Philadelphia officers are bracing for what may very well be a more-than-$100 million blow to the town’s tax income as a consequence of pandemic-related distant work and job losses.
Hundreds of employees for city-based companies who stay within the suburbs and have been working from house through the COVID-19 pandemic are entitled to a metropolis wage tax refund in spring of 2021. Non-residents make up about 40% of Philadelphia’s wage tax payers, the biggest portion of the town’s tax income.
Metropolis officers elevated the non-resident wage tax price this yr from 3.4481% to three.5019% for fiscal yr 2021 to attempt to make up for among the anticipated income losses. However nonetheless they count on a 5% lower in income – or a $100 million hit to the town’s coffers. The wage tax normally brings in about $2 billion yearly.
“Whether or not or not it’s wage reductions, diminished hours, diminished employment, we additionally included commuter’s not working within the metropolis and that being house,” mentioned metropolis funds director Marisa Waxman.
However the state board that oversees the town’s funds worries that the hit may very well be even higher that the town is anticipating.
“All of it relies on what number of file and the salaries of these those who file,” mentioned Harvey Rice, Govt Director of the Pennsylvania Intergovernmental Cooperation Authority. “The upper the wage, the larger the refund.”
A number of the metropolis’s largest firms have already stopped taking the non-resident wage tax out of workers’ paychecks, so officers warn that, earlier than individuals apply for a refund, they verify with their firm to see if that has already been taken care of.
Metropolis residents nonetheless need to pay their wage tax irrespective of the place they had been working this yr.
However for these non-residents who’re eligible for a refund, a kind must be stuffed out to be able to get the refund. That kind just isn’t but on-line however will probably be discovered on this web page in early January, metropolis officers mentioned.
Filers ought to wait till they’ve their W-2s earlier than submitting.
Officers will probably be placing out steerage for each employers and workers within the coming days, a metropolis spokeswoman mentioned.
The post Philadelphia Could Lose Out on More Than $100M in Tax Revenue Due to Pandemic-Related Remote Work, Job Losses – NBC10 Philadelphia appeared first on Correct Success.
source https://correctsuccess.com/taxes/philadelphia-could-lose-out-on-more-than-100m-in-tax-revenue-due-to-pandemic-related-remote-work-job-losses-nbc10-philadelphia/
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