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evenue
www.revenue.state.pa.us

REV-415 AS (06-03) Revised June 2003

 TABLE OF CONTENTS Page
Employee Withholding Requirements . . . . . . . . . . . . . . . . . . . . .1
How to Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Federal Employer Identification Number (FEIN) . . . . . . . . . . . . .1
Withholding Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Exclusions from Compensation . . . . . . . . . . . . . . . . . . . . . . .3
Taxable Compensation Not Subject to Withholding . . . . . . . .4
Employee Fringe Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Nontaxable Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Taxable Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Employer Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Business Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Withholding Instructions for Employees . . . . . . . . . . . . . . . . . .10
Instructions for Resident Employees . . . . . . . . . . . . . . . . . .10
Instructions for Nonresident Employees . . . . . . . . . . . . . . . .10
Reciprocal Agreements . . . . . . . . . . . . . . . . . . . . . . . . .11
Non-withholding Provisions . . . . . . . . . . . . . . . . . . . . . .11
Computation of Withholding Tax . . . . . . . . . . . . . . . . . .12
Payment of Taxes Withheld . . . . . . . . . . . . . . . . . . . . . . . . .12
Payments Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Reconciliation Returns (W-3) . . . . . . . . . . . . . . . . . . . . .13
Interest and Penalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Electronic Filing: e-TIDES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Electronic Funds Transfer (EFT) . . . . . . . . . . . . . . . . . . . . . . . .15
Overpayments and Refunds . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Amended Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Withholding Statements (W-2) . . . . . . . . . . . . . . . . . . . . . . . . . .17
Magnetic Media Reporting . . . . . . . . . . . . . . . . . . . . . . . . . .18
General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
Commonly Asked Questions Brochures . . . . . . . . . . . . . . . . . .20
Revenue District Offices . . . . . . . . . . . . . . . . . .Inside Back Cover

CUSTOMER SERVICES & TAXPAYER ASSISTANCE

General Information
Taxpayer Service and Information Center . . . . . .(717) 787-1064
Employer Withholding General Information . . . . . .(717) 787-1064
FACT & Information Line . . . . . . . . . .1-888-PATAXES (728-2937)
Internet . . . . . . . . . . . . . . . . . . . . . . . . .www.revenue.state.pa.us
Online Customer Service Center . . . . . .www.revenue.state.pa.us
Service for Taxpayers with Special Hearing
and/or Speaking Needs . . . . . . . . . . . .(TT Only) 1-800-447-3020

Electronic Filing
Information Line . . . . . . . . . . . . . . . . . . . . . . . . . .1-800-892-9816

Forms Ordering
24-hour Forms Ordering Message Service . . . . .1-800-362-2050
Taxpayers may also request tax forms and specific reference
brochures listed in this handbook on page 20 by writing:
PA Department of Revenue
Tax Forms Service Unit
711 Gibson Blvd.
Harrisburg, PA 17104-3200

Rulings and Regulations . . . . . . . . . . . . . . . . . .www.pacode.com

Employer Withholding Requirements
Pennsylvania law requires the withholding of Pennsylvania
Personal Income Tax from compensation of resident employees
for services performed either within or outside Pennsylvania, and
from wages of nonresident employees for services performed
within Pennsylvania. Every employer paying compensation sub-
ject to withholding must withhold Pennsylvania Personal Income
Tax from each payment of taxable compensation to his employees.
This booklet is designed to help employers recognize and fulfill
these requirements.

Questions may be directed to the PA Department of Revenue by

calling (717) 787-1064, writing to: PA Department of Revenue,
Dept. 280904, Harrisburg, PA 17128-0904, or visiting any of the
PA Department of Revenue district offices listed on the inside
back cover of this booklet. Taxpayers with Special Hearing and/or
Speaking Needs may call 1-800-447-3020 (TT only).

Definition of Employer
An employer is any individual, partnership, association, corpora-
tion, government body or other entity that employs one or more
persons for compensation, who is required under the Internal
Revenue Code, to withhold Federal Income Tax from wages paid
to an employee.

How to Register
Register for Employer Withholding Tax online through the PA
Open for Business Web site. Selecting the online version of the
PA-100 Enterprise Registration form allows business owners to
register to withhold employer taxes with the Department of
Revenue and open Unemployment Compensation accounts
administered by the Department of Labor and Industry. The
online PA-100 is for the most common types of registration, and
can be accessed through the PA Open for Business Web site at
www.paopen4business.state.pa.us.

To obtain a paper PA-100 form, call the 24-hour Forms Ordering

Message Service at 1-800-362-2050, or download the form from
the Department’s Web site at www.revenue.state.pa.us.

Employer Account Number

The PA Department of Revenue will issue an 8-digit Account
ID Number to file and pay Employer Withholding Tax. Please
reference this number when paying or corresponding with the
Department regarding your employer tax account.

Federal Employer Identification Number (FEIN)

New employers, who have a Federal Employer Identification
Number (FEIN), are required to provide the Department with this
number. New employers who have not yet received a FEIN will
be assigned a temporary Entity ID Number until the EIN is
obtained, at which time the PA Department of Revenue must be

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 notified. Direct questions relating to identification numbers to the
PA Department of Revenue, Dept. 280901, Harrisburg, PA
17128-0901, or telephone our Taxpayer Service and Information
Center at (717) 787-1064.

