Local Earned Income Tax (EIT)

Act 18 of 2018 Enacted

Allows PA Taxpayers to Be Taxed Uniformly

 Before the enactment of Act 18 of 2018 (effective July 3, 2018), there existed a lack of uniformity among the various local tax jurisdictions and some jurisdictions acted in an arbitrary and capricious manner when it came to taxing individuals. The new act brings uniformity and fairness to the enforcement of the Local EIT.

Tax practitioners have been requesting changes to the local EIT for several years. In November 2016, the governor unexpectedly vetoed nearly identical legislation (House Bill 245) due to concerns about the impact of the bill. Wolf had stated his opposition was because the legislation “would cause even a limited number of school districts to lose revenue …” and requested “a modified version of this bill that does not negatively impact the finances of school districts.” The Pennsylvania Institute of CPAs has stated that “The signing of Act 18 is a huge victory for Pennsylvania residents . . . .” “Equity and fairness are two of PICPA’s Guiding Principles of Good Tax Policy, and this law clarifies the crediting language for local tax collectors, which should foster uniformity and efficiency across the state.”

Act 18 amends several items within Act 32 of 2008, [Read more…] about Local Earned Income Tax (EIT) Act 18 of 2018 Enacted