Upper Darby Earned Income Tax: Filing, Credits, and Penalties

Beginning January 1, 2026, the Upper Darby earned income tax applies at a rate of 1% on the wages, salaries, commissions, and net profits of township residents, no matter where they work, and on non-residents who earn income inside the township. Keystone Collections Group collects the tax, processes returns, and handles enforcement. Most employees will see the 1% withheld automatically from their paychecks; self-employed workers and anyone whose employer does not withhold must file and pay on their own.

Who Owes the Tax

What you owe depends on where you live and where you work.

If you live in Upper Darby and work in Upper Darby, you pay the full 1% to the township.
If you live in Upper Darby and work in another Pennsylvania municipality with an EIT of 1% or higher, your workplace withholding already covers it. Starting in 2026, that revenue is redirected to Upper Darby, and your total rate does not change.
If you live in Upper Darby and work in another Pennsylvania municipality with a lower EIT (or none), you pay the difference so the total reaches 1%, with Upper Darby receiving it.
If you live in Upper Darby and work in Philadelphia, Philadelphia’s wage tax continues to apply and the city keeps that revenue by state law. Because Philadelphia’s non-resident wage tax rate is higher than 1%, the credit for tax paid wipes out your Upper Darby liability.
If you live elsewhere but work in Upper Darby, you owe 1% on the income you earn in the township, unless your home municipality already levies an equal or higher rate.

The revenue funds general township operations, including road maintenance, fire services, and other public safety costs. The full 1% currently goes to the township’s general fund; the Upper Darby School District has not imposed its own EIT.¹

What Income Is Taxed

The tax covers compensation for work: wages, salaries, commissions, bonuses, and similar payments, plus the net profits of a business you run yourself.²

Several common sources of income are not taxed. Social Security benefits, pensions, interest, dividends, capital gains, unemployment compensation, and public assistance are all excluded. If your income comes only from these sources, you do not owe this tax.¹

How to File Your Annual Return

Keystone Collections Group is the authorized collector. File the Taxpayer Annual Local Earned Income Tax Return (form CLGS-32-1) through Keystone’s online portal or by mail.³ The deadline is April 15, and any balance owed is due the same day.²

Have the following ready before you start:

Your W-2 forms. Box 18 shows your local wages, and copies of all W-2s should be attached to the return.
1099-NEC forms and any PA Schedules, if you are self-employed and reporting net profits.
Your Political Subdivision (PSD) code. This tells Keystone which municipality and school district receives your payment. Based on Pennsylvania Department of Community and Economic Development records, the PSD code for Upper Darby Township within the Upper Darby School District is 231303. Confirm the code on the DCED website before filing.⁴

Keystone’s e-file system lets you schedule payment and gives you a submission confirmation. If you mail the return, send it with payment to the address on the form instructions and keep a copy.

Quarterly Payments for the Self-Employed

If you are self-employed, paid on a 1099, or work outside Pennsylvania for an employer that does not withhold the tax, you cannot wait until April. Upper Darby requires quarterly reporting and payment.²

First quarter (January through March): April 30
Second quarter (April through June): July 31
Third quarter (July through September): October 31
Fourth quarter (October through December): January 31 of the following year

Even if you had no taxable income in a quarter, file a $0 estimate. Interest on any amount owed at year-end is calculated as if payments should have been spread across all four quarters, so a skipped quarter in which you did owe can trigger interest later. You still file the annual return by April 15 to reconcile.

Credit for Tax Paid to Another Municipality

Pennsylvania law prevents the same dollar of earned income from being taxed twice. If your workplace municipality levies an EIT and your employer withholds it, you receive a credit against your Upper Darby liability. When the workplace rate is 1% or higher, the credit covers your entire township obligation.¹

The same principle applies to Philadelphia. Upper Darby residents who work in the city can credit Philadelphia wage tax against the 1% local EIT. Report the credit on Line 12 of the annual return and attach your W-2 or other proof of the Philadelphia tax paid.⁵ The credit cannot exceed your local tax liability, no refund is issued for amounts overpaid to Philadelphia, and the credit cannot be transferred to a spouse or carried to a future year.

If You Moved In or Out During the Year

Part-year residents owe the township’s EIT only for the months they actually lived in Upper Darby. Someone who lived in the township from January through August pays 1% only on income earned during those eight months.⁶

File a return marked as a part-year resident, and complete the part-year schedule on the back of the form listing the months you lived in each municipality, with supporting documentation. You may need to file separate returns for each municipality where you lived during the year.

Penalties for Late Filing or Non-Payment

Under the Local Tax Enabling Act, unpaid earned income tax accrues a penalty of 1% of the outstanding balance for each month or partial month it remains unpaid, up to a maximum of 15%. Interest also accrues at the rate Pennsylvania sets annually under The Fiscal Code, which has historically run around 6%.⁷

The consequences are not only financial. Failing to file, filing a false return, or refusing to let the tax officer examine records can result in a fine of up to $2,500 per offense and up to six months in jail.⁷

There is no statute of limitations for years you never filed. The three-year lookback period that normally limits assessments only starts running once a return is filed, so a year you skip entirely remains open indefinitely.⁸

Filing Extensions

If you cannot file by April 15, Keystone Collections Group accepts an extension request through its e-file system.⁹ An extension gives you more time to file, not more time to pay. Tax owed is still due April 15, and penalties and interest begin accruing on unpaid balances after that date even with an approved extension.

1
Upper Darby Pennsylvania. Frequently Asked Questions
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Upper Darby Pennsylvania. Upper Darby Township Earned Income Tax EIT 2026
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Keystone Collections Group. File Your Local Earned Income Tax Return Online
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Pennsylvania Department of Community and Economic Development. PSD Codes
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Keystone Collections Group. How Do I Receive Credit for the Wage Tax I Paid to Philadelphia
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Keystone Collections Group. If I Moved During the Year Do I Have to Pay Local Earned Income Tax
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Pennsylvania General Assembly. Local Tax Enabling Act
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Keystone Collections Group. Recovering Delinquent Earned Income Tax
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Keystone Collections Group. Application for Extension of Time to File Local Earned Income Tax Return