Withholding Documents
Each employer registered with the PA Department of Revenue
will receive a coupon book containing deposit statements and
quarterly reconciliation documents. Coupons are preprinted with
employer identification data, period ending dates and payment or
filing due dates. A sufficient number of documents are included to
fulfill the employer’s yearly payment and reporting requirements.
The book also includes other coupons:

• Account Cancellation Form (REV-1706);

• W-2 Transmittal Form (REV-1667); and

• Change/Correction Form (REV-1705).

Report corrections or changes to the identification data to the

PA Department of Revenue on the Change/Correction Form
(REV-1705). If changes are requested on the employer’s name,
EIN number or payment frequency, a new employer coupon book
will be provided with the updated information. Upon receipt of
a new coupon book, the employer should destroy the old book
and use the new coupons to avoid posting errors. Address
changes do not result in the production of a new coupon book,
but Department records will be updated for proper mailing of
future correspondence.

Employer Withholding coupon books will be mailed each Decem-

ber for semi-monthly and monthly filers, and each February for
quarterly filers.

COMPENSATION
Compensation means remuneration received for services
whether directly or through an agent and whether paid in cash
or in property. Compensation includes salaries, wages, tips,
gratuities, commissions, bonuses, incentive payments, vacation
or holiday pay, termination or severance pay, sick leave pay
(unless excludable), reimbursements and allowances in excess
of allowable business expenses and payments realized in the
form of property or a discharge of indebtedness, unless specifi-
cally excludable from compensation. Compensation paid in any
medium other than cash is valued at fair market value.

Additional information regarding Pennsylvania compensation can

be obtained by requesting the Employer Withholding for Penn-
sylvania Taxable Compensation Guide (REV-20) booklet. See
page 20 for ordering information.

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Exclusions from Compensation
Certain payments are not compensation, such as:
1. Payments made under workers’ compensation acts, occu-
pational disease acts, or similar legislation for injuries
received while working and damages (whether by suit or
otherwise) for personal injuries or sickness.

2. Group term insurance policies purchased for employees, so

long as the employer’s program is not discriminatory. Unlike
the Internal Revenue Code, Pennsylvania’s statute does not
have a threshold ($50,000) above which life insurance
coverage becomes taxable.

3. Prizes and awards, unless the winner is required to render

any substantial services as a condition to receiving the prize
or award.

4. Scholarships.

5. Fellowships and stipends which are deemed nontaxable.

Fellowship awards made on the basis of need or academic
achievement for the purpose of encouraging or allowing the
recipient to further his/her educational development, and not
as compensation for past or present employment or in
expectation of future employment services, are not taxable.

Fellowship awards and stipends constitute compensation

for services if the recipient is required to apply his skill and
training to advance research, creative work, or some other
project or activity, unless the recipient can show that:

• The benefits resulting from the services of the recipient

are so minimal, given the actual services performed or
expected to be performed, that they constitute no realistic
basis for compensation; or

• The activities of the recipient are so closely and directly

supervised and immediately controlled by regular faculty
members so as to constitute a burden on the institution
which would offset any benefit it receives from the recip-
ient's activities; or

• The recipient is a candidate for a degree, and the same

activities are required of all candidates for that degree as
a condition to receiving such degree.

Stipends paid to medical interns and residents pursuant to

an internship or residency program that conforms with the
Essentials of an Approved Internship or the Essentials
of an Approved Residency as established by the American
Medical Association are taxable.

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 For additional information order Scholarships, Fellowships,
and Stipends (REV-614). See page 20 for ordering information.

6. An employee’s personal use of employer-provided property

or of employer-provided services. See Employee Fringe
Benefits and Welfare Benefit Programs (page 5).

TAXABLE COMPENSATION NOT

SUBJECT TO WITHHOLDING
Withholding of PA tax is not required for remuneration paid to:

1. Agricultural workers whose remuneration is not subject to

Federal Social Security Tax (FICA) withholding.

2. Duly ordained, commissioned, or licensed ministers of a

church in the exercise of their ministry, or by members of a
religious order in the exercise of their ministry, or by mem-
bers of a religious order in the exercise of duties required by
such order.

3. Domestic servants in a private home, local college club, or

local chapter of a college fraternity or sorority.

For additional information order Hiring Household Workers

(REV-617). See page 20 for ordering information.

4. Casual employees for services performed that are not in the

normal course of the employer’s trade or business. (Federal
limitations less than $50 and at least 24 days on the job per
quarter will apply.)

5. Employees of foreign governments or international organi-

zations who are citizens or residents of the United States.

6. Nonresident alien employees who are tax residents of

Pennsylvania, but who perform services outside the United
States.

7. Newspaper carriers and news vendors under age 18.

8. Seamen engaged in interstate or international trade, and

individuals engaged in interstate transportation activities
such as railroad crews, airplane crews, or truck or bus
drivers, to the extent that their pay is exempt from withhold-
ing under federal law.

Miscellaneous Provisions
Payments received as consideration for terminating employment
before reaching normal retirement age, or refraining from the per-
formance of such services, also constitute taxable compensation.
Such payments are subject to withholding if the payor is an
employer required to withhold Federal Income Tax from the wages
or compensation paid to the employee during the taxable year.

