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Frequently Asked Tax Questions for NBCSD District EIT INFORMATION CONCERNING THE ONE-HALF PERCENT EARNED INCOME TAX LEVIED BY THE MUNICIPALITIES OF BLOOMFIELD TOWNSHIP, HOPEWELL BOROUGH, HOPEWELL TOWNSHIP, WOODBURY BOROUGH, WOODBURY TOWNSHIP, SOUTH WOODBURY TOWNSHIP, AND THE ONE-HALF PERCENT EARNED INCOME TAX LEVIED BY THE NORTHERN BEDFORD COUNTY SCHOOL DISTRICT. On what is the tax levied? Taxable Earned Income Non-taxable earned income Allowable business Expenses Net Profit or (Loss) Whose earned income is taxable? Who is a resident of a School District? Is the tax deducted from wages by employer? What returns must a taxpayer file? Duplicate tax returns To whom and how may tax be paid? Are any employee business expenses allowable in determining the net earned income subject to tax? Who is subject to payment of the Local Services Tax? When is the Local Services Tax to be paid? Who is subject to payment of the Flat Rate Occupation Tax? When is the Flat Rate Occupation Tax to be paid? On what is the tax levied? The tax is on EARNED INCOME only. Taxable Earned Income Wages, salaries, tips, commissions, back pay, bonuses, clergy pay, dependent care assistance programs, employee contributions to deferred compensation plans 401(K), deferred compensation plan district (Pre-retirement), directors or other fees for services, excess business expenses reimbursements, golden parachute payments, group legal services plans, guaranteed wages (minimum guaranteed general partnership profits), holiday pay, honoraria or fellowships (which compensate for services), incentive payments, jury duty pay, mortgage assistance as compensation, non-cash payment for services, military or reserve (except overtime pay, partnership ordinary income, probate executor or administrator fees, profit distributions, real estate or personal property received for services (fair market value) retroactive wage increases, salary advances, severance or sick pay (other than third party sick pay), stand-by-pay, stock bonus plans, stock options, taxes assumed by employer, vacation pay. Non-taxable earned income Alimony, Automobile allowance, athletic facilities, awards, business expense reimbursements, clergy housing allowance, child support, death benefits, disability pay, discounts on merchandise, eating facilities, educational assistance programs, bill benefits, group term life insurance, interest income, life insurance proceeds and settlements, loans to employees, malpractice insurance premiums reimbursement, meals and lodging provided for employer convenience, mileage allowances, active duty military pay, moving expense reimbursement, pension plan distributions received after retirement, employer contributions to profit sharing plans, passive rental income, royalties, scholarships, fellowship stipends, S-corporation net profits, stock dividends, strike benefits, supplemental unemployment benefits, travel expense reimbursement, tuition payments, unemployment compensation, union payments, and workers compensation. Allowable business Expenses An employee may deduct expenses necessarily incurred in the actual performance of their service, for which expenses are not to be nor have been reimbursed by their employer. An itemized statement of the expenses claimed must be furnished to receive credit. If itemized copies of Federal form 2106, PA UE-1 or PA UE-2 is acceptable. You will not be contacted if you fail to provide this information and your credit and/or refund will be denied. Net Profit or (Loss) The net income from the operation of a business, profession, or other activity must be reported even if you sustain a net loss for the year. You must submit copies of all appropriate schedules, federal or state schedule K-1, C or F, etc., as proof of earnings or losses from any business, farming, partnerships, schedule K-1 or rental business activity. Most distributions passed through to a taxpayer by an S Corporation are considered investment income. However, when compensated for services a fair salary commensurate with the services provided by an S-Corp shareholder are taxable. Net profits and net losses should be reported on Line 6 and Line 7 respectively. A persons net loss may not be deducted from their own earned income or their spouses earned income or net profits. Whose earned income is taxable? Only that of INDIVIDUAL RESIDENTS of Bloomfield Township, Hopewell Borough, Hopewell Township, Woodbury Borough, Woodbury Township, and South Woodbury Township. Corporation and partnership income is not taxed directly; however, the income earned by individual officers, employees, partners and owners of business is taxed if the individual resides in one of the municipalities. This is so regardless of where he works, conducts his business, or earns his money. Who is a resident of a School District? A resident is a person who has his fixed, regular, or permanent place of abode in a particular school district to