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PA Bulletin, Doc. No. 04-193


Notice to Employers Responsible for Personal Income Tax Withholding

[34 Pa.B. 647]

   Effective January 1, 2004, the Commonwealth's personal income tax rate increased from 2.8% to 3.07%. For employer withholding purposes, the increase applies to all compensation paid or made available after December 31, 2003, even if the compensation was earned for a period prior to the payment date. An employer who failed to withhold at the higher tax rate for compensation paid on or after January 1, 2004, is required to withhold the difference from later compensation payments (catch-up withholding).

   To allow employers to adjust their withholding for the change in the tax rate, the Department of Revenue (Department) is allowing employers a grace period in which to collect and remit catch-up withholding without incurring interest and penalties. No interest will be imposed on catch-up withholding that is collected on or before March 31, 2004, and remitted by the employer's first scheduled remittance date thereafter (semimonthly employers--April 5, 2004; monthly employers--April 15, 2004; and quarterly employers--April 30, 2004. Catch-up withholding remitted thereafter will be subject to applicable interest and penalties.

   Employers with questions regarding this notice should contact the Department's Taxpayer Service and Information Center at (717) 787-1064.


[Pa.B. Doc. No. 04-193. Filed for public inspection January 30, 2004, 9:00 a.m.]

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