To file local taxes in Pennsylvania, complete a Taxpayer Annual Local Earned Income Tax Return and submit it to the Act 32 certified tax collector for your home district by April 15. The return goes to your local collector, not to the Department of Revenue, and you have to file it even if your employer already withheld the full amount from your paychecks. Your rate and where your money is routed are both tied to a six-digit Political Subdivision (PSD) code assigned to your home address.
Every Pennsylvania resident with wages, salaries, commissions, tips, or net business profits owes this return each year. Withholding alone does not satisfy the obligation the way it can with federal tax. The only people exempt are those with zero earned income for the year. Investment income, interest, dividends, Social Security, pensions, and rental income are not subject to the local earned income tax, so a retiree whose only income is from those sources generally owes nothing and has nothing to file.
Step 1: Look Up Your PSD Code and Rate
Your PSD code identifies both your municipality and your school district for tax purposes, and the sum of those two rates is your total local earned income tax rate. Combined rates range from about 1% in many communities to over 3% in some urban areas. The Department of Community and Economic Development (DCED) runs a Tax Finder tool where you enter your home and work addresses to pull up both codes and the rates attached to them.1PA Department of Community & Economic Development. Local Income Tax Information
Get this right before you start filling anything in. Using the wrong PSD code routes your payment to the wrong jurisdiction and can trigger administrative corrections along with interest on the amount that went to the wrong place.2PA Department of Community & Economic Development. Local Withholding Tax FAQs
Step 2: Gather Your Documents
Before you open the form, pull together:
- Every W-2 from every employer for the tax year. Box 16 shows your taxable compensation; Box 19 shows any local tax already withheld.
- Any 1099-NEC or 1099-MISC forms for self-employment or contract income.
- The PSD codes for your home and work addresses from the DCED Tax Finder.
- Social Security numbers for yourself and your spouse if filing jointly.
- Business expense records if you are self-employed and deducting against gross revenue.
Independent contractors and 1099 earners whose income had no local tax withheld are responsible for paying the tax themselves, either in a lump sum at filing or through quarterly estimated payments during the year.
Step 3: Fill Out the Return
The form is the Taxpayer Annual Local Earned Income Tax Return, downloadable from your collector’s website or from DCED.1PA Department of Community & Economic Development. Local Income Tax Information Use the version that matches the tax year you are filing, not the current year.
Enter your total compensation from Box 16 of each W-2, your home and work PSD codes in the designated fields, and the local tax already withheld from Box 19. If you are self-employed, add your net profit (gross revenue minus ordinary and necessary expenses) in the appropriate line. The form walks you through comparing your total liability against what was already withheld so you know whether you owe a balance or are due a refund.3PA Department of Community & Economic Development. Taxpayer Annual Local Earned Income Tax Return
Step 4: Submit It to Your Collector
Your return goes to the Act 32 certified tax collector assigned to your home district. Keystone Collections Group and Berkheimer Tax Innovations handle the vast majority of Pennsylvania’s collection districts; look up yours on the DCED website.4PA Department of Community & Economic Development. Local Income Tax Collector
Online
Most collectors offer an online portal that lets you complete, sign, and submit the return electronically. The signature is usually a typed name plus a certification checkbox. If you owe a balance, the portal accepts bank transfer or credit card. Save the confirmation number at the end. That is your proof of filing.
By Mail
Paper returns go to the address on your collector’s website for your district. Include copies of all W-2s and any supporting documents. A postmark by the filing deadline counts as timely, but certified mail or a tracking service gives you something to point to if the arrival date is ever disputed.
