Quick question about Earned income tax (Pittsburgh, Butler: homes, transfer, school district)

[shadoffmom]

OK - so just want to get this clear - how does this local earned income tax work? Say my husband works in Pittsburgh, but we live in - say Butler (just tossing it out there because they have cute homes in our price range I see the earned income tax for Pittsburgh is 3% - and for Butler it is 1% - which would you have to pay? He works in the 3% area but we live n the 1 % area?

Thanks in advance!

[I_Like_Spam]

Originally Posted by shadoffmom

OK - so just want to get this clear - how does this local earned income tax work? Say my husband works in Pittsburgh, but we live in - say Butler (just tossing it out there because they have cute homes in our price range I see the earned income tax for Pittsburgh is 3% - and for Butler it is 1% - which would you have to pay? He works in the 3% area but we live n the 1 % area?

Thanks in advance!

You pay earned income tax to the municipality and school district where you live.

You pay a $52 a year occupation levy to the municipality where you work.

[greg42]

The earned income tax is based on where you LIVE, as noted.

After a change implemented beginning last year, the proper amount will be withheld directly from his paycheck regardless of where you lie and work, as long as both are within PA. He will have to provide the employer with the proper location of residence. And you file a form at the end of the year to verify. There won't be anything owed or refunded because it's a flat tax on only earned income (e.g. wages; it is often just referred to as wage tax). There are a few places with in-between rates, but most places that are not the city are 1%.

That additional bit is now called Local Services Tax (formerly Occupational Privilege Tax) and that is the only one that is levied based on where you WORK. It is capped at $52/year. (The city collects that much, but a few outlying municipalities may still collect a smaller amount.) Used to be withheld all at once but is now withheld throughout the year. BUT. As a transfer into the state, he'll owe the whole $52 even if he only works a couple months at the end of the year. It's a small amount in the grand scheme of things, but that is in fact how it works just so you're not surprised by it.

Butler is too far.

[Noodlenoggin]

Thank you both!