which whenever he is absent he has the intention of returning. Ordinarily, residence is easily determined. In some cases, a question may arise as to whether a person is in fact a resident of the district. Each doubtful case must be decided on its own facts. Consult the Tax Collector. Is the tax deducted from wages by employer? All employers of persons residing in Bloomfield Township, Hopewell Borough, Hopewell Township, Woodbury Borough, Woodbury Township, and South Woodbury Township are to deduct the taxes from wages and salaries and to make a report to the tax collector quarterly. What returns must a taxpayer file? Only a Final Tax Return is required. This form shall be filed on or before April 15 for the preceding year. This form must be filed by all residents, including those who are retired (unless the tax collector already has record of your retirement) or unemployed, as well as residents under 18 years of age with earned income. Blank forms will be mailed to all residents on or about January 1 each year or may be obtained from the Tax Collector. However, failure to receive a Final Tax Return form by mail does not excuse a taxpayer from his responsibility to file it. If any resident does not receive a form he or she should contact the tax collector. Duplicate tax returns. If you receive more than one tax return, please return both tax returns in the same envelope with one return marked duplicate. To whom and how may tax be paid? The Tax Collector designated by the school district is Mrs. Cathy Snider, 152 NBC Drive, Loysburg, PA 16659 Self-employed individuals and those from whom an employer does not deduct the tax will make payments to the Tax Collector. Taxes should be paid by check and may be mailed to the Tax Collector. Make checks payable to Northern Bedford County Tax Office. For the further convenience of the taxpayer and to answer any questions necessary, the office of the Tax Collector, located in the Northern Bedford County School District will be open daily from 8:00-4:00 and from April 12-15 from 10:00-6:00 daily. The office will be closed on Good Friday (April 9, 2010). Phone 766-2221 ext 4708. csnider@nbcsd.org Are any employee business expenses allowable in determining the net earned income subject to tax? Only limited employee expenses are allowed. These are the expenses entered on Form 2106 with certain exceptions. Allowable expenses: An employee may deduct expenses necessarily incurred in the actual performance of his services, for which expenses are not to be nor has been reimbursed by their employer, provided that such expenses must be recognized by the federal authorities for income purposes and that the employee shall furnish an itemized statement of the expenses claimed. Expenses, i.e. mileage in commuting will not be permitted. Only overnight stays will qualify for computing mileage. Pennsylvania UE Form may not be used for deducting expenses on a local return. Only those expenses allowed on a federal 2106 are allowed. IRA and Keough plans are not deductible business expenses. Who is subject to the payment of Local Services Tax? The $10 emergency municipal services tax shall be paid by all persons gainfully employed in the Northern Bedford County School District whether or not they are resident#s of the district provided earned income from such employment and/or self-employment was at least one thousand dollars ($1,000) during the taxable year. When is the Local Services Tax to be paid? Employers are asked to withhold the $10 tax from the employee's pay. Self-employed persons remit payment when they file their local earned income tax between January and April 15 each year. Who is subject to payment of the Flat Rate Occupation Tax? The $10 flat rate occupation tax is not to be confused with the local services tax. The flat rate occupation tax shall be paid by all persons who are residents of the Northern Bedford County School District (regardless of place of employment) provided earned income from such employment and/or self-employment was at least one thousand dollars ($1,000) during the taxable year. When is the Flat Rate Occupation Tax to be paid? The flat rate occupation tax payment is to be remitted when the taxpayer files the local earned income tax between January and April 15 of each year. All information reported will be held in strict confidence, pursuant to the Local Tax Enabling Act, as amended. Separate returns shall be filed by husband and wife, if both are employed. Joint final returns are not allowed. Self-employed individuals and those from whom the employer does not deduct the tax may arrange with the tax collector to pay quarterly, semi- annually, or annually. Penalties for failure to report, false information, enforcement, etc.: See Resolution as adopted by the Board of School Directors (copy attached). A penalty of $10 will be levied each time a check is returned unpaid by the bank. Last Modified on June 1, 2011
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