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 EMPLOYEE FRINGE BENEFITS
AND WELFARE BENEFIT
PROGRAMS
Employee fringe benefit programs, such as pension, profit-sharing
and stock bonus plans, and Simplified Employee Plans, are
established by employers to provide additional compensation to
participating employees upon or after separation from service,
upon the completion of a fixed period of participation, the lapse of
a fixed number of years, or upon a showing of financial hardship.

Employee welfare benefit programs are established by employers

to provide welfare benefits to employees (or their beneficiaries),
such as child care facilities, life, accident or health insurance cov-
erage, legal services, medical benefits, supplemental unemploy-
ment compensation (SUB), tuition reductions, disability benefits,
strike benefits, and dismissal pay.

Nontaxable Benefits
Generally, payments made by employers for benefit plans that
provide medical, dental, or vision care for their employees are not
considered taxable compensation for Pennsylvania purposes.
Further, strike benefits, supplemental unemployment compensa-
tion benefits, and most life insurance premium payments should
not be included in compensation. Other payments that are not
subject to withholding are:

• Amounts received for the permanent loss or loss of use of a

part or function of the body, or permanent disfigurement.

• Amounts that are computed with reference to the nature of

a sickness or injury and without regard to the period the
employee is absent from work.

• Amounts (other than regular wages or sick leave pay),

which are computed with regard to the period that the
employee is absent from work due to sickness or disability.

• Amounts paid to the beneficiaries or the estate of an

employee who has died.

Since January 1, 1998, the personal use of an employer’s prop-

erty (leased or owned), or a service provided by the employer, is
not considered taxable compensation. Nontaxable items include
the personal use of a company car, accounting services, or child-
care provided – not reimbursed – by the employer.

Generally, an employer provides a service or property when the

company assumes the financial responsibility for the liability
or payment. In other words, the expense is billed to the company,
and the company is responsible for the payments. For example,
a company seeking to provide transportation as a nontaxable
benefit for their employees could use a company van to transport

5
 them. The benefit becomes taxable when the company reimburs-
es their employees for bus fare to commute, or provides a trans-
portation allowance.

Finally, federally excludable no-additional cost services, qualified

employee discounts, working condition fringe benefits, or quali-
fied transportation fringe benefits, are not considered taxable so
long as the employee does not have the choice between cash
and the benefit, or the employee does not reduce his/her salary
in order to receive the benefit. For example, a program under
which an employee is furnished with parking facilities, use of
company grounds, picnic areas, or a workout facility, and the
employee neither reduces his salary or is reimbursed by the
employer for the benefit is not compensation, and thus, is not
subject to withholding.

Taxable Benefits
Non-cash benefits, which are reportable as compensation under
IRS rules, are generally taxable for PA Personal Income Tax pur-
poses and are therefore subject to withholding. Taxable benefits
include, but are not limited to:

• Payments made by the employer to help employees with

adoption expenses.

• Payments made by the employer to help employees with

additional medical or dental expenses not covered by medical
insurance, unless allowable as an ordinary, reasonable, and
necessary business expense. Medical expenses paid under
a qualifying self-insured medical reimbursement account
such as a Medical Savings Account, are not taxable.

• Life insurance payments made by the employer on employ-

ees’ dependents.

• Amounts paid by the employer for non-job related education-

al assistance provided to the employees or their dependents.

• Amounts paid to employees in lieu of using vacation days.

• Payments made by employers into pension plans, 401(k)

plans or other retirement plans, pursuant to the employee’s
election or by salary reduction agreement, or through peri-
odic payroll deductions, are taxable to employees and
should be included in PA gross wages on their W-2 forms.

For additional information order Employee Fringe Benefits and

Wage/Salary Supplements (REV-634). See page 20 for ordering
information.

6
Employer Contributions
Contributions by an employer to employee deferred payment pro-
grams and welfare benefit programs on behalf of such employees
generally are excludable from the employee’s income to the
extent the contributions constitute reasonable compensation for
services and are not subject to withholding. Pennsylvania tax law
makes no distinction between stockholder-employees or officers
and other employees.

Pennsylvania tax law concerning Simplified Employee Plans (SEP)

differs from federal law. For Pennsylvania Income Tax purposes,
employer contributions to a SEP are excludable from the com-
pensation of an employee and are not subject to withholding. For
Federal Income Tax purposes, an employer contribution to a SEP
must be included in gross income and then deducted by the
employee.

BUSINESS EXPENSES

Reimbursement for Expenses

All reimbursements and allowances paid to employees are
compensation unless:
1. The expenses which you reimburse are allowable busi-
ness expenses; and

2. Your employees are required to, and do, account for

these expenses to you; and

3. You reimbursed your employee in the exact amount of

the allowable business expense.

A fixed mileage allowance or a per diem living expense allowance

that does not exceed applicable federal limits, also is not reportable
compensation, and therefore, is not subject to withholding.

Allowable Business Expenses

To be an allowable business expense, the expense must be ordi-
nary, actual, reasonable, and necessary. This means the expense
must be:

1. Customary and accepted in the industry or occupation in

which the employee works; and

2. Directly related to the taxpayer’s present occupation, as

opposed to an occupation which he plans to enter in the
future; and

3. Reasonable in amount and not excessive; and

4. Necessary to enable the employee to perform properly

the duties of his employment.

