Frequently Asked Questions

 

With the required changes that have been implemented due to the COVID-19 Pandemic, many of the businesses located within the city are requiring their employees to work from their homes instead of their offices in the city.

Here are the answers to some frequently asked questions due to this change.

  1. If my employer is requiring me to work from home should I be paying the Non-resident wage tax to the City of Philadelphia?

NO, the City of Philadelphia has instructed the employers located in the city, who are requiring their employees to work from home due to the COVID-19 event, to not withhold the non-resident tax from your pay.  If they have done so; you are eligible to seek a refund from the city for the amounts withheld for the days you have been required to work from home.

  1. If I am now required to work from home should my employer be withholding my local tax rate from my compensation?

YES, Under ACT 18, if your employer is requiring you to work from home, your home must be considered a work location and they are required to register it with the Earned Income Tax Collector for the county in which you reside. Once registered, they are required to withhold the tax based on the tax rate in place for your residence and to remit it quarterly on your behalf to the collector.

Your employer can contact us to acquire the needed employer id # by completing the registration form found on our website at: https://www.hab-inc.com/forms/forms-for-employers/.

  1. If my employer refuses to withhold the tax due my resident jurisdiction, what am I required to do?

If you are no longer paying the Non-Resident Tax to the city and your employer does not withhold the local taxes due from your compensation, you are required to remit the payments due on a quarterly basis.  If you are in need of forms to do so, these can be found on our website at: https://www.hab-inc.com/forms/forms-for-individuals/. The forms needed are found under the heading – Quarterly Estimates.

  1. If my employer is not requiring me to work from home, but has given me the option to do so, do I need to pay the non-resident wage tax to the city?

YES, if your employers office in the city is open and you are not required to work from home by your employer, but are working from home for your own convenience or safety, the city still considers you as employed in the city and subject to their Non-resident wage tax levy.

  1. If I am requesting a refund of all or a portion of the wage tax paid to the city, does this effect the credit I can use on my 2020 Local Tax Return?

YES. If you are requesting a refund for part or all of the wage taxes paid to the city in 2020, you should only enter the portion of the tax that you are not seeking a refund for. If you are requesting it all back, then do not enter a credit on Line 12.  You will then owe any tax that is then shown as due on line 16.

If your refund is subsequently denied by the city, you will be able to file an amended return using the taxes not refunded as credit towards your taxes due and seek any refund due to you based on that change.

The City of Philadelphia has published their own FAQ’s on various scenarios that you may find informative as well. It can be viewed at: https://www.phila.gov/services/payments-assistance-taxes/refunds/wage-tax-refunds/