2001-2008, Montgomery Township. All rights reserved
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These taxes are based on the gross wages, salaries, commissions and other earned compensation received by residents, as well as any income from net profits and joint ventures.
All residents are subject to the tax. The earned income is generally paid to the community in which one lives. If an employer is deducting the tax, residents must check with their payroll department to be sure that their deductions are being remitted to the proper municipality.
All non-residents who are employed, headquartered out of, or working in the municipality are generally subject to the tax.
For newcomers to the municipality or school district, only income earned, paid, or received, after becoming a resident or employed within the district is taxable. However, taxes may be due those taxing districts in which the taxable worked or previously resided.
All persons must register with the tax office within ten (10) days of becoming a resident or an income earner.
Residents who work outside Pennsylvania or in the City of Philadelphia must check with the tax office for special provisions.
The following are examples of taxable income when earned by a resident:
The following are examples of income which are generally not subject to the tax:
NOTE: IF A TAXABLE HAS MORE THAN ONE PLACE OR SOURCE OF EMPLOYMENT, ALL SOURCES MUST BE REPORTED.
Generally, for employed persons paid on a salary, wage or commission basis, there are NO allowable deductions from gross compensation. THE ONLY EXCEPTIONS ARE BUSINESS EXPENSES WHICH MEET ALL THREE OF THE FOLLOWING TESTS:
WHEN DEDUCTIONS ARE TAKEN, an itemized schedule must accompany the return along with certification that expenses incurred are required as a condition of employment and all reimbursements are included in the schedules UE-1 and 2106.
For persons who are self-employed, proprietors or partners, and pay the tax on a net profit basis, the deductions allowable on Schedule C, F, or K, (or equivalent) for determining net profit for state tax purposes are also allowable for determining net profit for local tax purposes.
The following are examples of items which are NOT DEDUCTIBLE:
For persons whose employers withhold the tax, a FINAL RETURN form is mailed each year and must be filed with the Tax Office by April 15th for the prior year ended December 31st.
For persons whose employers do not withhold the tax, a QUARTERLY RETURN reporting taxable income must be filed with the Tax Office on or before each April 30th, July 31st, October 31st, and January 31st for the quarters ended March 31st, June 30th, September 30th, and December 31st, respectively. Payment of the tax due must accompany the return. If there are no taxable earnings for a particular quarter, a return indicating such must be filed.
For SELF-EMPLOYED persons who pay the tax on a net profits basis, an annual estimate of net profits must be filed on the QUARTERLY TAX RETURN with the Tax Office on or before April 30th for the current year. The taxpayer may elect to pay the entire estimated tax when it is filed, or pay it in four equal quarterly installments due on or before April 30th, July 31st, October 31st, and January 31st. On or before April 15th of the succeeding year, a FINAL RETURN must be filed showing actual net profits. At the time of filing a final return, the taxpayer shall pay the balance of the tax due or receive a credit/refund in the case of an overpayment. TAXPAYERS WHO UNDERESTIMATE THEIR TAX LIABILITY BY MORE THAN 25% SHALL BE CHARGED INTEREST AND PENALTY AT THE RATE OF 12% PER ANNUM, COMPUTED ON THE AMOUNT AND DURATION OF UNDERPAYMENT.
NOTE: Unsigned, improperly completed, or unsubstantiated tax returns will be considered incomplete and will not be considered as filed.
RANDOM AUDITS will be performed on taxpayers to assure accurate reporting of all income.
VERIFICATION OF EARNINGS OR NET PROFITS reported to the Tax Office must be filed on or before April 15th for the prior year ended December 31st. Suitable verification is Form W-2 for employed taxpayers or the appropriate federal schedule (e.g. Schedule K, C, F 1120s etc.) for self-employed taxpayers.
PENNSYLVANIA DEPARTMENT OF REVENUE INFORMATION will be utilized, when available, to verify the accuracy of information on the tax returns.
If, for any reason, the tax is not paid when due, interest at the rate of six percent per annum on the amount of tax, and ad additional penalty of one-half of one percent of the amount of the unpaid, shall be added and collected.
Delinquent taxpayers will, at additional cost, initially be notified by mail of unpaid taxes and given the opportunity to pay. If the tax return is still not completed properly and filed with the office serving your district, Berkheimer will file charges against the taxpayer with the District Magistrate.
If full payment is not received by due date, Berkheimer will:
NOTE: Failure to receive a tax reporting form is NOT reason to fail to pay earned income and net profits taxes. Residents have the responsibility of obtaining a form from the tax office if one is not received in the mail.
Random compliance audits will be conducted to assure that residents are accurately reporting income.
All payments, inquiries, and tax returns are to be directed to the Berkheimer office serving your district.
Persons subject to the Philadelphia tax may take a credit on any tax due their resident municipality on income earned in Philadelphia. This credit may not exceed the local tax due on the income earned in the City of Philadelphia. Taxes paid to Philadelphia may not be used as credit against taxes earned outside the City. In order to properly compute your local tax and get credit for the deduction follow the following procedures: (1) Compute total taxable income (2) Compute total income subject to Philadelphia tax plus unreimbursed business expenses; (3) Deduct total of item #2 from Item #1; (4) Multiply balance (if positive) times local tax rate to compute tax; (5) If item #3 is negative, enter 0 on taxable income line (no tax due).
Montgomery Township
1001 Stump Road
Montgomeryville, PA18936-9605
2001-2008, Montgomery Township. All rights reserved
