Act 32 of 2008

Act 32 was enacted in 2008 to standardize the local earned income taxing system in Pennsylvania. It consolidated the process by creating new tax collection districts (TCDs), standardizing forms and mandating employer withholding statewide in 2012. Act 32 divided the state into 69 TCDs, one TCD for each county with Allegheny County divided into four (4) TCDs. Philadelphia is not part of Act 32 as they fall under the Sterling Act. The number of collectors in the state was reduced to 21.

To learn more about Act 32 use the links below to visit the Pennsylvania Department of Community and Economic Development website and read our Frequently Asked Questions.

Links and Documents
Frequently Asked Questions

In simple terms, Act 32 has three requirements for employers:

1. Employers must obtain a completed Certificate of Residency for ALL employees;

2. Employers must withhold local earned income tax from ALL employees;

3. Employers must report employee detail and local income taxes and remit withheld taxes on a quarterly or monthly basis;

In addition, we request that any employer reporting 10 or more employees submit their report electronically.   Filing using eReporting meets this request.

The Certificate of Residency is an addendum to the Federal Employee’s Withholding Allowance Certificate (Form W-4). Every PA employer must require each new employee to complete a Certificate of Residency.

You can maintain and print your Certificates of Residency through our eReporting system. 

Since the Certificate of Residency provides employers and collectors with important information to determine the correct Taxing Jurisdiction PSD Code and withholding rate, it is recommended that ALL employees complete this form, even if they are out of state residents. 

An employer shall also require any employee who changes his or her address to complete a new Certificate of Residency form.

No.    Like the federal form W-4, the Certificate of Residency serves as an information tool for the employer.

The Certificate of Residency helps the employer provide accurate information to the tax collector, such as the correct political subdivision codes (PSD Codes) and other employee identification information.

Employers should maintain the Certificates and, upon request, provide them to the taxing authority.

As of January 1, 2012 all employers in Pennsylvania must withhold the local tax based on the employee’s place of residence or work location.

The applicable tax rate(s) are located on the DCED Municipal Statistics website. 

Click on ‘Find Your Withholding Rates by Address.’

The DCED Website link is under the Resources Tab.

You may use the information as collected on the employee completed Certificate of Residency and go to the DCED Municipal Statistics website to determine the PSD Code and correct withholding rate(s).

Remember that you are required to withhold the greater of the amount of the resident tax for where an employee lives (domicile), or the nonresident tax for where the employee works (work location).

You can also use the eReporting Certificate of Residency to determine the withholding rate as the application calculates the rate for you.

Yes.    The employer should include all employees on the Employer Quarterly/Monthly Earned Income Tax report including the proper detail for where each employee lives and works.

The employee’s tax rate may change based upon the new residence (and new PSD Code).

When the withholding rate changes due to a move by the employee, you should begin withholding at the new current rate at the next pay cycle following the move date.

Whether or not the move changes the withholding rate, you should list the employee twice on your quarterly/monthly report for the period that includes the move, once for each residence.


You are required to file a return for every quarter/month from the period in which you first have employees through the period in which you notify us that you no longer have employees, even if you paid $0 wages during a period.

The most efficient method of remitting the local EIT will be through the eReporting system using the ACH Debit option.

You may also pay by check whether or not you are using eReporting.    If you pay by check you must include either the Employees Quarterly Earned Income Tax Form (available under the Resources Tab) or the payment voucher from your eReporting submission session.

Per Act 32, employers are required to file a report and remit the amount of Earned Income Tax due ‘within 30 days following the end of each calendar quarter’ or ‘within 30 days following the last day of each month.’ 

For Quarterly reports the due dates are: 1st quarter – Apr 30, 2nd quarter – Jul 30, 3rd quarter – Oct 30 and 4th quarter – Jan 30.

For Monthly reports the due dates are the 30th of every month for the prior month, with the exception of January which is due on March 2 in normal years, and March 1 in leap years. 

Annual Reconciliation Report must be filed by February 28. 

If any due date falls on a weekend or federal holiday, the due date moves to the next business day.

Act 32 places the responsibility for meeting the reporting and remittance requirements on employers. 

Therefore, any penalties and fees will be imposed on the individual employers and not on the payroll companies.

Yes. Even if you use a payroll processing company, you as the employer are ultimately responsible for the reporting and remittance of EIT and LST. 

By registering on the eReporting system, you will have access to the information reported by your payroll company for review and you will meet the registration requirements of Act 32. 

In addition, by registering your reports will process more efficiently on the eReporting system.