Employers who have offices in PA, or individuals that work from their home offices in PA, are being given a new set of requirements to fulfill as of January 1, 2012. Starting in January, employers will be required to identify and withhold the higher of the two earned income tax (EIT) rates, based on where the employee resides versus where they are employed.
The requirements for employers include:
1) Register their business with the appropriate tax collection district.
2) Distribute, collect and retain a signed Residency Certification Form for each current employee and all new hires.
3) Send the appropriate withheld tax for all employees to the correct tax collection district.
4) At the end of each calendar year, complete an Annual Withholding Reconciliation Form and submit it to the appropriate tax collection district.
Additionally, since each municipality may have a different local withholding rate, employers will need to identify the correct rate for each municipality to be sure every PA employee is taxed correctly. Failure to comply with the new requirements or incorrect tax submissions will be subject to fines.
In response to these new demands, CIC Plus has developed a streamlined PA Act 32 solution which enables employers to stay compliant and reduces workload without a big strain on internal HR and/or payroll resources. CIC Plus' system identifies the required information on the Residency Certification Form, including: Municipality, County, PSD (political subdivision)
Employers are invited to call or email CIC Plus to find out if the PA 32 Solution is a good fit for their company. CIC Plus also offers other employee self service solutions including online pay stubs, online W-2s, online W-4s and custom e-forms for their clients.
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CIC Plus is an employee self-service solution provider that delivers customizable services catering to a wide range of industries.