Form 531 - Local Earned Income And Net Profits Tax Return

GENERAL INFORMATION FOR FILING FORM 531, LOCAL EARNED INCOME AND NET PROFITS TAX RETURN

FILING DEADLINE – April 17

of the succeeding year for which this return is filed. Or, for fiscal year returns, the 15

day of the 4

month following the close of the taxable

year. If the normal filing due date falls on a Saturday, Sunday, or legal holiday, the due date for filing will be extended to the next business day.

LATE FILING FEE – (Line 19) A $10.00 late filing fee is charged to each taxpayer who files a return, or whose return is incomplete, after the April 17 deadline. This fee is

assessed even if all tax has been withheld by your employer, and is in addition to any other interest and penalty charges and costs that have accrued. This fee will be waived if

you have filed for an extension as outlined below. The fee increases to $20.00 if the return is filed, or is still incomplete, after December 31 of the year that the tax return was

due.

EXTENSION OF TIME TO FILE – A federal and/or state granted extension to file does not automatically give you an extension to file your local tax return. To receive a 6

month extension of time to file, you must submit to our bureau a copy of Federal Form 4868 by the original due date of the return. To avoid interest and penalty charges, you

still must pay all tax due by the original due date of the return. By filing an extension, you will not be assessed a late filing fee if the return is filed within the extension period

and no tax, interest, or penalties are due on the extended return.

WHO MUST FILE – Any resident of a “MEMBER MUNICIPALITY” whether for all or part of the tax year, who has earnings and/or net profits and/or net losses even if no

tax is due and regardless of where you work. See the back of the return for a list of the “MEMBER MUNICIPALITIES.” Failure to file a return may subject you to a $500 fine.

Tuscarora School District residents are not subject to the tax until they turn 18 and must file a return providing birth date to obtain a refund of tax withheld prior to turning 18.

IF YOU HAD NO EARNINGS, NET PROFITS, OR LOSSES TO REPORT… enter zero (0) on Line 10 and list reason (e.g. retired, disability, housewife, did not work

THIS year, etc.) Sign the form and return it to us. This will eliminate needless correspondence.

WHERE TO FILE – File your return at the bureau and address listed at the upper left corner on the front of your return.

ROUNDING OFF TO WHOLE DOLLARS – You may round off cents to the nearest whole dollar only for Line entries 1 thru 10 on your return. Entries for Lines 12 thru 25

on the return must be entered in dollars and cents. If rounding, drop amounts under 50 cents and increase amounts from 50 to 99 cents to the next dollar. For example, $1.39

becomes $1.00 and $2.50 becomes $3.00. If you do round off, do so for all the line entries where rounding is allowed (Lines 1 thru 10). However, if you have to add two or

more amounts to figure the amount to enter on a line, include cents when adding the amounts and only round off the total. Example: You receive two W-2 forms, one showing

wages of $5,000.55 and one showing wages of $18,500.73. On form 531 Line 1, you would enter $23,501. ($5,000.55 + $18,500.73 = $23,501.28) instead of $23,502. ($5,001.

+ 18,501.).

EFFECTIVE DATES FOR THIS TAX – This return covers the taxable period from January 1 thru December 31 of the year listed on the return, or any fiscal tax year so

designated by the taxpayer.

TAXABLE INCOME ITEMS – Wages, salaries, commissions, bonuses, work related rewards and prizes, tips, fees, net profits, severance pay, premature retirement or other

deferred payment plan distributions for reasons other than death or disability not rolled over into another federally qualified retirement plan to the extent they were taxable for

PA State Income Tax purposes (see more detailed explanation of this item below), employee contributions to 401(k), 403(b), 457 and other types of deferred payment programs,

taxes assumed by the employer, incentive payments, fellowships (when compensation for services), inactive military service (e.g. reserves) pay and bonuses. Internal Revenue

Code Section 125 (Cafeteria Plan or Flexible Spending Plan) benefits taxable for PA State Income Tax are also taxable for PA Local Income Tax purposes. An example would

be “Dependent Care Benefits.”

