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Daily Update from Wouch Maloney - CPA in Horsham & Philadelphia

Philadelphia Wage Tax Refund Request Form for 2020

If your employer asked you to work from home in 2020, instead of physically working at their location within the Philadelphia city limits, you may be eligible for a tax refund if your employer withheld the Philadelphia wage tax from your pay.

Eligibility Requirements

Under the City of Philadelphia “requirement of employment” standard, a non-resident employee is not subjected to the Philadelphia wage tax when a Philadelphia employer asks the non-resident employee to work from home.  Keep in mind that a non-resident employee who works from home for their convenience is not exempt from the Philadelphia wage tax. 

Philadelphia Wage Tax

The current Philadelphia wage tax is 3.8712% for residents of Philadelphia, and 3.5019% for non-residents.

How to Request a Refund

As of January 8, 2021, the City of Philadelphia has not updated their portal with a Wage Tax Refund Petition Form for 2020. The City announced it expects to post the form during the first week of February on the Income-based Wage Tax refund petition webpage.

Philadelphia employers are required to give an income-based wage tax refund petition to employees at the same time they provide employee W-2s or other similar forms.  Employees may also download a copy of the form online.

Employees filing for the refund need to include a copy of the W-2 form, and a letter with employer’s letterhead and signature supporting all the days or times the employee was working outside of the City of Philadelphia.

As always if you need assistance or have questions about the Philadelphia wage tax refund or any other questions regarding your accounting and tax needs, please contact us at any time.

DISCLAIMER: The WM Daily Update COVID-19, COVID-19 Business Resources and COVID-19 Client News Alerts and other related communications are intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.

Article updated January 27, 2021.