General | Register New Business | Wage Tax | PGH-40 Refunds
FAQ | Local Services Tax | Business Privilege Tax FAQ | Taxpayer Bill of Rights

GENERAL INFORMATION

WHAT ARE THE HOURS OF OPERATION FOR THE SELF-ASSESSED TAX OFFICE?
The office is open 7:30 a.m. through 4:00 p.m., Monday through Friday, excluding holidays.

WHERE IS THE OFFICE LOCATED?
The office is located on the 2nd Floor, City-County Building – 414 Grant Street.
The mailing address is:

CITY OF PITTSBURGH –
DEPARTMENT OF FINANCE
414 GRANT ST
PITTSBURGH PA 15219

• For general City tax questions call TAXPAYER SERVICES at 412-255-8822
• For tax forms call our FORMS LINE at 412-255-2524
• For PARKING TAX questions call 412-255-8603
• For AMUSEMENT TAX questions call 412-255-2547
• For questions regarding REGISTERING A NEW BUSINESS call 412-255-2543

It is the taxpayer’s responsibility to pay taxes when due. Failure to receive a form is never an excuse for a late payment.

City and School District of Pittsburgh taxes that are not paid when due require the additional payment of penalty and interest. The City and School District do not recognize Federal tax extensions. No extensions are ever granted.

Taxes that are not paid when due accrue penalty and interest. One day’s delinquency past the due date means a whole month’s penalty and interest.

If the due date of a tax return falls on a holiday or a weekend it MUST be postmarked by the Post Office on the due date or earlier to be considered on time and not late.

When the Treasurer receives only a partial payment and penalty and interest are due, the payment is applied to TAX liability until paid off and then payments are applied to the accrued interest and penalty. A bill will be sent for the balance of tax plus additional penalty and interest.

At the time one begins doing business in Pittsburgh, the business must be registered with the City Treasurer.

Several of the taxes require the filing of a tax return by the taxpayer even when there is no tax due. This is true for the Earned Income Tax, Business Privilege Tax, and Payroll Expense Tax.

In accordance with the Local Taxpayers Bill of Rights, Act 50 of 1998, a taxpayer shall file a written request for a refund or a credit on the prescribed form within 3 years of the due date of the tax return, or 1 year after actual payment of the tax, whichever is later.

Tax rates are subject to change at any time.

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REGISTERING A NEW BUSINESS

Any business, trade or profession carrying on an activity within the City needs to register with the Treasurer’s Office. You can do this by downloading a New Business Registration form, come in to the office, or call 412-255-2543 to have a form mailed to you.

In regard to the gross receipt taxes, the deadline for the first return is 40 days after beginning business. The amount due is based on the first 30 days business computed or accounted for on an accrual basis even for a cash basis taxpayer.

In the second year (the first full year of business), the tax is computed by multiplying the same first 30 day’s gross receipts by twelve months times the current tax rate.

Subsequent year’s taxes are computed by using the previous year’s gross receipts to determine the current year’s tax, payable April 15th.

Please note that it is possible that a taxpayer will owe both earned income tax on his/her net income from a business or profession and also owe business privilege tax on the same gross receipts used to determine net income. This is not double taxation because different tax bases are used (the subject of taxation is different).

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WAGE TAX INFORMATION FOR
CITY & SCHOOL DISTRICT OF PITTSBURGH

The Pennsylvania legislature passed Act 166 of 2002 changing how you, as an employer, should withhold the local earned income and wage tax. This became effective January 1, 2003.

WHAT IS TAXED?

State of PA wages = Local wages for someone who was a resident of Pittsburgh for the entire year. The City and School District of Pittsburgh follow the same rules as the State of Pennsylvania for wages. Every employer with an office or place of business in the State of Pennsylvania is required to withhold the School District Earned Income Tax from employees who are residents of the Pittsburgh School District. As a matter of convenience to their employees, we encourage all out of City employers to also withhold the City portion of the Wage Tax.

Every employer with an office or place of business within the City must withhold both City and School District Wage Tax from their employees who are residents of Pittsburgh. Additionally, if the employer has an office or place of business in Pittsburgh and outside of Pittsburgh, the employer must withhold both City and School District Wage Tax at all locations from employees who are residents of Pittsburgh.

