Local Earned Income Tax Return Form - School District Of Cheltenham Township printable pdf download

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QUESTIONS AND ANSWERS ABOUT THE EARNED INCOME TAX

(YOUR TAX RETURN COPY IS ON THE BACK OF THIS FORM)

What Is The “Earned Income Tax?”

The Earned Income Tax has been levied by your resident taxing jurisdiction (i.e., the township, borough or school district in which you live).

Earned Income is defined as salaries, wages, commissions, bonuses, incentive payments, fees, tips and/or other compensation for services

rendered, whether in cash or property, and whether paid directly to you or through an agent. In addition, the Net Profits of a business are subject

to a Net Profits tax. “Net Profits” are defined as the net income from the operation of a business, profession, or other activity, except corporations,

after deductions for all operating costs and expenses incurred in conducting said businesses.

What Income Is Specifically Exempt From The Earned Income Tax?

Income such as dividends, interest, income from trusts, bonds, insurance proceeds and stocks (Schedule D) is exempt. Also exempt are payments

for disability benefits, old age benefits, retirement pay, pensions, social security payments, public assistance or unemployment compensation

payments made by any governmental agency, any wages or compensation paid by the United States for active service in the armed forces of the

United States including bonuses or additional compensation for such service, supplemental unemployment compensation from employers or

unions.

If The Tax Is Withheld In Another PA Community Where I Work, Do I Also Pay The PA District In Which I Live?

No. Generally the tax withheld by your employer will be remitted to your resident taxing jurisdiction. However, you are still required to file an

annual tax return with your resident taxing jurisdiction.

If I Am Subject To The Philadelphia Wage Tax, Must I Also Pay This Tax?

No, but you are still required to file a final return. If employed in Philadelphia, you may use the Philadelphia Wage Tax as a credit against your

liability to your resident jurisdiction, but the credit may not exceed the tax rate printed on the enclosed return. No refund or credit can be taken

for any withholding greater than the current tax rate for your resident taxing jurisdiction. Philadelphia Wage Tax credits may not be applied

to your spouse’s liability.

Whose Earned Income Tax Will Be Withheld By Their Employer?

Any individual working in a jurisdiction that levies the tax on residents and non-residents will have the tax withheld by their employer. If you

work in a jurisdiction that does NOT tax non-residents, your employer is only required to withhold for those individuals who live in that

jurisdiction. Occasionally, employers located in a jurisdiction where the tax is not levied will volunteer to withhold if your resident jurisdiction

levies the tax.

Must All Taxpayers File A Final Return?

Yes. A Local Earned Income Tax Return must be filed annually by April 15, (unless the 15th falls on a Saturday or Sunday then the due date

becomes the next business day) for the preceding calendar year. If you had no earned income, state the reason on the enclosed tax return.

What Should I Do If I Lived In A Jurisdiction/Municipality For Only Part Of A Year?

You are required to file a return for any period of time you were/are a resident to a municipality for which Berkheimer Associates is the Tax

Administrator. You are required to file for the period of time that you lived in that municipality and prorate your income, expense, withholding,

etc. Also you must complete the Part Year Resident Section on the top front of your Local Earned Income Tax Return.

What Documentation Do I Need To Submit With The Final Return?

You should submit documentation which sufficiently supports the amount reported on each line of your return, including but not limited to, W-

2s, Federal / State Business Reporting Schedules, Expense Schedules, etc. Refer to each line of the enclosed tax return and instructions for the

specific form or schedule required. Photocopies are acceptable.

Where Is My Earned Income Reported On My W-2?

Your local earned income should be reported in the box labeled “Local Wages, tips, Etc.” (Please note: If the amount reported in the Local box

is substantially less than the amount reported as Federal Wages, Tips or other compensation, then you should submit an explanation for this

difference.) Your local earned income should be reported in the box labeled “Local Income Tax”. If this box is not completed, then you should

refer to the box labeled “Medicare Wages”.

What If I Neither File A Return Nor Pay The Tax Due?

State law, as well as the local tax resolutions and/or ordinances, make it a summary criminal offense if a taxpayer fails to file a tax return as required.

This subjects the taxpayer to a fine not to exceed $500.00 per offense, plus the cost of prosecution. In default of payment of said fine and costs,

the taxpayer may be imprisoned for a period not exceeding thirty (30) days per offense. In addition, distress sale, wage attachment and/or civil

suit proceedings may be used to collect any unpaid tax found to be due, and penalties and interest may also be assessed.

What Return Address Label Do I use?

If there is a PAYMENT DUE for one or both of the taxpayers, then use the PAYMENT ENCLOSED label.

If there is NO PAYMENT enclosed with your return AND there is a REFUND OR CREDIT DUE for one or both of the taxpayers, then

use the REFUND OR CREDIT DUE label.

If there is NO PAYMENT and NO REFUND OR CREDIT for both of the taxpayers, then use the NO PAYMENT/NO REFUND label.

Local Earned Income Tax Return Form - School District Of Cheltenham Township

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