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Local Income Tax - Understanding ACT 32

All employees, including international and out of state residents (students), must complete a Certificate of Residency Form to ensure their Earned Income Tax is withheld and remitted properly. This form is required to be completed in order to be paid. We have created an electronic version to make this process as quick and convenient as possible https://secureweb.juniata.edu/hr/LEITRC/.

BACKGROUND: Pennsylvania Local Tax Reform, ACT 32, completely restructures the withholding, reporting and collection of Local Earned Income Taxes (EIT) in Pennsylvania and is to be implemented through employers by January 1, 2012. All employers will be required to withhold Pennsylvania local income tax for all employees working in Pennsylvania. Huntingdon Borough, where Juniata College is located, has a non-resident tax rate of 1%. Therefore local tax will be withheld for international or out of state residents also. All residents of Pennsylvania will have the appropriate local tax withheld according to the local tax rate of where they live.

What does this mean for employees? The new law (effective 1/1/12), requires Juniata to withhold the tax as you work (like other taxes), so that you do not pay the tax later. Generally speaking, as of January 1, 2012, employee taxpayers who currently file quarterly local EIT returns will no longer be required to do so because, under Act 32, their employers must now do so on their behalf. Employee taxpayers will still be required to file annual final returns. If, for any reason, an employer fails to withhold taxes on behalf of any employee, that employee must still file and pay his or her local EIT quarterly. Employees should not stop making quarterly EIT payments until they confirm that their employer is withholding the proper amount of EIT. Also, self-employed individuals must file quarterly returns, make quarterly payments, and file an annual final return.

For more information about Act 32, you may visit www.NewPa.com<http://www.NewPa.com>.

If you have any questions or have problems completing the online form please contact the Payroll Office at PayrollOffice@juniata.edu, Linda Taylor x6649 or Melinda Bowser x3303.