PROPOSED RULEMAKING
DEPARTMENT
OF REVENUE
[ 61 PA. CODE CH. 113 ]
Withholding of Tax
[47 Pa.B. 6726]
[Saturday, October 28, 2017]The Department of Revenue (Department), under section 354 of the Tax Reform Code of 1971 (72 P.S. § 7354), proposes to amend § 113.4 (relating to time and place for filing reconciliation and withholding statements) to read as set forth in Annex A.
Purpose
The purpose of this proposed rulemaking is to improve the efficiency and accuracy of the Department's tax system by further automating the reporting of tax information.
Explanation of Regulatory Requirements
Proposed amendments to § 113.4(c) reduce the threshold for the electronic transmission requirement for the annual reconciliation statement from 250 to 10 or more withholding statements (Form W-2). In addition, ''magnetic media'' is proposed to be deleted and replaced with ''electronic transmission.'' This proposed rulemaking amends the method of filing for certain affected employers, not the information that is required to be reported. Finally, references to specific form numbers in subsections (b) and (c) are proposed to be deleted. Given that form numbers change periodically, the Department is proposing to delete the numbers to avoid confusion and the forms are being referenced in accordance with § 2.12 (relating to forms) of the Pennsylvania Code & Bulletin Style Manual.
Affected Parties
Employers and tax practitioners in this Commonwealth will be affected by this proposed rulemaking.
Fiscal Impact
The Department determined that this proposed rulemaking will have minimal revenue impact on the Commonwealth. This proposed rulemaking is not designed to be revenue generating. It is an administrative processing change that will lower the Department's operating costs.
Paperwork
This proposed rulemaking will not create additional paperwork for the public or the Commonwealth. This proposed rulemaking will require certain employers to file their annual reconciliation statements by means of electronic transmission instead of on paper.
Effective Date
This proposed rulemaking will become effective upon final-form publication in the Pennsylvania Bulletin.
Sunset Date
This regulation is scheduled for review within 5 years of final-form publication. A sunset date has not been assigned.
Public Comments and Contact Person
Interested persons are invited to submit in writing comments, suggestions or objections regarding this proposed rulemaking to Mary R. Sprunk, Office of Chief Counsel, Department of Revenue, P.O. Box 281061, Harrisburg, PA 17128-1061 within 30 days after the date of the publication of this proposed rulemaking in the Pennsylvania Bulletin.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P.S. § 745.5(a)), on October 18, 2017, the Department submitted a copy of this proposed rulemaking and a copy of a Regulatory Analysis Form to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House Committee on Finance and the Senate Committee on Finance. A copy of this material is available to the public upon request.
Under section 5(g) of the Regulatory Review Act, IRRC may convey comments, recommendations or objections to the proposed rulemaking within 30 days of the close of the public comment period. The comments, recommendations or objections must specify the regulatory review criteria in section 5.2 of the Regulatory Review Act (71 P.S. § 745.5b) which have not been met. The Regulatory Review Act specifies detailed procedures for review prior to final publication of the rulemaking by the Department, the General Assembly and the Governor.
C. DANIEL HASSELL,
SecretaryFiscal Note: 15-459. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 61. REVENUE
PART I. DEPARTMENT OF REVENUE
Subpart B. GENERAL FUND REVENUES
ARTICLE V. PERSONAL INCOME TAX
CHAPTER 113. WITHHOLDING OF TAX § 113.4. Time and place for filing reconciliation and withholding statements.
(a) An employer shall [submit] furnish a wage and tax withholding statement to each of his employees on or before January 31 following the year of payment of compensation, or within 30 days from the date of the last payment of compensation if employment or the business is terminated.
(1) An employer shall use the combined Federal-State Wage and Tip Withholding Statement (Form W-2) issued by the Internal Revenue Service or one that conforms thereto with the word ''Commonwealth'' printed, stamped or typed thereon. The statement [shall] must show the name of employer, address and identification number of the employer; the name, address and Social Security number ofthe employee; the total compensation paid during the taxable year; and the total amount of Pennsylvania tax withheld during the taxable year.
(2) The wage and tax withholding statements required in this chapter shall be in addition to a requirement of the Federal or a local government.
(b) [A completed Reconciliation Statement (Return Form PA-W3), reconciling Personal Income Tax withheld with related quarterly withholding returns and deposit and employee withholding statements shall be submitted by the following:] Every employer who withholds tax under this chapter shall file with the Department an annual withholding reconciliation statement, on a form provided by the Department, along with a copy of all employee wage and tax withholding statements, by the following:
(1) A going business for tax withheld in the prior year, annually, by January 31.
(2) A terminated business within 30 days after the end of the month in which business or payment of compensation ceased.
(c) [Reconciliation Statements (Form PA-W3), with accompanying withholding statements (Form W-2) for each employee shall be forwarded by means of first class mail with sufficient postage or electronic or magnetic media as specified in instructions of the Department to the Department. If an employer is required to file 250 or more withholding statements, the reconciliation statement, with accompanying withholding statements shall be forwarded by means of electronic or magnetic media as specified in the instructions of the Department available on its website or at its Harrisburg or district offices.] The annual withholding reconciliation statement and accompanying wage tax withholding statements as required under subsection (b) shall be forwarded to the Department by first class mail or electronic transmission as specified in instructions of the Department. If an employer is required to furnish ten or more wage and tax withholding statements under subsection (a), the employer shall transmit electronically to the Department the annual withholding reconciliation statement and accompanying wage and tax withholding statements.
[Pa.B. Doc. No. 17-1773. Filed for public inspection October 27, 2017, 9:00 a.m.]
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