Dear Employer,
The City of Philadelphia requires businesses to give notifications to their employees about the two programs listed below. This notification can be an electronic or printed copy, and needs to happen no later than February 1, 2021.
The Federal Earned Income Tax Credit (EITC)
The City of Philadelphia wants every Philadelphian who is eligible to receive the federal Earned Income Tax Credit (EITC). This federal credit is for low-to moderate-income individuals and families. They can get EITC by filing a federal tax return. With an average benefit of $2,500 per tax return, EITC provides hard-working Americans with a needed financial boost every year. Despite this, thousands of Philadelphia residents are not claiming EITC, resulting in millions of dollars being left out of our local economy. After a particularly difficult year for workers and businesses, we are once again counting on your cooperation.
How should your business promote EITC?
The City provides a notice that explains how employees can claim EITC –online and FREE– by visiting www.myfreetaxes.com. The City requires you to give workers this notice at the same time you provide them with W-2, 1099, or comparable forms. You can do this electronically, or give them a printed copy.
The City of Philadelphia Income-based Wage Tax Refund Program
The City also reduces the rate on Wage and Net Profit Taxes to 1.5% for taxpayers who are eligible and complete Pennsylvania Special Tax Forgiveness ("Schedule SP") of the Pennsylvania Personal Income Tax Return. Eligible Philadelphia Wage taxpayers may request a refund from the Philadelphia Department of Revenue by submitting an Income-based Wage Tax Petition.
What does our business have to do to promote the Income-based Wage Tax refund?
Employers may not reduce their employees' Wage Tax withholding. We ask employers to send employees who receive a W-2, and earned less than $100,000, an Income-based Wage Tax Petition. Eligible employees that file a petition can receive a refund of Wage Tax paid in excess of 1.5% for the previous year.
Income-based Wage Tax Petitions for 2020 will soon be available on our website. You can download and print the document, or share this webpage with your employees:
For questions, please email [email protected] or call us at (215) 686-6600. Please do not respond to this email as this email box is not monitored.
For translation services please call (215) 686-6600.
