If you live in Pennsylvania and earn wages, salary, or business income, you almost certainly have to file local taxes in PA. The state’s Earned Income Tax (EIT) requires an annual return from residents with earned income, and that return is due April 15 even when your employer withheld the tax from every paycheck. The return reconciles what came out of your checks against what you actually owe.
Who Has to File
The EIT applies to your gross earned income and net profits: wages, salaries, commissions, bonuses, and income from a business you run. Your home address sets your rate, even if you work elsewhere in the state. Rates generally run from about 1% to just under 4%, combining the municipal and school district portions.
What isn’t earned income doesn’t get taxed locally. Social Security benefits, retirement and pension distributions received after retirement age, unemployment compensation, interest and dividends, alimony, child support, inheritance, and employer-paid disability payments under occupational disease legislation all sit outside the EIT.1Pennsylvania Department of Revenue. PA Personal Income Tax Guide – Gross Compensation Someone retired and living entirely on Social Security and pension income likely owes no local EIT at all, and has nothing to file.
Everyone else with earned income files, regardless of whether their employer withheld correctly. Employers with Pennsylvania worksites are required to withhold EIT and send it to the appropriate collector,2PA Department of Community & Economic Development. Local Income Tax Requirements for Employers but the withholding does not replace the return. If the numbers match, the return confirms them. If they don’t, the return settles up.
The Two Local Taxes Behind the Return
Two taxes show up on most Pennsylvania paychecks. The EIT is the percentage tax on earned income described above, filed annually by residents. The Local Services Tax (LST) is a flat annual tax capped at $52 combined, based on your work location rather than your home, and typically deducted in small increments across pay periods.3PA Department of Community & Economic Development. Local Services Tax (LST) Workers earning less than $12,000 from all sources in a jurisdiction that charges more than $10 LST must be exempted, as are military reservists called to active duty and certain disabled veterans.
If You Live or Work in Philadelphia
Philadelphia sits outside the system that governs the rest of the state. The city runs its own Earnings Tax (commonly called the wage tax) on all wages earned by Philadelphia residents wherever they work, and on non-residents working within city limits. As of July 2025, the resident rate is 3.74% and the non-resident rate is 3.43%.4City of Philadelphia. Earnings Tax (Employees) Philadelphia residents deal with the Philadelphia Department of Revenue for their local income tax, not a county-level tax collection district.5PA Department of Community & Economic Development. Local Tax Collector Employers withhold automatically, but self-employed people and anyone whose withholding was off may still need to file directly with the city.
The April 15 Deadline
Your annual local EIT return is due April 15 following the tax year, matching the federal and state deadline.6Department of Revenue. Brief Overview and Filing Requirements Here is the trap: a federal or state filing extension does not extend your local deadline. Even with extra time from the IRS or the Pennsylvania Department of Revenue, your local return is still due April 15. Filing late without a separate local extension can trigger penalties.
Most local tax collectors accept returns through online portals, though paper forms remain available.
Quarterly Payments if You’re Self-Employed
If you earn income that isn’t subject to employer withholding, you owe quarterly estimated EIT payments due April 15, June 15, September 15, and January 15 of the following year. Report net profits on the collector’s form using the same net income figure from your Pennsylvania personal income tax return. Skipping estimated payments can add underpayment penalties to whatever tax you owe.
If You Live and Work in Different Municipalities
Plenty of Pennsylvania workers commute across jurisdictional lines, which brings two EIT rates into the picture. Your employer withholds at the rate for your work location. When you file your annual return with your home municipality’s collector, you get a credit for taxes already withheld at work. If your home rate is higher, you owe the difference. If your work rate equals or exceeds your home rate, you generally owe nothing more.
Mistakes cluster here, especially for anyone who changed jobs or moved during the year. Confirm your employer has the correct Political Subdivision (PSD) codes for both your home and work addresses. A wrong PSD code sends your money to the wrong collector and creates a mess at filing time.
Finding Your Rates, PSD Code, and Collector
Outside Philadelphia, Act 32 of 2008 consolidated local tax collection into county-based Tax Collection Districts. Every address has a six-digit PSD code: the first two digits identify the Tax Collection District (usually the county), the first four identify the school district, and all six pinpoint the municipality.7PA Department of Community & Economic Development. PSD Codes and EIT Rates
The Pennsylvania Department of Community and Economic Development runs an online Address Search Application that returns PSD codes, current EIT rates, and LST rates when you enter your home and work addresses.7PA Department of Community & Economic Development. PSD Codes and EIT Rates DCED also publishes a downloadable directory of local income tax collectors organized by Tax Collection District, which tells you exactly who to contact and where to file.5PA Department of Community & Economic Development. Local Tax Collector
What Happens if You Don’t File
Skipping the return isn’t a free bet. Local collectors pursue non-filers, and Pennsylvania’s state-level late-filing penalty runs 5% of unpaid tax per month, up to 25%.8Pennsylvania Code and Bulletin. Pennsylvania Code 121.26 – Penalties for Failure to File or for Filing a Late Return Local collectors can add their own late fees on top of interest on unpaid balances. A common structure is a flat per-return fee plus daily interest, though specifics vary by collector.
Ignoring a delinquency notice makes things worse. Collectors can hand accounts to collection agencies, file liens, or pursue legal action. If you realize you missed a filing, reach out to your local collector directly. Many will set up a payment arrangement, particularly if you contact them first.
Appealing an Assessment
If a tax assessment looks wrong, Pennsylvania’s Local Taxpayers Bill of Rights gives you 90 days from the assessment notice date to file a petition for reassessment with the local taxing authority. The petition must be postmarked or physically received by the deadline.9PA Department of Community & Economic Development. Manual for Local Taxpayers Bill of Rights and Real Property Taxpayer Programs
The appeals board or hearing officer then has 60 days to decide. If they miss that window, your petition is automatically deemed approved. An adverse decision can be appealed to the court with jurisdiction over local tax matters within 30 days.9PA Department of Community & Economic Development. Manual for Local Taxpayers Bill of Rights and Real Property Taxpayer Programs
Refund denials follow a different clock. You can file a petition within three years of the return’s due date or one year after you actually paid, whichever is later. Once the petition is complete, the same 60-day decision timeline applies.