PHILADELPHIA, PA — In a move that could impact thousands of non-resident workers, the City of Philadelphia has issued new instructions for claiming Wage Tax refunds. The revised guidelines, which apply to tax years 2023 and onward, are aimed at streamlining the refund process for non-residents who have had the city’s Wage Tax deducted from their paychecks for days they were required by their employer to work remotely.
The Wage Tax, which applies to salaries, wages, commissions, and other compensation earned in Philadelphia, must be paid by both residents of the city and non-residents who work within city limits. Typically, this tax is withheld by employers and remitted to the City on behalf of employees. If an employer fails to do this, the employee is responsible for filing and paying the Earnings Tax. However, in some cases, taxpayers can petition the City for a refund, provided they submit the correct form and necessary documents.
The updated instructions for non-resident petitioners include several key changes. Firstly, an Employer Certification Letter must be submitted along with the refund petition. This letter should be transferred to the employer’s letterhead, signed by the employer, and submitted without alterations to the template provided by the City. The Department of Revenue has stressed that it will reject any requests featuring an employer certification that deviates from the template. Both the employer and employee must sign refund petitions, as they are considered legal documents.
Another requirement is the submission of a Dates and Locations worksheet. This document provides a detailed record of dates and places where the employee was required to work remotely or travel, aiding the City in verifying the days the employee worked outside Philadelphia. The City recommends using the worksheet included with the guidelines to ensure all necessary details are captured.
Lastly, petitioners must include their W-2 form, which shows local wages paid, with their refund request. This document is essential for verifying the petitioner’s Social Security Number, their employer’s Federal Identification Number, their compensation, and the tax paid to Philadelphia.
The City is encouraging taxpayers to submit their refund requests online via tax-services.phila.gov. This platform, which is available on mobile devices and in Spanish, allows users to upload digital copies or photos of their documentation. It also features a “Where’s my refund” tracking service, enabling petitioners to easily follow the progress of their refund. Those who choose to file on paper should allow 30 days before checking the status of their refund.
The new guidelines underscore Philadelphia’s commitment to ensuring that its tax policies are fair and transparent. For non-resident Philadelphia taxpayers who have navigated the complexities of remote work during the pandemic, these changes could mean a welcome financial reprieve.
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