Friday, November 11, 2011

PA Act 32 / EIT local earned income tax

Effecting international students and scholars who work on the Pittsburgh campus of Carnegie Mellon

Pennsylvania has enacted a new law, PA Act 32 which becomes effective on January 1, 2012.  This law restructures how local governments and school districts collect local income tax in Pennsylvania. PA ACT 32 requires Carnegie Mellon to collect Earned Income Tax (EIT) on behalf of its employees, including student employees,  for the local municipality in which they live or work beginning January 2012.

Students who are employed at Carnegie Mellon in Pennsylvania are required to take action to ensure that the amount of tax withheld is correct and that the tax is disbursed correctly according to the tax residency address.  Failure to complete key actions may result in local earned income taxes being withheld inaccurately. The recourse for students who complete the requirements late or after employment has begun will be to file for a refund during the annual tax filing cycle (in April of the following year, for most people).  Students and scholars who work on campus in Pittsburgh are strongly encouraged to take action per the instructions in the email received from HRIT@andrew.cmu.edu.  Take action as soon as possible after beginning employment at Carnegie Mellon to ensure that local taxes are properly withheld from your paycheck. 

You may wish to reference the complete list of Frequently Asked Questions (FAQs).  Determining the tax residency address can be confusing for students due to the varied nature of student permanent addresses, foreign residency status, definition of tax residency, etc.  The FAQs are meant to address the various questions student employees may have related to PA Act 32. 

NOTE:  While international students may be residents or non-residents for federal and state tax purposes, depending upon their individual circumstances, ALL non-immigrants (students and scholars on a visa) are non-residents for City of Pittsburgh tax purposes.