On May 4, 2018, Gov. Tom Wolf signed Act 18 of 2018, which ensures that Pennsylvania taxpayers are not double-taxed by jurisdictions that levy a local earned income tax. The Pennsylvania Institute of Certified Public Accountants applauds Wolf for passing this much-needed reform, which had overwhelming bipartisan support in the Pennsylvania Legislature and provides greater clarity in the collection of local income taxes.
For years, the PICPA has advocated for reform to local earned income tax collection that would protect Pennsylvania taxpayers. While Act 32 of 2008 did much to streamline collection across the state, Act 18 of 2018 provides clarity to the local earned income tax crediting provisions, eliminating the potential for double taxation. Other protection provisions in the new law include a prohibition against charging taxpayers with no income a fee when they do not file a local tax return and clarification of the withholding tax rates for employees who are on a temporary assignment outside their usual tax jurisdiction.
This legislative initiative was led by state Rep. George Dunbar, R-Westmoreland, who crafted the original bill with input from CPA tax practitioners from across the state, including PICPA members. Equity and fairness are two principles of PICPA’s Guiding Principles of Good Tax Policy, and we are grateful that Wolf understood the oversight and clarifications this legislation will provide.
Michael D. Colgan, CAE
Executive Director and CEO, Pennsylvania Institute of CPAs