7
 Expense Reimbursements
The following expense reimbursements are compensation subject
to withholding:

1. Personal, living or family expenses.

2. Capital expenditures.

3. Dues to professional or fraternal societies, chambers of

commerce or recreational club memberships.

4. Subscriptions to publications.

5. Political or campaign contributions.

6. Charitable contributions.

7. Commuting expenses.

8. Cost of meals while working late, except while traveling

away from home overnight.

9. Occupational privilege taxes.

10. Educational expenses, except nontaxable scholarships,

fellowships and stipends.

11. Moving expenses, except as allowable on Schedule UE.

12. Childcare and elderly care expenses.

13. Life, disability income and health service insurance

premiums.

14. Malpractice insurance premiums, except where required by

law or employers.

15. Pension contributions.

16. Fines, penalties, legal fees (except to recover back wages)

and bad debts.

17. Bribes, kickbacks or other illegal payments.

18. Expenses to secure employment.

Vouchered Reimbursements
The following vouchered reimbursements are not compensation
and are not subject to withholding:

1. Union dues, assessments, and initiation fees if:

a. Such payments are a condition of a continued member-

ship in the union, and membership is related directly to
the employee’s present job; or

b. Such payments are required to be deducted from regular

wages under an agency shop agreement.

8
2. The cost incurred by an employee to purchase and maintain
uniforms or work clothing to protect the employee from
bodily injury if they are both:

a. Of a type specifically required by the employer as a

condition of employment; and

b. Not adaptable to general usage.

3. Expenditures for required small expendable tools and

supplies not furnished by an employer.

4. Trade, professional, or occupational licenses or fees

required as a condition of employment (including malpractice
insurance and fidelity bond premiums where required by law
or employer).

5. Expenses for travel, meals, and lodging on business trips,

transportation expenses (but not commuting), and business
expenses incurred by outside salesmen.

6. Office or work area expenses if:

a. The duties of employment require a suitable work area;

and

b. A suitable work area is not provided by the employer;

and

c. The work area used constitutes a principal place of work;

and

d. The work area is used regularly and exclusively to perform

the duties of employment.

7. Expenses paid or incurred by an employee for moving them-

selves and their immediate family, household goods, and
personal effects, provided the transfer is in the interest of,
and benefits their present employer, and is from one
permanent duty station to another.

8. Education expenses only if:

a. The education specifically is required by law or by the

employer to retain an established employment status or
rate of compensation; and

b. The education is not part of a program for a new occu-

pation, trade, or business, even if the employee does not
intend to enter that new occupation, trade, or business.
(Education costs voluntarily paid or incurred merely to
maintain or improve skills are not allowable business
expenses.)

9. Business gifts.

9
 WITHHOLDING INSTRUCTIONS
FOR RESIDENT EMPLOYEES
1. When a Pennsylvania resident performs services in Penn-
sylvania, the employer must withhold Pennsylvania Person-
al Income Tax from the employee’s compensation. Where
the employer is subject to Pennsylvania withholding require-
ments and a Pennsylvania resident is rendering services as
their employee wholly in another state, the employer must
withhold on the entire compensation paid to the employee,
unless the other state has an income tax and the employer
is withholding the other state’s tax.

2. When a Pennsylvania resident is performing services partly

within and partly outside the Commonwealth:

• If the other state has an income tax and the employer is

withholding such tax, the employer also shall withhold
the Pennsylvania income tax on compensation for ser-
vices rendered within the Commonwealth. Compensa-
tion attributable to services within the Commonwealth is
that proportion of the total compensation, which the total
number of working days employed within the Common-
wealth bears to the total number of working days
employed both within and outside the Commonwealth,
exclusive of non-working days.

Pennsylvania = # of PA Working Days x Total

Compensation Total # of Working Days Compensation

• If the other state does not have an income tax, the

employer must withhold the PA income tax on the entire
compensation paid to the employee.

3. The Commonwealth imposes tax on earnings of traveling

salespersons or other employees whose compensation
depends directly on the volume of business transacted by
them within the Commonwealth. The amount of compensa-
tion subject to PA withholding is determined by allocating PA
sales volume, by total sales volume, multiplied by the total
compensation.

Pennsylvania = $ Volume in PA x Total

Compensation $ Total Volume Compensation

WITHHOLDING INSTRUCTIONS
FOR NONRESIDENT
EMPLOYEES
1. When nonresidents perform services in Pennsylvania, their
employers shall withhold Pennsylvania tax from their com-
pensation, except when reciprocal agreements apply (see
Reciprocal Agreements on page 11).

10
2. When nonresidents perform services partly within and partly
outside the Commonwealth, only compensation for services
within the Commonwealth is subject to PA withholding. The
method of computation for determining Pennsylvania com-
pensation is identical to those for a resident employee as
detailed on page 10 in Withholding Instructions for Resi-
dent Employees.

Employers must withhold on all compensation paid to nonresi-

dents who work within and outside of Pennsylvania, unless the
employer maintains adequate current records to determine the
accurate amount of compensation from Pennsylvania sources.

