Act 32 Local Government FAQ
- Frequently Used Terms
- What is Act 32?
- What changes does Act 32 make?
- How do I contact my Tax Collection Committee?
- Does Act 32 apply to the collection of real estate taxes or affect elected tax collectors?
- What are PSD codes and what do they have to do with Act 32?
- Does Act 32 provide Political Subdivisions with any new taxing authority?
- When will I receive my Taxes?
- Will my PSD receive any reports from JTS?
- How are requests for additional information or reports made?
- Will Employee Tax information submitted to JTS be kept confidential?
- Where can I find out more about Act 32?
The legislative goals of Act 32 include:
- Establishing uniform withholding, remittance, and distribution requirements;
- Providing for more accountability, transparency, oversight, and enforcement and strengthening reporting requirements to better track every tax dollar;
- Developing uniform forms, notices, reports, schedules, and codes for school districts, municipalities, and tax collection districts;
- Consolidating and streamlining the EIT collection process across the Commonwealth.
Act 32 makes the following changes:
- Significantly reduces the number of tax collectors in Pennsylvania (from 560 to 69) and establishes a single Tax Collection District (TCD) in each county (except Allegheny County, where there are 4 TCDs, and Philadelphia County, which is exempt from Act 32);
- Requires all employers to withhold Earned Income Tax (EIT) on behalf of all employees;
- Establishes strict reporting requirements for tax collectors collecting EIT;
Authorizes the Pennsylvania Department of Community and Economic Development (DCED) to adopt uniform rules, regulations, and forms to be followed and utilized in each TCD by its designated Tax Officer.
PSD codes, or political subdivision codes, are six-digit numbers issued by the DCED which are used to identify the location of an Employee’s residence and work site. PSD codes aid both Employers and Tax Officers in identifying the correct amount of EIT to be withheld from Employees and in the distribution of the withheld EIT to the proper taxing bodies. For this reason, accurate PSD codes must be included when filling out an Employee’s Certificate of Residency Form [available here].
A list of PSD codes is available from the DCED, in Excel format, here. These PSD codes are distinct from and are not to be confused with any other DCED codes or any codes used by payroll service companies
Act 32 has no effect on the existing taxing authority of Political Subdivisions (PSDs). Many municipalities and school districts, however, are re-enacting, re-stating, and amending their existing EIT and Net Profits Taxes ordinances and resolutions to be more in line with the changes mandated by Act 32.
- Assume that JTS is not my TCD’s Tax Officer but receives an Employer withheld Tax payment for a Taxpayer residing in my TCD. When must JTS remit that Tax payment to my TCD?
Act 32 requires that, between January 1, 2012 and April 1, 2013, JTS must remit all Taxes collected no later than 60 days after Taxes are received by JTS to the Tax Officer of the appropriate Tax Collection District(s) (TCD(s)). On or after April 1, 2013, JTS must remit all Taxes collected no later than 30 days after such Taxes are received by JTS to the Tax Officer of the appropriate TCD(s).
- My Political Subdivision (PSD) is located in either the Southwest Allegheny County or Allegheny County Central TCD. When will JTS remit a Tax it receives for my PSD?
JTS has contractually agreed to remit taxes to PSDs within the TCDs it represents as funds become available for distribution. Contact your Tax Collection Committee (TCC) for more information.
Political Subdivisions (PSDs) within the Tax Collection Districts (TCDs) represented by JTS will receive various reports, electronically, as required by contract. Each PSD will receive additional information regarding accessing these reports.
More information about Act 32 is available at the Pennsylvania Department of Community and Economic Development (DCED) Earned Income Tax (EIT) collection system webpage.