Every employer with an office or place of business within the City of Pittsburgh must withhold the City Wage Tax at the rate of one percent (1%) from all non-residents of Pennsylvania who are employed within the City.

Wages, salaries, tips, bonuses, stock options, or compensation of any form that is taxable as compensation for the State of Pennsylvania is also taxable by the City of Pittsburgh.

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The following is a summary of the tax liabilities for both resident and non-resident employees who work both in and out of the City of Pittsburgh. For additional information, call 412-255-8822.

Employers with a location in the City of Pittsburgh MUST withhold earned income taxes for all City residents according to the following:

Click here to find out if an employee’s address is located in Pittsburgh Zip Code Directory.

RESIDENTS OF PITTSBURGH
All resident employees are subject to a 1% earned income tax for the City of Pittsburgh AND a 2% School District of Pittsburgh Earned Income Tax. Combined total of 3% of gross wages.

MT OLIVER BOROUGH RESIDENTS
All residents of Mt. Oliver are subject to the School District of Pittsburgh Earned Income Tax at the rate of 2%. The Borough of Mt. Oliver levies and collects its own Earned Income Tax.

NON-RESIDENT OF THE CITY OF PITTSBURGH
A non-resident of the City of Pittsburgh is a person or entity domiciled in a Pennsylvania municipality other than the City of Pittsburgh and Mt. Oliver Boro for the entire tax year. A PGH-40 tax return must be filed in order to receive a refund for wage taxes erroneously sent to the City and School District of Pittsburgh. You must have the Non-Resident Exemption Certificate completed and signed by your local tax collector. If you were a resident of more than one municipality, a WTEX must be completed for EACH municipality. Contact our office at 412-255-2524 for additional forms.

OUT OF STATE RESIDENTS
If a person is domiciled in a state other than Pennsylvania or another country and works in the City of Pittsburgh, that person is subject to a City Earned Income Tax of 1%.

NON-RESIDENT EMPLOYERS
Any non-resident employer (employer outside of Pittsburgh, but within Pennsylvania) who employs residents of the City or Mt. Oliver Borough MUST withhold the School District of Pittsburgh Earned Income Tax at the rate of 2%. The employer, as a convenience to the employees, may also withhold the City of Pittsburgh Earned Income Tax at the rate of 1%. Combined total, City and School 3%.

IMPORTANT NOTICE
Employers who are liable for withholding $200.00 or more a month in City or School Earned Income Taxes from their employees MUST make monthly deposits of the tax withheld.

ACT 511 OF 1965 – APPROVED DECEMBER 31, 1965 – SECTION13-1X(a) - 53 P.S. 6913

ACT APPLICABLE TO CITY TAXES
Any person who fails, neglects or refuses to make any declaration or return required by the Ordinance or resolution, any employer who fails, neglects or refuses to register or to pay the tax deducted from his employees, or fails, neglects or refuses to deduct or withhold the tax from his employees, any person who refuses to permit the officer, or any agent designated by him, to examine his books, records and papers, and any person who knowingly makes any incomplete, false or fraudulent return or attempts to do anything whatsoever to avoid the full disclosure of the amount of his net profits or earned income in order to avoid the payment of the whole or any part of the tax imposed by the ordinance or resolution, shall, upon conviction thereof before any justice of the peace, alderman or magistrate, or court of competent jurisdiction in the county or counties in which the political subdivision imposing the tax is located, be sentenced to pay a fine of not more than five hundred dollars ($500.00) for each offense, and costs , and in default of payment of said fine and costs to be imprisoned for a period not exceeding thirty (30) days.

ACT OF AUGUST 24, 1961 – P.L. 1135 – NO. 508 – SECTION 10(a) – 24 P.S. 588, 10(a)

ACT APPLICABLE TO SCHOOL DISTRICT TAXES
Any person who fails, neglects or refuses to make any declaration or return required by this act; any employer who fails, neglects or refuses to register, make deductions, or to pay the tax deducted from his employees; any person who refuses to permit the Treasurer or any agent designated by him to examine books, records and papers; and any person who makes any incomplete, false or fraudulent return or attempts to do anything whatsoever to avoid the full disclosure of the amount of his net profits or earnings to avoid the payment of the whole or any part of the tax imposed by this act, shall be guilty of a misdemeanor, and upon completion thereof, shall be sentenced to pay a fine of not more than five hundred dollars ($500.00) or to undergo imprisonment for not more than six (6) months.

