Earned Income Tax Refund FAQ

Reasons Your Refund May Be Denied
  • The Local Services Tax cannot be used as credit against your Earned Income Tax liability.
  • Federal Income Tax cannot be used as a credit towards Local Earned Income Tax liability.
  • PA State Tax cannot be used as credit towards Local Earned Income Tax liability.
  • Social Security/Medicare Tax cannot be used as credit towards Local Earned Income Tax liability.
  • PA Unemployment Compensation cannot be used as credit towards Local Earned Income Tax liability.
  • Employee-directed contributions to retirement plans are taxable.
  • Stock Options are taxable.
  • The non-resident rate of the municipality in which you work is higher than your resident tax rate, therefore the additional tax withheld remains in the jurisdiction you work.
  • Losses from a business cannot be used to offset wages – for 2009 and forward.
  • Earnings reported on Schedule K-1 Sub-Chapter S (Form 1120-S) are not taxable on the local level and therefore should not be used in the calculation of your Final Earned Income Tax liability.
  • The taxing jurisdiction in which you work taxes residents and non-residents; therefore the additional tax withheld remains in the jurisdiction you work.
  • Incorrect tax rate used on your final return.
  • Incorrect figure from W-2 used
  • Rounding of figures were incorrect.
  • Difference in payments from what is indicated on your return and what was received.
  • Cost and/or Penalty & Interest previously paid cannot be used as credit towards tax liability.
  • Your Out of State credit cannot exceed your total liability.
  • Your Philadelphia credit cannot exceed your total liability.
  • State Taxes withheld in OH, NJ, VA, WV, MD, cannot be credited towards a refund of your local tax.
  • Local Earned Income Tax withheld on your return differs from the tax withheld on your W-2.
  • An incorrect account and / or routing number was entered.
  • The account and routing numbers are for a closed or inactive account.


If we are unable to verify the account, an email will be sent to the email address used to sign into your e-File account.

If the banking information is not corrected, a paper check will be mailed.

If you have additional/specific questions that are not addressed above, please click on the link to send an inquiry to our customer care department.

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