§ 143.5. Employer withholding.
(a) An employer who maintains an office or transacts business within a school district shall deduct and withhold school district personal income tax from the compensation of each employee of the employer under the following conditions:
(1) The employee is a resident individual of the school district.
(2) The employee provides services to the employer within the school district.
(3) The employer is required under section 316 of the TRC (72 P. S. § 7316) to deduct and withhold Pennsylvania Personal Income Tax from the compensation of the employee.
(b) The school district personal income tax required to be deducted and withheld under subsection (a) shall be deducted and withheld for each payroll period in an amount equal to the product of the following:
(1) The school district personal income tax rate for the school district where the employer maintains an office or transacts business that is in effect during the payroll period, which rate can be found on the Department of Community and Economic Development’s Local Tax Withholding Register as established under section 351(c)—(e) of the TRC (72 P. S. § 7351(c)—(e)), regarding tax registers and local tax withholding registers.
(2) The compensation paid for the payroll period.
(c) Every employer required to deduct and withhold from compensation under subsection (a) who has not previously registered, shall within 15 days after becoming an employer, register with the tax collector for the school district where the employer maintains an office or transacts business, the name and address and other information the tax collector may require.
(d) Every employer required to deduct and withhold from the compensation of a person under subsection (a) shall on or before April 30, July 31, October 31 and January 31, file a return for and remit to the tax collector for the school district where the employer maintains an office or transacts business the amount of school district personal income tax deducted and withheld during the preceding 3-month periods ending March 31, June 30, September 30, and December 31, respectively. The information to be provided on the return must include:
(1) The name and Social Security number of each person from whose compensation withholding was made.
(2) The compensation subject to withholding during the preceding 3-month period.
(3) The amount of withholding.
(4) The school districts imposing the school district personal income tax on the compensation.
(5) The total compensation of all persons from whom the employer is required to withhold during the preceding 3-month period.
(6) The total school district personal income tax withheld and remitted with the return.
(e) The tax collector may require any employer who for two of the preceding four quarterly periods has failed to deduct and withhold the proper school district personal income tax, or any part thereof, or has failed to remit the proper amount of the school district personal income tax, to file a return and remit the withheld school district personal income tax monthly. In that case, the school district personal income tax to be withheld shall be made to the tax collector on or before the last day of the month succeeding the month for which the tax was withheld.
(f) On or before February 28, of the succeeding year, every employer required to withhold school district personal income tax under subsection (a) shall file the following with the tax collector:
(1) An annual return showing:
(i) The total amount of compensation paid and subject to withholding.
(ii) The total amount of school district personal income tax deducted and withheld from the compensation.
(iii) The total amount of school district personal income tax remitted to the tax collector for the period beginning January 1, of the current year, and ending December 31, of the current year.
(2) A return withholding statement for each person whose compensation was subject to withholding during all or any part of the period beginning January 1, of the current year, and ending December 31, of the current year, setting forth the name, address and Social Security number, the amount of compensation paid to the person during the period, the amount of school district personal income tax deducted and withheld, the political subdivisions imposing the tax upon the person and the amount of tax remitted to the tax collector. Every employer shall furnish two copies of the individual return to the person for whom it is filed.
(g) Every employer who discontinues business prior to December 31, of the current year, shall within 30 days after the discontinuance of business, file the returns and withholding statements required under this section and remit the tax due.
(h) An employer who willfully or negligently fails to deduct, withhold and remit the school district personal income tax as required under this section shall be liable for payment of the school district personal income tax that the employer was required to withhold to the extent that the taxes have not been recovered from the person from whom the withholding was to be made.
(i) Notwithstanding the provisions of this section, an employer may deduct and withhold school district personal income tax at the most recently available school district personal income tax rate on the Department of Community and Economic Development’s Tax Register as established under section 351(b) of the act (53 P. S. § 6926.351(b)). Further, an employer is not required to deduct and withhold school district personal income tax from the compensation of a resident individual or make reports of compensation deducted and withheld in connection with a school district personal income tax that is not officially released on the Department of Community and Economic Development’s Local Withholding Tax Register as prescribed in section 351 of the act.
(j) The failure or omission of an employer to deduct, withhold and remit the school district personal income tax required under this section does not relieve any person from the payment of the school district personal income tax or from complying with the filing requirements of this article.
(k) Nothing in this section shall be construed to prohibit an employer from voluntarily deducting and withholding school district personal income tax from the compensation of a person who is subject to school district personal income tax but is not a resident individual of the school district in which the employer maintains an office or transacts business and to which the person reports to work. If an employer voluntarily deducts and withholds school district personal income tax from a person, the employer shall remit the tax and file the returns and reports required under subsections (d) and (f) with the tax collector for the school district where the person is a resident individual.
Cross References This section cited in 61 Pa. Code § 144.3 (relating to employer withholding credit); and 61 Pa. Code § 145.3 (relating to form).
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