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PGH-40 REFUNDS

RETURNS THAT CLAIM AN OVERPAYMENT MUST HAVE THE FOLLOWING INFORMATION COMPLETED:

• Residency status classification completed.
• All supporting schedules included.
• Non-residents or part-year residents of the City of Pittsburgh who are residents of Pennsylvania, must have the NON-RESIDENT EXEMPTION CERTIFICATE, FORM WTEX, signed by the local tax collector (see back of return).
• Part-year residents of Pittsburgh who came from or went to another State must include a copy of both State Income Tax returns.
• Non-residents of Pennsylvania must include a copy of their VISA or out of State Income Tax return. If your State does not have an income tax, include appropriate proof of residency. If you were a part-year resident of Pennsylvania you also need to include a copy of your State Income Tax return.
• All information on the tax return should be completed. You must enter your SSN(s).
• The tax return must be signed. If filing a joint return, BOTH must sign. The appropriate REFUND OR CREDIT area must be checked on LINE 12.
• ALLOW 8 WEEKS before calling the Refund Tracking System to check on your current year PGH-40 refund at 412-393-0167.
• If filed in April allow 10 weeks. You will need the Social Security number and the amount of refund requested on the PGH-40 return.

FAILURE TO COMPLETE THE ABOVE INFORMATION WILL PREVENT PROCESSING OF A REFUND. An overpayment of $2.00 or less will not be paid or credited.

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Some FAQ examples:

Question: Is the personal use of my employer’s automobile taxable?
(We follow the State of PA in determining taxable wages)
Answer: The fair market value of the use of the employer’s car is not taxable compensation.

Question: Are deductions for a cafeteria plan taken before calculating employer withholding tax?
(We follow the State of PA in determining taxable wages)
Answer: Generally, if an employee has deductions from his wages for a cafeteria plan and those deductions are for “health and welfare benefits”, you can reduce the gross wages before calculating the withholding. Examples of allowable deductions would be premiums for health insurance, eye plans, and dental plans. Deductions that are not allowable include retirement contributions and dependent care expenses.

Question: Are contributions to a 401(k) Plan excluded from employer withholding?
(We follow the State of PA in determining taxable wages)
Answer: 401(k) contributions are treated the same, whether made inside or outside a cafeteria plan. Elective payments are considered part of the employee’s taxable compensation and are subject to withholding requirements.

Question: Is third party sick pay taxable?
(We follow the State of PA in determining taxable wages)
Answer: Third Party Sick Pay is not taxable.
You should not include this as part of the employees’ wages.

Question: Based on Act 166 for the year 2003, can I get a refund prior to 2003?
Answer: No, employee business expenses were more limited in prior years. These expenses were seen to be expense items on the profit and loss statement of your employer. Overnight travel, meals and lodging were considered expenses of the employer. If your employer didn’t reimburse you for an assignment you could deduct these expenses. Full Time Outside Salesmen were considered quasi self employed and therefore all of their business expenses were considered to generate revenue.

Question: Should an employer withhold tax on group term insurance policies purchased for employees?
(We follow the State of PA in determining taxable wages)
Answer: These payments are NOT compensation. PA and Pittsburgh do not have a threshold ($50,000, for IRS purposes) above which life insurance premiums become taxable.

Question: Should healthcare benefits received by shareholders in a PA-S Corporation be added to their federal Wages?
(We follow the State of PA in determining taxable wages)
Answer: If the “owner” is the owner of a sole proprietor or a partnership, any benefits that the owner receives from the business are not deductible or must be considered to be a distribution because an owner cannot be an “employee”.
Then, based on the law, if the “owner” is a shareholder in an S Corporation, a shareholder can be treated as a “regular” employee so the benefits aren’t taxable. However, if the
“owner” is considered a “highly compensated employee” with an enhanced benefit package, the enhanced benefits are taxable.

Question: Are employee stock options taxable?
(We follow the State of PA in determining taxable wages)
Answer: Employee stock options are considered to be received when the option is exercised, exchanged, sold, or otherwise disposed. The difference between the fair market value of the stock on the date of exercise and the amount paid by the employee to obtain the option, if any, is the amount subject to tax.

