Form Rev-20 As - Employer Withholding For Pennsylvania Taxable Compensation Guide - Directions For Completing Federal Form W-2 Block 16 Page 2
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12This booklet contains information that will help you determine what income items must
be reported in Block 16 (state wages, tips, etc.) of your employees’ W-2 Wage and
Tax Statement. It also contains instructions to help you determine which reportable
income items are subject to Pennsylvania Personal Income Tax withholding.
Pennsylvania Personal Income Tax rules vary from federal income tax rules in many
ways. This booklet assumes that:
•
You have already correctly determined the employment status under federal
income tax rules of each employee and non-employee with federally taxable
wages.
•
You have already correctly computed the amount of each employee’s Block 1
(federal wages, tips, etc.) but do not know Pennsylvania Personal Income Tax
rules.
•
Your employee is not a statutory employee or statutory non-employee for
federal income tax purposes.
•
Your employee is not a post-doctoral research fellow.
The booklet lists each adjustment to the amount of an employee’s Block 1 (federal
wages, tips, etc.) that is necessary to compute the correct amount of the employee’s
Block 16 (state wages, tips, etc.) subject to Pennsylvania Personal Income Tax.
Part I lists the items that are taxable for Pennsylvania purposes but not for federal
purposes. The amount of these items must be added to the federal income
amount. Part II lists the items that are not taxable for Pennsylvania purposes, but
are taxable for federal purposes. The amount of these items must be subtracted
from the federal income amount you computed.
Many amounts, of course, are taxable for both Pennsylvania and federal purposes.
If you have correctly computed the employee’s federal wages, tips, etc., no adjust-
ment for these items will be necessary.
This booklet does not contain instructions covering information returns corresponding
to federal Form 1099R or Form 1099-MISC. It also does not contain information
concerning non-payroll items such as pensions, annuities, or other payments from
any trust described in IRC §401(a) which is exempt from tax under IRC §501(a) at
the time of such payment (unless such payment is made to an employee of the trust
as remuneration for services rendered as such employee and not as a beneficiary
of the trust) and IRAs, military retirement, gambling winnings, and items subject to
federal backup withholding such as interest, dividends, rents, royalties, commis-
sions, and non-employee compensation. The booklet also does not identify which
expenses may be deducted on PA Schedule UE. For more information on these
matters, consult the PA PIT Guide available through the Department’s Web site
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