TAXABLE RETIREMENT/SAVING PLAN DISTRIBUTIONS – This bureau follows the PA Department of Revenue’s Personal Income Tax Regulations regarding the

taxability of distributions from employee deferred payment programs such as pensions (retirement plans), profit sharing, ESOP’s, SEP, 401(k), 403(b) and 457 plans. Under Act

166, the taxable amount of a distribution of this type will now be the same for the local tax as it is for the state tax. A distribution of such a plan can be made up of three

ingredients: 1) the employee’s previously taxed contributions, 2) the employer’s untaxed contributions, and 3) income generated by the plan’s assets. Items 2 and 3 are taxable

for state and local tax purposes. The taxpayer must provide a statement from the plan administrator or trustee of the account showing what portion, if any, of the distribution is

attributable to the employer’s contribution and income (gains) on the plan’s assets. This is the portion that is taxable for earned income tax purposes and must be listed on Line 4

of your return. Without a statement breaking down the distribution, the entire amount of the distribution will be taxed.

NON-TAXABLE ITEMS – Interest, dividends, social security benefits, pensions, annuities, and retirement pay received after retirement from employment and upon reaching a

specific age or years of service or upon death or disability. IRA benefits, disability benefits, third party sick pay, capital gains, death benefits, life insurance proceeds, gifts or

bequests, public assistance, unemployment compensation, income from trusts, active military service pay or bonuses, minister’s housing allowance, personal use of company

property, rental income by individuals not licensed (or conducting a business) as realtors by the Commonwealth of Pennsylvania, Subchapter S pass-thru income (unless

taxpayer is not receiving fair compensation for services rendered to the corporation), passive limited partnership income. Internal Revenue Code (IRC) Section 125 benefits not

taxed for PA State Income Tax are also excluded from PA Local Income Tax. For taxpayers engaged in farming, local net profits do not include interest earned on the monetary

accounts of the farming business and gains from the sale of farm machinery, most livestock, and the capital assets of the farm.

ORDER OF ATTACHING W-2’S AND FORMS/SCHEDULES TO RETURN – If you have a stapler available, place all W-2’s and forms/schedules behind the return

facing front. Edge all attachments to the upper, left hand corner of the form and place a single staple there. The order of the attachments from first to last behind the return

should be as follows: 1) Your W-2(s); 2) Spouse’s W-2(s) (if filing on this form); 3) Your PA UE, 2106 (if used to document PA UE), PA State Schedule(s) C, F, RK-1; and 4)

Your spouse’s PA UE, 2106 (if used to document PA UE), PA State Schedule(s) C, F, RK-1 (if filing on this form). Finally, attach Schedule X (if applicable) and any other

worksheets or documentation that explains how you derived at the figures on the tax return. Checks should be attached to the front of the return with a single staple.

BE SURE TO SIGN THE TAX BUREAU’S COPY OF YOUR RETURN… on its lower left hand side. If both spouses are filing on a single form, both spouses must sign

the return. Any filing received without the proper signature(s) will not be considered filed.

IF YOU MOVED… from the beginning of the tax year to present, please supply the information requested on the reverse side of the TAX BUREAU’S COPY of your return

(Sections A and C). If you have lived in different municipalities, falling under different tax bureau jurisdictions during the year, you MUST prorate your earnings and

withholdings accordingly and file with the appropriate tax bureaus. ATTACH A COPY OF THE OTHER TAX BUREAU RETURN when you file this return.

IF YOU RECEIVED MORE THAN ONE TAX RETURN… please return both tax returns to us. We apparently have two different social security numbers for you. Usually

the two numbers have just one digit that is different. Complete the form that has the correct social security number and mark and return the other form “DUPLICATE OF

SOCIAL SECURITY NUMBER _____________________” (enter correct social security number). Doing so will avoid needless correspondence.

IF YOU ARE SELF-EMPLOYED OR YOUR EMPLOYER DOES NOT WITHHOLD YOUR FULL TAX LIABILITY, YOU ARE REQUIRED TO PAY YOUR NON-

WITHHELD TAX ON A QUARTERLY BASIS USING FORM 521. If you do not receive this form by April 1st, please request it from our bureau; or you may obtain one

from our website, . Failure to comply will result in an interest and penalty assessment.

LOCAL FILING COMPARED TO PA PERSONAL INCOME TAX RETURN – This bureau participates in a program with the Pennsylvania Department of Revenue to

match earned income (compensation) and net profit/loss as reported on the local return against the same items reported on the state return. If, by audit, tax items are changed by

either the IRS or State Department of Revenue that have a bearing on your local tax return, you must file an amended local return to reflect such changes. If you have

Subchapter S corporation income, file a copy of any Subchapter S RK-1 that was reportable as a profit or loss for state tax purposes. Whereas Subchapter S income/loss does not

typically apply to local tax, this information will prevent us from sending you a “discrepancy” letter when your local and state income does not match due to this tax item.

Form 531 - Local Earned Income And Net Profits Tax Return - 2011 Page 4

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