The employer may determine the portion of compensation allo-

cable to Pennsylvania on the basis of the preceding year’s expe-
rience, on the basis of an estimate for the preceding year’s
experience, or on the basis of an estimate for the current year
made by the employee or his employer. The employer shall make
any necessary adjustment during the year to assure that the
proper amount is withheld for the current year.

Reciprocal Agreements: The Commonwealth of Pennsylvania

has reciprocal agreements with the states of Indiana, Maryland,
New Jersey, Ohio, Virginia, and West Virginia. These agreements
provide that:

1. If a Pennsylvania resident employee receives compensation

for services performed in one of these six states, the
employer in that state withholds the Pennsylvania Personal
Income Tax from compensation received, and forwards that
tax to Pennsylvania.

2. If a nonresident employee from one of these states receives

compensation for services performed within Pennsylvania,
no withholding of Pennsylvania Personal Income Tax is
required provided an Employee’s Statement of Nonresi-
dence in Pennsylvania and Authorization to Withhold
Other States’ Income Tax (REV-420), is filed by the
nonresident employee with the Pennsylvania employer. The
Pennsylvania employer withholds the income tax of that
state in which the nonresident employee resides and pays
the tax to that state.

For additional information order Reciprocal Agreements

(REV-615). See page 20 for ordering information.

Non-withholding Provisions
Special withholding rules apply to employees who are entitled
to Tax Forgiveness under Pennsylvania law. An employer is not
required to withhold PA tax from the compensation of an
employee, if the employee submits a completed Non-withholding
Application (REV-419). The withholding rate for such an
employee is zero.

11
 If the Pennsylvania taxable gross compensation of an employee,
who has submitted a Non-withholding Application, exceeds $1,625
for any quarter, the employer must promptly forward a copy of the
application to the PA Department of Revenue, Dept. 280904,
Harrisburg, PA 17128-0904 for approval. If the Department
disapproves the application, the employer must commence
immediately withholding at the regular rate.

COMPUTATION AND PAYMENT

OF WITHHOLDING TAXES

Computation of Withholding Tax

The Pennsylvania Personal Income Tax shall be withheld on
compensation subject to withholding at the current applicable
rate. For each payroll period, an employer must compute the tax
to be withheld from an employee’s compensation by multiplying
such compensation subject to withholding by the applicable rate.
The term payroll period means a period for which a payment of
compensation ordinarily is made to an employee by his employer
and may be daily, weekly, bi-weekly, semi-monthly, monthly, quar-
terly, semi-annually, or annually.

If an employee receives supplemental or other compensation, an

employer shall determine the tax to be withheld by adding the
supplemental or other compensation for the current payroll period
and multiplying this amount by the withholding rate.

Payment of Taxes Withheld

Every employer withholding tax must pay the tax required to be
deducted and withheld quarterly, monthly, or semi-monthly to the
Department. The payment schedule is determined:
1. Quarterly: Where the aggregate amount required to be
deducted and withheld for each quarterly period reasonably
can be expected to be less than $300, the employer shall
remit on or before the last day of April, July, October, and
January for the (4) quarters ending the last day of March,
June, September, and December. Mail the payment and the
PA-W3 to: PA Department of Revenue, Dept. 280415,
Harrisburg, PA 17128-0415.

2. Monthly: Where the aggregate amount required to be

deducted and withheld for each quarterly period reasonably
can be expected to be $300 or more, but less than $1,000,
the employer shall remit the tax monthly on or before the
15th day of the succeeding month for January to November
and on or before January 31 for the month of December.
Mail the payment and the PA-501 to: PA Department of
Revenue, Dept 280414, Harrisburg, PA 17128-0414.

12
3. Semi-Monthly: Where the aggregate amount required to be
deducted and withheld for each quarterly period reasonably
can be expected to be $1,000 or more, the employer shall
remit the tax within three (3) banking days after the close of
each semi-monthly period. The semi-monthly periods end
on the 15th and on the last day of the month. Mail the pay-
ment and the PA-501 to: PA Department of Revenue,
Dept. 280414, Harrisburg, PA 17128-0414.

If the amount to be remitted is $20,000 or more, the employer

is required to remit the payment by Electronic Funds Transfer
(EFT). See page 15 for EFT remittance instructions.

A schedule of reporting periods and due dates is available by

requesting. Period Ending and Administrative Due Dates for
the Remittance of Employer Withholding Tax and Filing of
Quarterly Returns and W-2 Forms (REV-1716). See inside front
cover for ordering information.

Changes: An employer may change to a less frequent payment

schedule only at the beginning of a calendar year. Changes to a
more frequent basis of filing must be made at the beginning of any
quarter that follows a quarter in which the $300 or $1,000 limits
are exceeded. Notification of such changes shall be reported by
completing the Tax Account Information Change/Correction
Form (REV-1705) and mailing it to: PA Department of Revenue,
Dept. 280901, Harrisburg, PA 17128-0901.

Filing Reconciliation Returns

Every employer required to deduct and withhold tax shall file a
quarterly return of income tax withheld on or before the last day
of April, July, October, and January for each three-month period
ending the last day of March, June, September, and December.

Employers who remit withheld taxes on a monthly or semi-monthly

schedule must mail the quarterly reconciliation document,
Employer Quarterly Return of Income Tax Withheld (PA-W3),
to: PA Department of Revenue, Dept. 280903, Harrisburg, PA
17128-0903.

