How do I maintain Pennsylvania local taxes?

In this video tutorial series on Pennsylvania local taxes, we’ll look at entering a PSD code using employee self-service, performing ongoing maintenance, and viewing run results and the tax filing report details to confirm accurate withholding.

For more information on setting up new work locations, configuring TRUs or PSUs to withhold for residents working outside of PA, the Pennsylvania/Maryland reciprocity agreement, and verifying and correcting the PSD code for new employees, please refer to Setting Up Pennsylvania Local Taxes.

You can allow employees to enter and update their own Resident and Work PSD codes on the Pennsylvania Residency Certification form of their tax card by enabling self-service. If enabled, this is the form where they will enter their appropriate PSD information.

Another important part of Pennsylvania taxation is ongoing employee maintenance. There is a Synchronize Calculation Card process that tries to keep records in sync, however these transactions will require manual maintenance of the PSD code information on the employee’s tax card, as the process will not automatically update the correct information:

When the employee lives in a taxation district that is different than what their home address indicates.

When there’s a HOME or WORK address change for an employee. Although the Synchronize Calculation Card process will update the PSD code, the information will most likely not be correct, as the process is basing the PSD code on the postal address city. It’s always a best practice to ensure your home and work PSD codes are accurate any time there is a change to a home or work location.

When there’s more than one PSD code for the city, township or school district in which the employee lives. If there is more than one, the system will update the first PSD code in the list, which is not always accurate.

Now that your records are set up correctly, you can verify that the appropriate Pennsylvania taxes have been withheld by reviewing the employee’s pay slip and run results.

The TCD, Resident PSD, and Work PSD codes are all stored in the Run Results table of the SOE. View the Local Wages and Taxes element to see a summary of all of these items in the Run Results.

Next, we’ll look at how the Pennsylvania data appears on the tax filing audit reports.

You can use the audit report from the Third-Party Periodic Tax Filing Extract process to verify your Pennsylvania local withholdings. The Third Party Periodic Tax Filing Audit Report shows tax balances summarized by jurisdiction and payroll frequency. For Pennsylvania locals, this report shows the jurisdiction of where the taxes are reported to. In most cases, this is the work jurisdiction. Note that the city and school balances are combined and reported under the city jurisdiction for Pennsylvania locals subject to PA Act 32.

In addition, you can use the Third-Party Tax Filing Audit Report Detail to verify your Pennsylvania local withholdings at the employee level. You can convert this pipe-delimited output file to a Microsoft Excel spreadsheet, and sort the employee-level detail for tax balances by jurisdiction and payroll frequency. For Pennsylvania locals, this output file includes additional data specific to PA Act 32 such as the work and resident PSD codes, tax collection district code, residence geocode, and residence county and city.

Like the Periodic Audit report, the Quarterly Audit report combines city and school wage and tax data, and shows the Pennsylvania local taxes for the jurisdiction that the taxes are reported to. The PSD code is also shown.

For more information, please refer to the following documentation.

This concludes Maintaining Pennsylvania Local Taxes.

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