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Important Update for US Payroll Customers with Employees in Pennsylvania: PA Act 32 Patch Now Availa
Dear
Oracle US Payroll Customer,
Pennsylvania recently enacted legislation commonly referred to as "PA Act 32", which impacts all customers with employees in the state of Pennsylvania. The Pennsylvania (PA) Act 32 of 2008 provided for the restructuring of the Earned Income Tax Collection System for local governments and school districts into sixty nine Tax Collection Districts (TCDs). The collection of taxes for each TCD will be handled by a “certified” tax collector designated by Pennsylvania’s Department of Community and Economic Development (DCED).
This legislation changes the way Pennsylvania local earned income taxes are calculated and reported. One of the most critical changes is that the employer will now be required to withhold local earned income tax based on the greater of either the employee’s resident local jurisdiction rate or the employee’s nonresident local jurisdiction rate. Besides the tax calculation changes, it will also be necessary to track the employee’s resident and non-resident (work location) Political Sub Division (PSD) codes as this information will be required when reporting and remitting local earned income tax data and payments. The Pennsylvania DCED has published a list of Political Sub Division codes.
Pennsylvania recently enacted legislation commonly referred to as "PA Act 32", which impacts all customers with employees in the state of Pennsylvania. The Pennsylvania (PA) Act 32 of 2008 provided for the restructuring of the Earned Income Tax Collection System for local governments and school districts into sixty nine Tax Collection Districts (TCDs). The collection of taxes for each TCD will be handled by a “certified” tax collector designated by Pennsylvania’s Department of Community and Economic Development (DCED).
This legislation changes the way Pennsylvania local earned income taxes are calculated and reported. One of the most critical changes is that the employer will now be required to withhold local earned income tax based on the greater of either the employee’s resident local jurisdiction rate or the employee’s nonresident local jurisdiction rate. Besides the tax calculation changes, it will also be necessary to track the employee’s resident and non-resident (work location) Political Sub Division (PSD) codes as this information will be required when reporting and remitting local earned income tax data and payments. The Pennsylvania DCED has published a list of Political Sub Division codes.
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