Overview

1. Luzerne Tax Collection District (TCD)andDon Wilkinson Agency, Inc. (DWA)a wholly owned subsidiary ofCentral Tax Bureau of Pennsylvania, Inc. (CENTAX)

2. Overview • What is Act 32? • What is a Tax Collection District? • What does Act 32 mean for employers and employees • Requirements for employers under Act 32 • Multi-site employers • Exceptions to Act 32 • What happens if an employer doesn’t comply? • What can we do? • Certificate of Residency • Political Subdivision (PSD) Codes • Transition resource aids for Act 32 compliance

3. What is Act 32? • Act 32 of 2008 amends Act 511 of 1965 and provides for consolidation of local earned income tax (EIT) collection. • Signed into law July 2, 2008. • Becomes fully effective January 1, 2012 for 2012 Tax Year (2011 EIT collected through current collector). • Every county, except Philadelphia and Allegheny counties, selects one collector to collect EIT. • Sixty-nine TCDs, each governed by a Tax Collection Committee (TCC). • Total EIT collectors reduced to 18 from more than 500

4. Which is which?Luzerne County or Luzerne “County” TCD orLuzerne TCD Luzerne TCD Luzerne County “Under Act 32, the earned income tax collection process has been restructured creating county-wide tax collection districts (TCDs). These new districts have boundaries that are congruent geographically with current county lines, unless there is a school district that overlaps county boundaries. If a school district crosses a county line, the school district and its component municipalities have been kept whole and are included in the county where the affected municipalities have the greatest population.” (Pennsylvania Department of Community and Economic Development, http://www.newpa.com/webfm_send/1854, FAQ #1.)

5. What does Act 32 Mean for Employers? • Universal withholding for EIT • Employees  Employer  Tax Officer • Employer registration with Tax Officer • Remit to Tax Officer where Employer work site is located. • Certificate of Residence

6. What does ACT 32 Mean for Your Employees? • Employers required to withhold at the correct tax rate. • Resident and Non-Resident. • Reduce balance due at tax time due to low or no withholding. • Certificate of Residency – Simplified Means to change Employee Withholding rate and update business records. • More Information for the Employee

7. Requirements for Employers under ACT 32 • More Detail from Employers • Quarterly and Annual Returns due 30 days after End of Calendar Quarter • April 30, July 31, September 30, and December 31 • Employers Must Supply Tax Officer With the Following: • Employee name, address and Social Security Number • Compensation during prior 3 months • Tax Amount Deducted from employee • Identify all Municipalities and School Districts that impose resident or non-resident tax on employee. • PSD Code

8. Requirements for Employers under ACT 32 • Single work site within the TCD or all work sites within same TCD. • File and Remit Taxes Quarterly • Rules and Regulations specify when e-reporting is mandatory (large employers). • Multiple work sites – in more than one TCD. • Employer may file with and remit taxes for all employees in all locations to one TCD tax officer provided the following: • Return is field and taxes remitted electronically on a monthly basis. • Notice of Intention to File.

9. Multi-Site Employers Two Options: • Payroll Operations • Remit to TCD tax officer where employer payroll operations are located • “Wal-Mart Option” • Employers with multiple work sites may designate one TCD tax officer to receive all withholding remittance. • Employers may make arrangements with one TCD tax officer , with permission from DCED, for administration of employer’s entire workforce withholding processing

10. Exceptions to ACT 32 • 1) Philadelphia Residents • DWA DOES NOT ACCEPT • 2) Special Levies – Additional Taxes Due - Distressed Areas • Act 205 • Act 47

11. What Happens if an Employer Doesn’t Comply? • If Checks and Forms Do Not Comply with Filing Requirements they Will Be Returned. • Subject to Audit • Fines and Penalties • Employers Can Be Required File Monthly

12. What Can We Do? • Resident and Non-Resident Withholding: Every employer must use the Pennsylvania Department of Community and Economic Development (DCED) official tax register to determine the applicable tax rate of every employee and list the proper jurisdictional code for each employee’s residence and employment location. • Tax Register Website: • http://munstatspa.dced.state.pa.us/ • PSD Code

13. Certificate of Residency Employee name, Social Security number, address, Zip Code Important! Please inform employee to know difference, if applicable, between address and municipality Employer Information Employer Certification

14. Certificate of Residency • Companion to w4 • One per Employee • Keep in Employee Personnel File – Do not Send to Tax Officer • Download at: • http://www.newpa.com/webfm_send/1605

15. PSD Codes – Key to Compliance • What is it? • Political Subdivision Code • Unique Identifier – Encompasses Municipality and School District. • Where can I find it? • DCED Tax Register http://munstatspa.dced.state.pa.us/ • Employees can Type in their Addresses to find PSD Code. : http://www.newpa.com/get-local-gov-support/municipal-statistics

16. PSD Codes

17. DWA Resources for a Smooth Transition • Electronic Processing • Employers with more than 50 employees must submit electronically. • CD • Employer Section of CENTAX Website http://www.centaxgroup.com • CENTAX/DWA Employer Section • Business Portal • Forms Download • Payment

18. Questions? Roger Heydt, Client Services Manager 300A Laird Street Wilkes-Barre, PA 18702 Phone: 570-822-0555 Toll Free: 800-268-2681 Fax: 570-822-4950 rheydt@centaxgroup.com • Contact Information