Do I need to file an earned income tax return if I don’t own a home or have any kids?

Do I need to file an earned income tax return if I don’t own a home or have any kids?

by Elizabeth W. Kidd, CPA | Jan 14, 2019

I live in Bristol Township, Pa. For years I've been completing the earned income tax through Keystone collection group. I thought that earned income was for tax filers who have kids and don't make too much money. I don't own a home or have any kids, so I don’t think I should have to file this earned income tax return. I've tried calling Keystone, but no one has called me back in over two weeks. Do I need to file this earned income tax return in addition to my state and federal taxes?

Municipalities in Pennsylvania have the ability to levy a tax on earned income. If you receive income from wages or self-employment in a municipality that has this tax (which is most of them), you must file a return with the tax collector (which may be a tax collection agency). If you receive wages, your employer should be withholding the correct amount of tax.
The earned income tax has nothing to do with home ownership. It is imposed on those who live or work in a municipality. You mentioned that you thought the local earned income tax is for filers with children and lower incomes. What you may be thinking of is the earned income credit on the federal return. This is not the same as the earned income tax on a local return. Unless you have no earned income at all, you must file this return. Even if no tax is due, which is the norm for employees when employers do the proper withholding, you must file the form. If you do not, you may face penalties for failure to file.

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Answered by: Elizabeth W. Kidd, CPA, is a retired accounting instructor in Erie, Pa.

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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