Springfield Township residents who worked in the City of Philadelphia during 2020 and have been required by their employer(s) to work from home have an opportunity to realize an income tax savings in 2021.
Under PA Act 32 of 2008 (the Local Enabling Act), any employee who has been required to work from home for a period of 90 or more consecutive business days can have their employer identify their home as an "office" for tax withholding purposes. By considering your home as an "office", a resident's income would then be subject to the Township's earned income tax rate as opposed to the City of Philadelphia. The Philadelphia non-resident wage tax for is currently 3.448% while Springfield’s earned income tax for both the school district and the Township totals 1%. Potentially a direct savings of some 2.448% on your total taxable income.
For Fiscal Year 2021
In order to realize this savings, it is important that you contact your payroll or human resource department and request that they establish an account with the Township’s third-party payroll collection agent, Berkheimer Tax Innovations at 610-599-3139 or their website https://www.hab-inc.com/.
Upon doing so, your employer will then begin to withhold your taxes based on your home as your work location. Please note that by identifying your home as your work location, you will also be subject to the township’s Local Services Tax (LST) of $1.00 per week/$52.00 per year (LST is applicable to all employees working within the Township).
If you are self-employed you should already have a direct account with Berkheimer for the required quarterly payments of both taxes.
For Fiscal Year 2020 ONLY
The City of Philadelphia has released new guidelines (as of January 20, 2021) for anyone who works in the City but resides outside of Philadelphia and has worked from home due to the Pandemic for greater than ninety (90) days in fiscal year 2020. It is important to note that township residents receive a direct offset for any wage and/or net profit taxes paid to Philadelphia. Meaning that if you have paid Philadelphia during 2020 it would be applied directly against any liability for taxes properly due to Springfield Township/Springfield Township School District.
Employer-requested refund form (only for 2020)
In previous years, only an employee could apply for a Wage Tax refund. Because so many people were ordered to work from home, and for TY2020 only, we are allowing employers to submit a refund request on behalf of a group of their non-resident employees. To do so, the City has created a new form you can download now at www.phila.gov/documents/2020-wage-tax-refunds/.
The employer must provide the following information for each employee:
- First and last name
- Social Security Number
- Current mailing address
- The highest gross compensation on the W-2
- Philadelphia withholdings
- Calculated refund amount
Starting in February, employers will be able to upload the form on the City's eFile/ePay website. Refund checks will be mailed directly to employees, so please double-check mailing addresses.
New online non-resident and income-based petitions
If your employer is submitting a petition on your behalf, DO NOT submit a petition yourself. Need to submit on your own? You may be able to use one of our forthcoming online Wage Tax refund petitions.
The first form is for non-resident employees who were ordered to work from home during the pandemic. It will be a streamlined petition, and only available to workers who were required to work from home by their employer. Like paper filing, a complete petition must include:
- A letter from your employer for the dates you were required to work outside Philadelphia.
- A full copy of your W-2, which includes taxes paid to Philadelphia.
The second online form is for income-based petitions. It can be signed by the employee or a preparer. Your petition must include:
- A full copy of your W-2 for each employer (if you have more than one).
- A copy of the PA SP 40 form you filed with the Commonwealth of Pennsylvania.
These online refund forms –as well as paper versions– should be available on the City of Philadelphia's website in the first week of February.
For other Wage Tax refunds
The new forms described above, are NOT for employees who would like to request a Wage Tax refund for travel, stock options, and/or business expenses. If this is your case, you must continue to use paper forms.
All taxpayers should also note that we will accept digital employer signatures and have created a uniform travel worksheet. All 2020 paper refund forms will be available on our website starting in February: www.phila.gov/revenue/tax-forms.
If you have any questions, please email refund.unit@phila.gov OR call us at (215) 686-6574; 6575 or 6578.
