Pennsylvania State and Local Tax Updates September 2020

Philly updates low-income senior citizen real estate tax freeze program

If you’re a Philadelphia resident with questions about the low-income senior citizen real estate tax freeze program, there’s new guidance available. The city’s Dept. of Revenue has issued a document with answers to frequently asked questions (FAQ) on the program, which freezes the tax bill for senior citizens enrolled in the program. The deadline to apply is Jan. 31, 2021. If you were a taxpayer that applied early (by Sept. 13, 2020) you may see the discount reflected on your 2021 real estate tax bill. Applicants approved after that date will receive a second bill.

Pennsylvania announces 2021 new unemployment tax rates

Pennsylvania announces new unemployment tax rates for 2021. For experienced employers, the rates will range from 1.2905% to 9.9333%. This includes a 5.40% surcharge, 0.5% additional contribution tax and a 1.1% interest factor. Delinquent employers pay a basic rate that is 3.0% higher. The taxable wage base will continue to be $10,000 in 2021. Employees must also make unemployment tax contributions, at the rate of 0.06% in 2021 (unchanged from 2020). That tax will be deducted from all of the employee’s taxable wages (not just up to the taxable wage base).

Update on Philadelphia U and O tax status

During Philadelphia’s modified green phase reopening for non-essential businesses, the city’s Dept. of Revenue has issued guidance for certain taxes. The use and occupancy tax (U and O tax) ordinarily paid by Philadelphia businesses was suspended after March 17, 2020, when businesses were ordered to close due to COVID-19. That suspension continues during the modified green phase for companies that are able to (and must) operate remotely. Businesses that are allowed to open during this phase, whether or not they choose to do so, are subject to U and O tax. Businesses that continued operations are also subject to the U and O tax. Contact Brady Ware with questions.

Payroll tax deferral doesn’t apply to Pennsylvania personal tax

The upcoming federal deferral of payroll taxes doesn’t apply to Pennsylvania personal tax, says the PA Dept. of Revenue (DOR). The federal government has announced that employment tax (Social Security and Medicare tax) will be deferred from Sept. 1 through Dec. 31, 2020, to help taxpayers in light of the COVID-19 pandemic for those earning less than $4,000 every two weeks. However, the DOR has advised PA employers to continue to withhold PA personal income tax from each payment of taxable compensation to their employees. This directive was published in PA’s COVID-19 Information. Contact Brady Ware with questions.

Philadelphia homestead exemption guidance available

Guidance is available on the Philadelphia homestead exemption from the city’s Dept. of Revenue. Some of the topics included in the newly released guidance include: whether a taxpayer can have homestead status on more than one property; how long a property is entitled to homestead status; the requirements to apply for homesteads; and partial homesteads. You can apply for the Homestead exemption by filling out the online application or by printing a form and mailing it to the address listed on the Philadelphia Dept. of Revenue Homestead Help page.

PA estimated income tax due date is approaching

If you’re a Pennsylvania resident who owes estimated PA income tax, your next due date is rolling up fast. The third installment of 2020 tax is due on Sept. 15. Under PA tax law, if you have at least $8,000 of income that isn’t subject to employer withholding for 2020, you may be required to make estimated payments or face tax penalties. To learn whether you must make estimated tax payments, read the full rules or contact Brady Ware for help. You can also print a coupon (Form PA-40ESR [I]) to accompany your tax payment.


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