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Philadelphia's Non-Resident Wage Tax Increasing July 1, 2020

Thomas M. Frascella Director, Tax Strategies, State & Local Tax Group Leader

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.

If you missed the webinar, you can watch the rebroadcast here.

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.

Information contained in this alert should not be construed as the rendering of specific accounting, tax, or other advice. Material may become outdated and anyone using this should research and update to ensure accuracy. In no event will the publisher be liable for any damages, direct, indirect, or consequential, claimed to result from use of the material contained in this alert. Readers are encouraged to consult with their advisors before making any decisions.

Contact the Author

Thomas M. Frascella

Thomas M. Frascella

Director, Tax Strategies, State & Local Tax Group Leader

State and Local Tax Services Specialist

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