How to Fill Out Form CLGS-32-1: Pennsylvania Local Earned Income Tax Return

To fill out Form CLGS-32-1, Pennsylvania’s Taxpayer Annual Local Earned Income Tax Return, you report your wages and any business profits, multiply the total by your local tax rate, subtract what your employer already withheld, and send the signed form with copies of your W-2s to the tax collector for the district where you live. It is due April 15, and every resident of a taxing jurisdiction files one, even if the withholding was exact or there was no earned income at all.¹

What You Need Before You Start

Three things sit at the center of the return: who you are, where you live for tax purposes, and what you earned.

For identification, you need your Social Security number, your full name, and the physical address of your primary residence in the taxing district. If you moved during the year, have both addresses ready along with the dates you lived at each. Your tax obligation follows where you live, not where you work, and the form has fields to split income between jurisdictions for a part-year resident.

Next, look up your PSD code and your local earned income tax rate. The Political Subdivision code is a six-digit number that routes your payment to the right municipality and school district: the first two digits identify the Tax Collection District, the first four the school district, and all six the specific township, borough, or city.² The DCED’s address search tool at apps.dced.pa.gov returns both your home and work PSD codes along with the resident and nonresident rates for each.³ If the tool does not return results, the full PSD code list is available for download from the same DCED page.

Then pull your income documents:

Each W-2, with attention to Box 18 (local wages) and Box 19 (local tax withheld). If Box 18 is blank on any W-2, use Box 16 (state wages) in its place.
Any 1099s for freelance, contract, or miscellaneous income.
PA Schedule C, E, F, or K-1 for business, rental, farm, or partnership income.
PA Form PA-UE, but only if you are claiming unreimbursed employee business expenses.

Legible photocopies are fine. Do not send originals.¹

Wage Lines: 1 Through 4

Line 1 – Gross Earnings. Add up Box 18 from every W-2 and enter the total. Where Box 18 is blank, substitute Box 16. Taxable wage income includes salaries, commissions, bonuses, tips, stipends, incentive pay, employee retirement contributions, vacation and sick pay, jury duty pay, and any compensation received as property (valued at fair market value).¹

Some categories of income are not taxed here and should never appear on Line 1: dividends, interest, capital gains, pension and retirement income (except early distributions), Social Security, public assistance, unemployment, active-duty military pay, and clergy housing allowances.¹

Line 2 – Employee Business Expenses. Enter the deductible amount from a completed PA Form PA-UE. Most filers put zero.

Line 3 – Other Taxable Earned Income. Any earned income that did not land on Line 1 and is not going on Line 5. Not dividends, interest, or capital gains.

Line 4 – Total Taxable Earned Income. Line 1 minus Line 2, plus Line 3.

Business Income Lines: 5 Through 7

Line 5 – Net Profits. Total net profit from all business activity. Attach the applicable PA schedules (C, E, F, or K-1) and any 1099s.

Line 6 – Net Losses. Total net loss from business activity. Two rules cause most of the errors on this line. A business loss cannot offset your W-2 wages on Line 1. And S-Corporation pass-through income is not taxable, so an S-Corp loss is not deductible here either. A loss from one business can, however, offset profit from another. From Schedule E, only short-term rental income and royalty income are taxable; other Schedule E items are not.¹

Line 7 – Total Taxable Net Profit. Line 5 minus Line 6. If negative, enter zero.

Tax Calculation and Withholding

Line 8 – Total Taxable Income. Add Lines 4 and 7.

Line 9 – Tax Liability. Multiply Line 8 by your combined resident tax rate (municipality plus school district). The DCED address tool shows this rate for your home address.³

Line 10 – Tax Withheld. Add up Box 19 from your W-2s. There is one exception: if you worked in a municipality whose nonresident rate is higher than your home’s resident rate, you cannot claim the full Box 19 amount on Line 10. Complete the nonresident withholding worksheet on the back of the form and enter the reduced figure instead.¹

The remaining lines compare Line 9 with Line 10. If Line 9 is larger, you owe the difference. If Line 10 is larger, you overpaid, and the form lets you choose between a refund and a credit applied to next year’s tax.

The Nonresident Withholding Worksheet

Use the DCED tool to check the resident rate at your home address against the nonresident rate at your work address. If the work rate is higher, the worksheet applies to you. If it is not, skip the worksheet and take the full Box 19 total on Line 10.³

For each W-2, the worksheet asks for the local wages, the tax withheld, your resident rate, and the nonresident rate where you worked. Subtract the resident rate from the nonresident rate, multiply that difference by the local wages, and subtract that product from the amount withheld. The result is your allowable credit, and it goes on Line 10.¹

Where to Send the Form

Pennsylvania does not collect local earned income tax through a single state agency. Each Tax Collection District has its own collector, often a private firm such as Berkheimer Tax Administrator, Keystone Collections Group, or Jordan Tax Service. Your collector is determined by where you live.⁴ The DCED address tool returns your assigned collector along with contact details.³

To mail the return, print and sign the form, attach photocopies of every W-2, 1099, and PA schedule that supports the figures, and send the package to your collector. Use a trackable mailing method: without a delivery record, you have no proof of a timely filing.

Most collectors also run an online portal. You enter the same information you would put on the paper form, upload PDFs of your supporting documents, and pay by card or bank transfer. The portal issues a confirmation number after submission; keep it as your filing receipt. The portal interface varies by firm, so check the specific collector’s website.

Deadline, Extensions, and What Late Filing Costs

The return is due April 15 for the prior calendar year. When April 15 falls on a weekend, the deadline moves to the next business day.¹

If you filed a federal or state extension, you can take a six-month local extension by checking the extension box on the front of the form. That buys time to finalize the paperwork, not time to pay. You still send the form and your estimated payment by April 15, and interest starts running on any unpaid balance from that date.¹

Miss the deadline and both interest and a monthly penalty apply to any unpaid tax under the Local Tax Enabling Act.⁵ Penalties can accumulate up to 15 percent of the original tax due. Willfully failing to file, or filing a fraudulent return, can bring fines up to $500 per offense and up to 30 days of imprisonment on conviction. Paying the full liability by April 15 is the only way to stop interest and penalty from accruing, even if you use the extension for the paperwork itself.

Amending a Return You Already Filed

If you amend your federal return and the change affects your earned income, file an amended local return too. Use the same CLGS-32-1 form and check the “Amended Return” box at the top.¹ Attach updated documentation showing the corrected numbers and send it to your local collector. If you owe more, include payment. If the amendment produces an overpayment, the amended return itself is your refund request.

1
Pennsylvania Department of Community and Economic Development. Taxpayer Annual Local Earned Income Tax Return Instructions
2
Pennsylvania Department of Community and Economic Development. PSD Codes and EIT Rates
3
Pennsylvania Department of Community and Economic Development. Find Local Withholding Rates by Address
4
Pennsylvania Department of Community and Economic Development. Local Income Tax Collector
5
Pennsylvania General Assembly. Pennsylvania Local Tax Enabling Act