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American Payroll Association (APA) Basic Guide to Payroll, 2013 Edition
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CCH® PAYROLL — 8/10/11

Pennsylvania develops PSD codes, issues local residency form

Due to changes in Pennsylvania's Earned Income Tax legislation under Act 32 of 2008, Political Subdivision (PSD) codes have been formulated to designate each of the 69 tax collection districts, along with the school districts and municipalities therein. Act 32 of 2008 requires that employers and tax officers use PSD codes prescribed by the Department of Community and Economic Development (DCED). PSD codes have been designed to identify the municipalities and school districts for each tax collection district and aid in ensuring that employee Earned Income Tax withholding is remitted and distributed to the proper taxing authority. The legislation requires all taxing authorities that implement an Earned Income Tax to comply with all applicable regulations by January 1, 2012. Tax Collection Districts may opt for early implementation by January 1, 2011. More information regarding Act 32 of 2008 is at: http://www.newpa.com/get-local-gov-support/tax-information/dceds-act-32-eit-collection-system. For questions, please contact us at 1-888-2-CENTER. The PSDs will reproduced in the CCH PAYROLL MANAGEMENT GUIDE New Development Division at ¶9619.

The Department of Community and Economic Development (DCED) has also developed the Local Earned Income Tax Residency Certification Form to be used by employees and new hires. Previously, the DCED released a timetable for implementation of the law. Both are reproduced in the CCH PAYROLL MANAGEMENT GUIDE New Developments Division at ¶9543.

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