“Philadelphia's 2020 Wage Tax Refund Process: Employer, Employee Considerations”

Article by Jennifer Karpchuk on “Philadelphia's 2020 Wage Tax Refund Process: Employer, Employee Considerations”

In an article published on March 2, 2021 in The Legal Intelligencer, Shareholder Jennifer Karpchuk explains that for the first time, the City of Philadelphia Department of Revenue is allowing employers to file a bulk return on behalf of their employees for 2020 wage tax refunds and creating a streamlined application for employees to file online.

Karpchuk further explains that Philadelphia maintains a “requirement of employment” test to determine whether a nonresident employee is subject to the wage tax for time worked outside of the city. That said, “if a nonresident employee works outside of the city for the employee’s convenience, that individual is still subject to the wage tax,” says Karpchuk. “If a nonresident employee is working outside of Philadelphia as required by his employer, that individual is not subject to the wage tax for the time spent outside the city.”

Due to the pandemic, many companies were shuttered, and they required employees to work from home in larger numbers than ever before. The department applied its longstanding rule to the COVID-19 crisis—those individuals forced to work from home by their employer because of the pandemic were not subject to the city’s wage tax. Therefore, an unprecedented number of nonresident employees are entitled to refunds for tax year 2020.

To learn more about Philadelphia’s wage tax refund process, subscribers may view the full article here.