When It’s Due and What Happens If You’re Late
The annual return is due April 15, the same date as your federal and state returns. For 2025 tax year returns, the deadline is April 15, 2026.5Pennsylvania Department of Revenue. 2026 State Tax Due Date Reference Guide (DPO-05)
A federal or state extension also extends your local filing deadline, but you have to check the extension box on the front of the local return and still submit the form with an estimated payment by April 15.3PA Department of Community & Economic Development. Taxpayer Annual Local Earned Income Tax Return The extension buys time to finish the paperwork, not time to pay. Interest accrues on any amount unpaid after April 15.6Commonwealth of Pennsylvania. Extension of Time to File Personal Income Tax Returns
Miss the deadline and the penalty is 5% of the tax owed, with another 5% added for each additional month or partial month late, capped at 25%. The minimum penalty is $5 regardless of how small the balance. Interest runs on the unpaid balance from the original due date. You can avoid the penalty by showing reasonable cause rather than willful neglect, but collectors apply that exception narrowly.7Pennsylvania Code and Bulletin. Pennsylvania Code 61 Chapter 121 – Penalties for Failure to File or for Filing a Late Return
If You’re Self-Employed: Quarterly Estimates
Income not subject to employer withholding often has to be paid in during the year through quarterly estimated payments to your local collector rather than in a single April lump sum.8Keystone Collections Group. Taxpayer Annual Local Earned Income Tax Return Instructions For context on scale, Pennsylvania requires estimated state income tax payments for 2026 when you expect to owe at least $430 after withholding and credits, which lines up with roughly $14,000 in income not subject to withholding.9Commonwealth of Pennsylvania. 2026 Instructions for Estimating PA Personal Income Tax Local collectors follow the same quarterly schedule:
- April 15, 2026 — first quarter (25%)
- June 15, 2026 — second quarter (25%)
- September 15, 2026 — third quarter (25%)
- January 15, 2027 — fourth quarter (25%)
Most collectors accept quarterly payments online or by mailed voucher. If self-employment income starts mid-year, the remaining installments absorb the earlier quarters, so someone who starts in July splits the full estimated liability between the September and January deadlines.
Credits That Can Lower What You Owe
Philadelphia Wage Tax
Philadelphia runs its own wage tax under the Sterling Act, outside the Act 32 system. If you live outside the city but your employer withheld Philadelphia’s non-resident wage tax, you can claim a credit for that amount on your local return. Enter the Philadelphia wage tax paid on Line 12 of the Annual Local Earned Income Tax Return and attach the W-2 or other documentation showing the amount. The credit is capped at your local tax liability, and no refund is issued for any overpayment to Philadelphia through this credit.10Keystone Collections Group. How Do I Receive Credit for the Wage Tax I Paid to Philadelphia
If you live in Philadelphia, the city wage tax applies to all of your earnings and is filed with the city rather than through an Act 32 collector.
Income Taxed by Another State
If you paid income tax to another state on earnings from work there, you may be able to credit part of that payment against your Pennsylvania local tax. The credit equals the lesser of what is left after applying the out-of-state tax against your PA state income tax, or your local tax liability on the out-of-state income. The Out-of-State Tax Credit Worksheet in the return packet does the math.11Keystone Collections Group. How Do I Receive Local Credit for Income Tax Paid to Another State
No credit is allowed for income tax paid to a state that has a reciprocal agreement with Pennsylvania: Maryland, New Jersey, Ohio, Virginia, West Virginia, and Indiana. If tax was withheld by one of those states by mistake, you have to request a refund from that state rather than claim a credit here. Taxes paid to foreign countries also do not qualify for the credit.11Keystone Collections Group. How Do I Receive Local Credit for Income Tax Paid to Another State
If You Moved During the Year
Move from one school district to another mid-year and your local liability is prorated between the two based on how long you lived at each address. You are responsible for making sure the right amounts land in the right jurisdictions. Notify your employer by the 15th of the month before the move so withholding switches to your new district the following month; miss that window and withholding keeps going to the old district until the next cycle.
Fixing a Mistake After You File
If you spot an error later, use the same Annual Local Earned Income Tax Return form, check the “Amended Return” box, correct the figures, and send it in with any updated W-2s or supporting documents.12Keystone Collections Group. Local Earned Income Tax Annual Final Return If you are also amending your state PA-40, file both at the same time so the records stay consistent.8Keystone Collections Group. Taxpayer Annual Local Earned Income Tax Return Instructions