BUSINESS ALERT

Calculating Wage Taxes in Philadelphia
During the Coronavirus Shutdown

March 30, 2020
An unanticipated benefit for businesses with employees forced to work from home (outside of Philadelphia) is a decrease in the Philadelphia Wage Tax.

According to the City of Philadelphia Department of Revenue, non-resident employees based in Philadelphia are not subject to the Philadelphia Wage Tax during the time they have been ordered to work outside of Philadelphia.

Ordinarily, non-resident employees with a base of operations in Philadelphia are subject to the wage tax even if they work from home and are authorized to do so. In light of the COVID-19 pandemic, however, where non-resident employees have no choice and must work from their homes outside of Philadelphia, no Philadelphia Wage Tax will be due for this period.

For anyone having the Philadelphia Wage Tax inadvertently withheld in 2020, a refund with a Wage Tax reconciliation form will be made available for tax year 2021.

The City of Philadelphia continues to require an employer to withhold and remit Wage Tax for all its Philadelphia residents, regardless of where they perform their duties.
Please contact Zarwin Baum DeVito Kaplan Schaer & Toddy, P.C.’s Commercial Department with any questions regarding business taxes.
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