Pennsylvania does not have a state withholding form equivalent to the federal W-4. Because the state charges a flat 3.07% personal income tax on all taxable compensation, employers withhold that percentage automatically and there is nothing for you to elect.1Department of Revenue. Personal Income Tax Rates The one state withholding form most employees will ever touch is Form REV-419, and it exists for the opposite purpose: to stop Pennsylvania tax from being withheld when you qualify for an exemption.
Why There’s No PA Version of the W-4
States with graduated brackets need a form where you declare filing status, dependents, and adjustments so your employer can estimate the right amount to withhold. Pennsylvania’s flat rate removes that math. Every dollar of taxable compensation is taxed at 3.07%, so there is nothing to calculate and nothing to elect.2Commonwealth of Pennsylvania. Personal Income Tax
One consequence catches people off guard: you cannot ask your employer to withhold extra Pennsylvania tax from your paycheck the way you can federally. If you have income that isn’t run through payroll — freelance work, rental income, investment gains — you pay Pennsylvania directly through estimated payments instead.
Form REV-419: The One State Withholding Form You Might File
Form REV-419, the Employee’s Nonwithholding Application Certificate, is Pennsylvania’s only employee-facing state withholding form.3Commonwealth of Pennsylvania. Employee’s Nonwithholding Application Certificate REV-419 Filing it tells your employer to stop withholding Pennsylvania income tax entirely. You have to fit one of three situations to file it.
Tax Forgiveness Eligibility
If you qualified for full Tax Forgiveness last year and got back every dollar of state income tax withheld, or you expect to qualify this year, you can claim exemption. Tax Forgiveness is Pennsylvania’s program for reducing or eliminating income tax for lower-income households. A family of four can earn up to $34,250 and still get some level of forgiveness; a single filer with no dependents hits the ceiling at $8,750. About one in five Pennsylvania households qualifies.4Commonwealth of Pennsylvania. Tax Forgiveness5Commonwealth of Pennsylvania. Tax Forgiveness
Living in a Reciprocal State
If you live in Indiana, Maryland, New Jersey, Ohio, Virginia, or West Virginia and work in Pennsylvania, a reciprocal agreement means Pennsylvania doesn’t tax your wages. You file REV-419 so your employer stops withholding PA tax and starts withholding for your home state instead. The agreements cover most W-2 wage income but do not extend to independent contractor payments, business income, or compensation paid to certain Ohio-resident S corporation shareholder-employees who own 20% or more of the company.6Commonwealth of Pennsylvania. Determining Residency for PA Personal Income Tax Purposes
Military Spouse Exemption
If you’re the spouse of an active-duty servicemember stationed in Pennsylvania and you keep legal residence in another state, federal law (the Servicemembers Civil Relief Act, as expanded by the Veterans Benefits and Transition Act of 2018) may let you claim exemption from Pennsylvania withholding. You have to be in Pennsylvania solely to accompany your spouse under military orders.
How to Fill Out and Submit REV-419
The form runs a single page. You enter your name, Social Security number, and address, then check the box that matches your exemption reason. For Tax Forgiveness, one box covers qualifying last year, another covers expecting to qualify this year. For reciprocal residence, you check the box for your home state. Sign it, date it, and hand it to your employer. It doesn’t go to the Department of Revenue. Your employer keeps it on file and adjusts your withholding.
The Tax Forgiveness exemption has to be renewed every year with a new REV-419. Skip the refile and your employer should go back to withholding the standard 3.07%. Reciprocal-state residents are the exception: once you’ve filed claiming reciprocity, you don’t need to refile every year unless you move to a different state.3Commonwealth of Pennsylvania. Employee’s Nonwithholding Application Certificate REV-419
When to Revoke or Update Your Exemption
If your circumstances change during the year, submit a new REV-419 or revoke the one on file. Common triggers: your income climbs above the Tax Forgiveness limits, you move from a reciprocal state into Pennsylvania, or a military spouse’s situation shifts because the servicemember separates from the military. Once you revoke, your employer starts withholding 3.07% again from that point on.
Letting a stale exemption ride is the expensive mistake. If you claimed an exemption you no longer qualify for and never revoked it, you’ll owe the full year’s Pennsylvania tax when you file your return, plus possible penalties and interest.
What to Do About Income That Isn’t Withheld
Because Pennsylvania won’t let you request additional withholding from your paycheck, estimated payments are how you prepay tax on anything your employer doesn’t run through payroll. If your non-wage income (after subtracting anything already subject to withholding) tops $8,000, you’re generally required to make quarterly estimated payments using Form REV-1630.7Commonwealth of Pennsylvania. Underpayment of Estimated Tax by Individuals REV-1630 Payments come due in four installments, typically mid-April, mid-June, mid-September, and mid-January of the following year.
This also picks up Pennsylvania residents who work in a reciprocal state. If your employer in Indiana or New Jersey withholds for that state and not for Pennsylvania, you owe Pennsylvania directly through estimated payments.7Commonwealth of Pennsylvania. Underpayment of Estimated Tax by Individuals REV-1630
Local Taxes Aren’t Handled by REV-419
State withholding is only half the picture in Pennsylvania. Most employees also have local taxes withheld, and REV-419 has no bearing on any of them. The main ones are the Earned Income Tax (EIT) and, in many municipalities, the Local Services Tax (LST). Both are governed by Act 32 and administered by local tax collectors rather than the Department of Revenue.8PA Business One-Stop Shop. Act 32 and Local Earned Income Tax
EIT rates vary widely across Pennsylvania’s roughly 2,500 municipalities, running from around 0.5% in small communities to close to 4% in Philadelphia. To make sure the right rate is applied, new hires fill out a Residency Certification Form identifying where they live and where they work, since EIT can be split between those jurisdictions.9PA Department of Community & Economic Development. Local Income Tax Requirements for Employers
The LST is a flat annual dollar amount, not a percentage, charged to anyone who works in a municipality that imposes it. Where the LST is more than $10, employees earning less than $12,000 from all sources within that municipality have to be exempted; where the LST is $10 or less, the municipality may choose whether to offer that low-income exemption.10PA Department of Community & Economic Development. Local Services Tax If you think you qualify, ask your employer for the exemption form. The LST does not stop being withheld on its own.