Is it true I don't have to pay Pennsylvania local earned income tax on earnings from any second job I have?

by Amy M. Swartzfager, CPA | Feb 05, 2019

I live in a small borough in Pennsylvania, and I work more than one job. Is it true I do not have to pay local earned income tax (EIT) on earnings from any second job I have or had? My primary employer did withhold the local EIT, by the way. Also, what form would I have needed to complete to submit (along with a paystub showing my primary employer withheld earned income tax)? Is there a way of getting a refund for any EIT withheld by my secondary employers if this is true? I am new to Pennsylvania, and just learned this from another employer I work for. 

Local earned income tax (EIT) is due on any earned income in Pennsylvania. This includes any type of wage income, along with business income that is reported on a Schedule C or Schedule K-1 from an interest in a partnership. This tax should be withheld and remitted by your employer. You will report your wages on the local earned income tax return. The tax rate and tax administrator are based on where you live and where you work. You can look up the tax rate and tax administrator on the Pennsylvania Department of Community and Economic development’s website by submitting your work and home addresses. You can also download the generic EIT form from the website.

I believe you may have confused the EIT with the local services tax (LST). Pennsylvania has an LST previously known as the Occupational Privilege Tax (OPT) that only needs to be withheld by one employer. It is withheld at a rate of $1 per week for the privilege of working in Pennsylvania, and is not to exceed $52 per year. This would not need to be withheld by a second employer. An exemption form for LST can be submitted to your secondary employer. You can find more information about LST on the Pennsylvania Department of Community and Economic Development’s website.

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Answered by: Amy M. Swartzfager, CPA, is a senior tax analyst with API Technologies Corporation in Fairview, 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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