Who Pays Local Income Tax in Pa?
Individuals who are domiciled in PA or who are statutory residents of PA are subject to PA personal income tax on income, regardless of where the income was earned. Both residents and statutory residents may qualify for credits against tax paid to other states on income earned outside of PA.
Do you have to withhold taxes from out of state employees in PA?
As an out-of-state employer, you are NOT required to complete the Residency Certification Form or withhold the local Earned Income Tax (EIT) for a PA resident employee. However, the PA resident employee will still be subject to and owe the “Total Resident EIT Rate” based on their PA home municipality.
Do you pay taxes if you are a nonresident in Pennsylvania?
Pennsylvania has reciprocity agreements with several neighboring states. This means nonresident states will not tax a nonresident employee’s compensation, and that the compensation will be subject to the taxation of the worker’s resident state.