Employers who remit withheld taxes quarterly must mail the quar-
terly reconciliation document, Employer Quarterly Deposit
Statement and Return of Income Tax Withheld (PA-501/W3),
to: PA Department of Revenue, Dept. 280415, Harrisburg, PA
17128-0415.

13
 INTEREST AND PENALTIES

Interest
If any amount of tax required to be withheld is not reported and
paid in full on or before the due date, simple interest will be
charged daily from the date the tax is due and payable to date of
payment. The rate of interest will be announced annually by the
PA Department of Revenue. This interest rate will continue for the
calendar year regardless of subsequent change in the federal
interest rate in such calendar year. Interest is computed by multi-
plying the late paid or unpaid tax x days delinquent x daily inter-
est rate. The daily interest date = annual interest rate divided by
365. Request Interest Rates and Calculation Methods for All
Taxes (REV-1611), for interest rates. See inside front cover for
forms ordering information.

Penalties
Failure to file a quarterly return may result in the imposition of addi-
tional tax of five (5) percent per month of the underpayment for
each month or fraction thereof (maximum penalty of 25 percent).

Failure to pay withheld tax to the PA Department of Revenue on

or before the due date for filing the quarterly reconciliation return
will result in an additional tax of five (5) percent per month of the
underpayment for each month or fraction thereof (maximum
penalty of 50 percent).

If any part of any underpayment of tax that is later proved to be

the result of fraud, an amount equal to 50 percent of the under-
payment will be added to the tax.

Personal Responsibility
All taxes required to be withheld pursuant to law, or under the
color of law, constitute a trust fund. If tax is not withheld or is mis-
applied, an employee or representative of the employer who has
a duty to collect or pay tax, or prepare tax documents, an officer,
director, or partner of the employer, and a person who receives
trust fund monies may be held personally liable for payment.

Any person required to collect, account for, and pay any income
tax who willfully fails to collect, truthfully account for, or attempts
to evade or defeat any such tax or the payment thereof, shall be
liable to a penalty equal to the total of tax evaded, not collected
or accounted for, and paid.

Criminal Prosecution
Any person who willfully fails or refuses to collect and remit tax,
fails to pay the tax, fails to file a return, files a fraudulent or false

14
return, or presents for payment of the tax a check which is
returned to the Commonwealth as uncollectible, may be subject
to criminal prosecution.

ELECTRONIC FILING: E-TIDES

The PA Department of Revenue and Labor & Industry have part-
nered to bring you e-TIDES (Electronic Tax Information and Data
Exchange System). E-TIDES is an Internet based business tax
filing system, available free of charge.

• Safe: The site and your data are secure.

• Easy: Register online to activate your e-TIDES account.

There is a two-step registration process. First, register to
obtain an electronic signature, and then register your enter-
prise for electronic filing.

• Convenient: File your returns and make payments togeth-

er, or you can file returns and payments separately. Pay
electronically using Automated Clearing House (ACH) Debit,
ACH Credit or credit card.

• Efficient: E-TIDES allows you to import data from standard

business software. The import specifications provide instruc-
tions to accommodate multiple enterprise registrations, tax fil-
ings and payments.

• Customer Driven: You can approve multiple individuals to

file returns and/or payments within or outside your business.

• Prompt: Register online for Electronic Funds Transfer

(EFT). Access ACH reporting instructions online.

REMITTANCE OF TAX
PAYMENTS BY ELECTRONIC
FUNDS TRANSFER (EFT)
By regulation, the PA Departments of Treasury and Revenue
have implemented a program enabling taxpayers to remit tax
payments through Electronic Funds Transfer (EFT). This regulation
requires participation of taxpayers remitting a payment of
$20,000 or more. Failure to comply with the EFT remittance
requirements may result in an assessment of a penalty equal to
three (3) percent of the total tax due, not to exceed $500. The

15
 penalty may be imposed on all payments of $20,000 or more that
are not presented to the Department of Revenue by an approved
payment method. If a business does not meet the $20,000
threshold, it may voluntarily request participation in the program.

The PA-W3 Employer Quarterly Returns are required to be filed

when payments are remitted through EFT. Additional document
filing requirements are listed below.

EFT Requirement: If you meet the $20,000 payment threshold,

you are required to remit your payment electronically.

EFT Registration: Prior to enrolling for EFT, a business/enterprise

must first register with the Department of Revenue for taxes and
services administered by the Department. Registration information
is provided on page 1 of this booklet in the How to Register
section. To enroll for EFT, register online through the Electronic
Tax Information and Data Exchange System (e-TIDES) at
www.etides.state.pa.us. If you do not have Internet capability,
an EFT Authorization Agreement (REV-331A) form can be
faxed or mailed to you by calling 1-800-362-2050.

Electronic Payment Methods: Taxpayers can choose one of the

following electronic methods: Automated Clearing House (ACH)
Debit, Automated Clearing House (ACH) Credit, or credit card. A
convenience fee, which is based on the tax due, will be charged
by the vendor for processing the credit card transaction. Credit
card payments can be made by calling 1-800-2PAYTAX or over
the Internet at www.revenue.state.pa.us.

