadelphia City Income Taxes to Know. Company must have at least 0 and no more than 256 characters. This method simplifies your claim for home office expenses (work-space-in-the-home expenses and office supply and phone … For suburbanites who work in the City of Philadelphia, there is an unexpected twist from Governor Wolf’s stay at home order – in the form of a tax refund. How much you can claim. 1787). First Name must have at least 0 and no more than 256 characters. Employees with larger claims for home office expenses can still choose to use the existing detailed method to calculate their home-office expenses deduction. According to Ragan, those employees could apply to the city for a refund of those taxes, as long as their employer approves. The City Wage Tax is a tax on salaries, wages, commissions, and other compensation. To seek a refund from the City of Philadelphia, file an annual Wage Tax Refund Petition. The value of the First Name field is not valid. © 2021 Grant Thornton LLP - “Grant Thornton” refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Operational and organizational transformation, The State of the Not-for-Profit Sector in 2020, State tax impact for telecommuting employees, https://www.phila.gov/media/20200326113032/2020-Wage-Tax-guidance-coronavirus-032620.pdf, https://www.phila.gov/2020-03-22-the-new-business-activity-and-stay-at-home-order-what-you-need-to-know/, https://www.state.nj.us/treasury/taxation/, https://taxfoundation.org/working-from-home-remote-work-tax-obligations/. Status quo headlines that don’t protect your business. The value of the Company field is not valid. If you live in Philadelphia and work outside Pennsylvania, you might be eligible for a break on your wage tax bill. A completed Schedule SP must be attached to the Philadelphia Income-Based Wage Tax Refund Petition (not to be confused with the other Philadelphia wage tax refund petitions that also exist) along with copies of all the taxpayer’s Forms W-2. If you're typing here you're not human must have at least 0 and no more than 0 characters. GTIL refers to Grant Thornton International Ltd (GTIL). Only non-resident employees are eligible for a refund based on work performed outside of Philadelphia. Have your say on this topic! Philadelphia: The city’s Department of Revenue issued revised wage tax policy guidance [PDF 134 KB] for non-resident employees and reiterated that non-resident employees who work for Philadelphia-based employers are not subject to wage tax during the time they are required to work outside of Philadelphia, including working from home. The temporary flat-rate method will allow eligible employees to claim a deduction of $2 for each day they worked at home due to COVID-19, up to a maximum of $400. Tech InsightsJanuary 26, 2021Click for details, Chronic Disease at WorkFebruary 23-24, 2021Click for details, Copyright © 2021 Transcontinental Media G.P. Learn how you can automate lease completeness and payment reconciliations with Grant Thornton’s LeaseCom Analytics tool. After the first 20 days, municipal income tax must be withheld and paid to the employee’s nonprincipal place of work municipality. Last Name must have at least 0 and no more than 256 characters. The tax rate, currently 3.8809 percent for Philadelphia residents and 3.4567 percent for nonresidents who work in the city, gets reduced a little bit every year. If you also have an additional summer salary from the University, then you may claim a refund for the entire year. The CRA allows you to deduct certain home expenses for your employment as long as you meet one of the following conditions: The work space is where you mainly do your work (more than 50 percent of the time), or you use the work space only to earn your employment income. Temporary flat rate method; Detailed method; Temporary flat rate method . This deduction is claimed on your personal income tax return. The tax applies to payments that a person receives from an employer in return for work or services. On this page. **Answers are correct to the best of my ability but do not constitute tax or legal advice. The authorizing As initial pandemic reactions begin to subside, our manufacturing supply chain survey asked: What are your risks, investments and opportunities? COVID-19 has caused PE firms to adjust their valuation practices – postponing valuations to avoid reset triggers, exploring new approaches to valuations or diversifying existing ones. As a leveraged Philadelphia Wage Tax Work From Home product losses are able to exceed initial deposits and capital is at risk. Or out of a financial Safety Zone without even realizing it all resident non-resident., wages, commissions, and other compensation mind, one can see how work-from-home... Applies to payments that a person receives from an employer in return for work or services, said former governor! 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