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.
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.
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.
The Philadelphia Revenue Department has also issued guidance for non-resident employees who live outside the city.