Document Filing Requirements

1. Semi-monthly and Monthly filers who remit payments
by ACH Debit, ACH Credit, or credit card do not file the
PA-501 Employer Deposit Statement of Withholding Tax
document. However, the PA-W3 Employer Quarterly
Return of Withholding Tax must be filed on or before the
due date.

2. Quarterly filers who remit payments by ACH Debit, ACH

Credit, or credit card must continue to file the PA-W3
Employer Quarterly Return of Withholding Tax on or
before the due date.

Penalty
Failure to comply with the EFT remittance requirements may
result in an assessment of a penalty equal to three (3) percent of
the total tax due, not to exceed $500. The penalty may be imposed
on all payments of $20,000 or more that are not presented to the
Department of Revenue by an approved payment method.

16
 OVERPAYMENTS AND
REFUNDS
Verified overpayments for a quarter will be credited to the most
current quarter after offset to any outstanding collectible liabilities,
and notification will be sent to the employer.

AMENDED RETURNS
If an error is discovered after you file a return, you can correct the
error by filing an amended return (PA-W3R). This return must be
clearly marked amended return. The PA-W3R form may be
obtained from any Revenue district office listed on the inside back
cover of this booklet, or by calling our 24-hour Forms Ordering Mes-
sage Service at 1-800-362-2050. Taxpayers with Special Hearing
and/or Speaking Needs may call 1-800-447-3020 (TT only).

• If the error results in an overpayment, the amended PA-W3R

must be filed within three (3) years from the date the original
payment was received in order to receive a credit or refund.

• If a payment was remitted with your original return, include

the amount of this payment in total deposits for the quarter.

• If a credit was received from your original return, deduct that

amount from the total deposits for the quarter.

• If the amended return results in a balance due, remit the tax

due with the amended return. You will be billed for late
charges, if applicable.

If, in any filing period, more than the correct amount of tax is
deducted from any wage payment, the employer is authorized to
make the appropriate adjustment in his withholding for a subse-
quent period or periods in the same taxable year. If the over with-
holding is not offset by the last withholding period of the year, the
employee shall report the amount actually withheld on his yearly
income tax return.

Mail your amended return to:

PA Department of Revenue
Dept. 280903
Harrisburg, PA 17128-0903

WITHHOLDING STATEMENTS
An employer must complete two (2) copies of the Wage and Tax
Statement (Form W-2) for each employee to satisfy Pennsylvania
tax requirements. One copy must be furnished to the employee,
and one copy submitted to the PA Department of Revenue. The
Wage and Tax Statements must contain the following information:

17
 1. The name Pennsylvania printed, stamped, or typed on the
form;

2. Employer’s name, address, and Employer Identification

Number (EIN);

3. Employee’s name, address, and Social Security Number;

4. Total amount of compensation subject to the Pennsylvania

Personal Income Tax for the entire tax year;

5. Total amount of Pennsylvania tax withheld. The total amount

of tax withheld must be shown in the box provided on your
form for State Tax Withheld. This block specifically must be
identified as withheld state tax for the Commonwealth of
Pennsylvania.

All W-2 forms must be submitted to the PA Department of Revenue

by January 31 following the year of compensation, or 30 days
from the termination of business, if the business terminated
during the calendar year. An employee whose employment is
terminated before the close of a calendar year may request, in
writing, the employer to furnish him a W-2 form at an earlier time.
If there is no reasonable expectation on the part of both employer
and employee of further employment during the calendar year,
then the employer shall furnish the W-2 form to the employee on or
before the 30th day after the date of the request, or the 30th day
after the date on which the last payment of wages is made,
whichever is later.

Any employer who willfully furnishes a false or fraudulent W-2

form, or willfully fails to furnish a statement in the prescribed
manner or time, or fails to show the information required is liable
for a penalty of $50 for each failure.

Electronic Reporting
Employers can now file their year-end employee W-2 Wage and
Tax Statements and W-2 Transmittals (REV-1667) online
through the e-TIDES business tax filing Web site. Employers
can also upload computer files containing W-2 data to e-TIDES
eliminating the need to enter the data. Visit e-TIDES at
www.etides.state.pa.us for more information.

Magnetic Media Reporting of W-2’s

In lieu of filing copies of the W-2 forms with the PA Department of
Revenue, employers may submit information on magnetic tape or
cartridge. The Department accepts the combined federal-state
annual W-2 reporting specifications as indicated in the Social
Security’s Magnetic Media Reporting Publication TIB-4. Effective
for tax year 2001 due in 2002, all employers must adapt and use
the Social Security Administration’s Magnetic Media Report-
ing and Electronic Filing (MMREF-1) filing specifications to

18
report W-2 information to the Department. Additional information
on tape reporting can be obtained by writing to:

PA Department of Revenue
Dept. 280900
Harrisburg, PA 17128-0900

Reporting W-2 information on diskettes is not accepted by the PA

Department of Revenue.

An employer may also submit a computer-printed listing in lieu of

copies of the W-2 forms. The listing must include all the information
printed on the W-2 forms to be acceptable by the Department.

The W-2 forms, magnetic media, or printed listing must be for-

warded to the PA Department of Revenue accompanied by the
W-2 Transmittal (REV-1667). The W-2 Transmittal Form and a
mailing label are located in the back of the Employer Withholding
coupon book.

