The City of Philadelphia announced yesterday that there will be a wage tax rate increase for non-residents starting July 1, 2020. The new wage tax rate for non-residents who are subject to the Philadelphia City Wage Tax is 3.5019%. The Wage Tax rate for residents of Philadelphia will remain the same at 3.8712%.
Any paychecks issued after June 30, 2020 must have Philadelphia City Wage Tax withheld at the new rate for non-residents.
We recently conducted a webinar on how the pandemic may affect your business's state and local tax liabilities. In the webinar, we discussed how state and local governments are facing unprecedented budget deficits and are in the process of understanding how to respond to close the gap in revenue collections related to the government-ordered shutdowns. Tax rate increases are certainly one option on the table for many states and local municipalities. It's important to understand how your business may be impacted and develop a strategy to respond.
As a firm we are here to help any way we can. Should you have any questions or concerns regarding the Philadelphia wage tax or any other state and local tax matters, please do not hesitate to contact our State and Local Tax group. We also continue to update our COVID-19 Resource Center, which you can access here.
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