Upload Budlite Receipt for Refund in Philly

Among the many issues created by the pandemic, local income tax withholding in Pennsylvania caused administrative headaches for Pennsylvania employers over the last several months (as explained in our previous blog). In today'southward blog, nosotros will talk over the Philadelphia Wage Revenue enhancement Refund process for 2020.

Who is Subject to Wage Tax?

Employees who are non-residents of Philadelphia and piece of work for employers in the city are field of study to the Philadelphia Wage Tax at a charge per unit of 3.5019%. If your employer REQUIRES you to piece of work exterior of the city on any day, y'all are non subject to the wage tax for that mean solar day. For example, if your job requires you lot to visit various customers outside of the city, y'all would not have to pay the wage revenue enhancement on any day you are exterior of Philadelphia visiting those customers. If you work outside of the metropolis for your own convenience, even so, you are still subject to the wage tax.

Philadelphia residents are subject to the wage tax at a rate of 3.8712% no matter where they work.

During the pandemic, the City of Philadelphia did non change its position regarding the wage tax: whatsoever not-resident employee who is REQUIRED to work remotely, outside of the urban center, considering of the pandemic is not field of study to the wage revenue enhancement during that period.

Who is Eligible for a Refund?

Any non-resident employee with Philadelphia Wage Revenue enhancement withheld during a flow where they were required to work somewhere outside of the city is eligible for a refund. Thus, if your employer required remote working during the pandemic, y'all are not subject to the wage taxation during that period.

There are other non-COVID-related reasons as well that would make you eligible for a refund:

• You received not-taxable stock options on which wage tax was paid.
• You have unreimbursed employee business expenses that tin reduce your Philadelphia wages. Deductible expenses are those that are not reimbursed by your employer and are ordinary, necessary, and reasonable. Of import in 2020 and 2021 - home office expenses may be allowable unreimbursed employee business organisation expenses – read more than here.

What is the Process for Requesting a Wage Revenue enhancement Refund?

Prior to 2020, to asking a refund of wage taxes paid, employees had to file and submit a Wage Taxation Refund Petition to the urban center. This form could not exist filed electronically. Because the City of Philadelphia is expecting an extreme increase in the number of refund petitions for 2020, they take attempted to make the procedure easier.

For 2020 only, employers can at present submit a bulk refund petition request on behalf of their employees. The metropolis has provided an Excel template on its website that tin be filled out by employers and uploaded electronically. All refunds will still be mailed direct to employees.

If an employer is not submitting the petition on behalf of its employees, the employees can all the same file the petition themselves. In that location is a simplified form (the COVID-EZ Refund Petition) to exist filled out for 2020 by non-resident employees requesting refund petitions due to COVID simply. While this class can still be filed via paper, the metropolis is now accepting the forms electronically. This should expedite the receipt of refunds. You lot will need to include a copy of your Class W-2 showing the taxes paid to Philadelphia and a signed letter from your employer indicating the dates you were required to piece of work outside of the metropolis in 2020.

Note that if y'all are requesting a refund for whatever reason other than COVID-related fourth dimension outside of the city, you will need to file the normal Wage Tax Refund Petition, which cannot be filed electronically.

All forms and instructions can be found on the City's website.

What Should Yous Exercise as an Employee?

Below are the steps nosotros suggest you take if you lot are a not-resident of Philadelphia and you were required to work remotely, exterior of the city, during 2020 considering of the pandemic:

1. Find out during what flow your employer withheld Philadelphia Wage Tax in 2020. Yous can make up one's mind this from looking at your Westward-ii and applying a bit of algebra, reviewing your paystubs or asking your payroll/HR section.
2. Ask your employer if they are submitting the Wage Tax Refund Petition on your behalf. If they are, no further action is required.

3. If your employer is not submitting a petition for you lot, request a signed alphabetic character, on visitor letterhead, indicating the dates you lot were required to work remotely in 2020 due to the pandemic. Your refund request will exist denied if this letter of the alphabet is non provided.

4. Either file the refund petition online, fill out and file the paper form, or requite all the necessary information to your tax accountant. Make sure all required attachments (alphabetic character from your employer and copy of all applicable W2s) are included with your filing.

The pandemic has disrupted nigh aspects of our lives. While many employers quickly adapted to the remote workforce, we expect that most employers did not adjust their employees' withholding on the first day teleworking was required. Thus, many non-residents of Philadelphia will be eligible for refunds of the 2020 wage taxes paid. Talk to your revenue enhancement advisor if y'all need help determining your wage revenue enhancement obligations or potential refunds due for 2020.

Topics: SALT, Refunds, Philadelphia Wage Tax, City Wage tax, coronavirus, COVID-19, remote workforce

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Source: https://www.taxwarriors.com/blog/philadelphia-wage-tax-refunds-whats-new-for-2020-plenty

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