GENERAL INFORMATION
• Promptly forward your coupon book to your accountant or
tax preparer.

• Use the Change/Correction Form (REV-1705) to request

account changes. This form is included in your coupon
book. Do not report changes or change any preprinted
information on the PA-501 or PA-W3.

• Replacement coupon books are available by contacting the

PA Department of Revenue, Dept. 280901, Harrisburg,
PA 17128-0901, or by calling the Taxpayer Service and
Information Center at (717) 787-1064. The request must
include the employer’s name, address, Account ID Number,
and Employer Identification Number.

• Use PA-501R and PA-W3R forms only when you do not

have preprinted coupons, or you have not received a
coupon booklet, or lost the necessary forms. Instructions
are included with these forms.

19
 COMMONLY ASKED
QUESTIONS BROCHURES

REV–20 . . .Employer Withholding for

Pennsylvania Taxable
Compensation Guide
REV– 527 . . .Taxpayers Bill of Rights
REV– 571 . . .So You Are Moving To PA
REV– 580 . . .Employer Withholding
REV– 588 . . .The Beginners Guide for Starting a
Business in PA
REV– 611 . . .Determining Residency for PA Purposes
REV– 612 . . .Military Pay
REV– 614 . . .Scholarships, Fellowships, and Stipends
REV– 615 . . .Reciprocal Agreements
REV– 617 . . .Hiring Household Workers
REV– 629 . . .How Nonresidents are Taxed
REV– 631 . . .TAX BACK/Tax Forgiveness
REV– 634 . . .Employee Fringe Benefits and
Wage/Salary Supplements
REV– 637 . . .Unreimbursed Allowable Employee
Business Expenses
REV– 696 . . .Who is an Independent Contractor?

These brochures can be ordered directly through the

Department’s 24 hour Forms Ordering Message Service
by dialing 1-800-362-2050, or by selecting the forms
ordering options on the Department’s toll-free automated
FACT & Information Line at 1-888-PATAXES (728-2937).
Service for Taxpayers with Special Hearing and/or Speak-
ing Needs 1-800-447-3020 (TT Only). These brochures
are also available on the Department’s Web site at
www.revenue.state.pa.us.

20
 REVENUE DISTRICT OFFICES*
Altoona Norristown
Ste. 204 Second Fl.
Cricket Field Plz. Stoney Creek Office Center
615 Howard Ave. 151 W. Marshall St.
Altoona, PA 16601-4867 Norristown, PA 19401-4739
(814) 946-7310 (610) 270-1780

Bethlehem Philadelphia
44 E. Broad St. Rm. 201
Bethlehem, PA 18018-5998
State Office Bldg.
(610) 861-2000
1400 W. Spring Garden St.
Philadelphia, PA 19130-4007
Bradford
Ste. 2 (215) 560-2056
600 Chestnut St.
Bradford, PA 16701-2292 Pittsburgh
(814) 368-7113 Rm. 104
State Office Bldg.
Doylestown 300 Liberty Ave.
Ste. 104 Pittsburgh, PA 15222-1210
600 Louis Dr. (412) 565-7540
Warminster, PA 18974-2847
(215) 443-2990 Pottsville
115 S. Centre St.
Erie Pottsville, PA 17901-3047
448 W. 11th St. (570) 621-3175
Erie, PA 16501-1501
(814) 871-4491 Reading
Ste. 239
Greensburg 625 Cherry St.
Second Fl. Reading, PA 19602-1186
15 W. Third St. (610) 378-4401
Greensburg, PA 15601-3003
(724) 832-5386
Scranton
Rm. 305
Harrisburg
Samters Bldg.
Lobby
Strawberry Sq. 101 Penn Ave.
Harrisburg, PA 17128-0101 Scranton, PA 18503-1970
(717) 783-1405 (570) 963-4585

Indiana Sunbury
Canterbury Office Stes. 535 Chestnut St.
2263 Philadelphia St. Sunbury, PA 17801-2834
Indiana, PA 15701-1595 (570) 988-5520
(724) 357-7600
Washington
Johnstown Ste. 145 UL
Third Fl. Millcraft Center
345 Main St. 90 W. Chestnut St.
Johnstown, PA 15901-1641 Washington, PA 15301-4549
(814) 533-2495 (724) 223-4550

Lancaster Wilkes-Barre
Ste. 201 Ste. 201
315 W. James St. Thomas C. Thomas Bldg.
Lancaster, PA 17603-2979
100 E. Union St.
(717) 299-7581
Wilkes Barre, PA 18701-3200
(570) 826-2466
New Castle
103 S. Mercer St.
New Castle, PA 16101-3849 Williamsport
(724) 656-3203 440 Little League Blvd.
Williamsport, PA 17701-5055
Newtown Square (570) 327-3475
Ste. 1
90 S. Newtown St. Rd. York
(Route 252) 140 N. Duke St.
Newtown Square, PA 19073-4090 York, PA 17401-1110
(610) 353-4051 (717) 845-6661

* THE LOCATIONS OF THE LISTED DISTRICT OFFICES CAN CHANGE

WITHOUT NOTICE. PLEASE CALL TO VERIFY THE LOCATION.
 PENNSYLVANIA
DEPARTMENT OF

evenue

Commonwealth of Pennsylvania
www.revenue.state.pa.us