Question: What is PINP on the “Notice of Delinquent Tax Statement”?
Answer: PINP equals underpayment of estimated tax. The law provides a penalty for underpayment of estimated tax. Since 1965, City ordinances (now Pittsburgh Code Chapters 245.03 & 246.03) and School District Legislation have provided that an amount
equal to seventy-five percent (75%) of the eventual liability must be paid in quarterly installments with the last installment due in January.

The only exception to the 75% rule is when an amount equal to the entire liability for the previous year is paid in quarterly installments by January. When such payments have not been made, the laws stipulate that penalty and interest shall be assessed. This assessment of penalty and interest is calculated on the amount equal to the difference between what should have been paid and what was actually paid.

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LOCAL SERVICES TAX
(Formerly the Emergency & Municipal Services Tax) & (Formerly the Occupation Tax)

A tax on individuals for the privilege of engaging in an occupation. The Local Services Tax is levied, assessed, and collected by the political sub-division of the taxpayer’s primary place of employment. Rate of tax is $52. The employer is required to withhold the pro-rata share of the tax by dividing $52 by the number of payroll periods established by the employer. See the Exemption Certificate for exclusions.

EMERGENCY AND MUNICIPAL SERVICES TAX
(1-1-2008 replaced by the Local Services Tax, see above)

WHO IS TAXED?
Every individual employed or self-employed working within the City of Pittsburgh. Employers are required to withhold this tax from the earnings of their employees, but the employees are not relieved of liability until the tax is paid. If not paid via withholding, the employee must pay the tax directly to the City Treasurer.

COMMON CREDITS
Pennsylvania law limits total payment by one person to a maximum of $52.00 per year, regardless of the number of employers in a year.

Additional information: 412-255-8821

BUSINESS PRIVILEGE TAX - FAQ

WHO IS TAXED?
Any business, trade or profession carrying on an activity within the City of Pittsburgh. This does not apply to retail or wholesale vending of goods, wares or merchandise, employment for W-2 wages, or activities of a non-profit organization.

WHAT IS TAXED?
Gross income attributable to a business office.

COMMON EXCLUSIONS – receipts attributable to a bona fide out of City office; that portion of receipts attributable to interstate commerce; taxes collected as agent for a governmental body; any aspect of a business which is specifically exempted or excluded by law.

ON THE BUSINESS PRIVILEGE TAX RETURN, SECTION B, WHAT IS THE $20,000.00 EXCLUSION AND WHO GETS IT?
Per City Ordinance #6 of 1996 – Exemption on Gross Annual Receipts, individuals, married couples jointly in business, partnerships and corporations are entitled to ONE exemption from gross receipts. If you file more than one Business Privilege Tax return, you may take the exemption against ONLY ONE of those returns.

• Subtract the $20,000.00 from gross revenue to obtain the taxable revenue.
• You must file a Business Privilege Tax return in order to benefit from the exemption.

WHAT IS THE TAX RATE FOR 2007 THRU 2010?
1 Mill (.001) – the Business Privilege Tax will be phased out by 2010.
2 Mills (.002) – the Business Privilege Tax for 2005 and 2006.

IF YOUR ONLY PERMANENT BONA FIDE OFFICE IS LOCATED IN PITTSBURGH WHAT IS TAXABLE?
All gross receipts for work performed within the State of Pennsylvania should be included in your taxable gross receipts.

DOES AN ON-SITE TRAILER AT A CONSTRUCTION SITE LOCATED OUTSIDE OF PITTSBURGH ALLOW YOU TO EXCLUDE THOSE GROSS RECEIPTS IF YOUR PERMANENT OFFICE IS LOCATED IN PITTSBURGH?
No. Based on the Northwood Construction Company Inc. vs. Upper Moreland Township Supreme Court Case, and other recent court cases, listed below, a temporary on-site trailer used by a contractor is not considered a permanent place of business. You should include the temporary on-site trailers within Pennsylvania in your taxable gross receipts.

IF A CLIENT IS LOCATED IN ANOTHER STATE WHAT IS TAXABLE?
All gross receipts for work performed within the State of Pennsylvania would be taxable. Sub-contract labor performed in another state must be included in the taxable gross receipts. Interstate Commerce is allocated; you do not exclude all the gross receipts.

• Professional fees derived from services billed on an hourly basis may be apportioned by excluding receipts attributable to charges to the client for services you actually performed out-of-state.
  

TAXPAYERS BILL OF RIGHTS click here

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