Montgomery County Employees at Center City Businesses: Get Ready to Start Shelling Out for City Wage Tax Again

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Image via John Morgan at Creative Commons.

Uncle Sam is about to start dipping into your paycheck again. Or, rather, Mayor Jim Kenney is. The moratorium on Philadelphia businesses collection of city wage tax from remote workers is ending, reports Pat Loeb for KYW Newsradio. 

With business offices in the city reopening, commuters from Montco will again notice a 3.5 percent drop in earnings. The withholding will occur even if employees continue to work remotely. 

The collection of taxes from offsite employees is tied to a state law provision known as “convenience of the employer.” It holds that if a company orders its staff to work from home (as many did during the pandemic), nonresidents don’t owe the wage tax. 

But when the order is lifted, the city wage tax kicks back in. 

“We’ve advised companies that they should develop a strong policy about mandating work from home. It’s completely up to the employer, and it’s going to depend on their policies if they want their employees to be subject to the wage tax or not,” said Deputy Commissioner Rebecca Lopez Kriss. 

The coronavirus-related loss of non-resident tax payments — which comprise about 40 percent of total wage tax revenue — was a major cause of last year’s budget cuts in Philadelphia. 

More on the city wage tax at KYW Newsradio

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