Business FAQs - Employer Withholding - Residence Tax Withholding
To amend your payroll withholding account, you must use Form 11A - Amended Employer's Municipal Tax Withholding Statement. If you normally file monthly you can only amend your payroll account by filing corrected Forms 11A for each month an error occurred. If you file quarterly, then file a Form 11A for the quarter you wish to correct. A FORM 11A MUST BE FILED FOR EACH PERIOD THAT IS BEING AMENDED.
Generally, amended returns must be filed within three (3) years from the original filing date.
Note: If you have overwithheld for your employees for years prior to the current year, each employee should request a refund using Form 10A - Application For Municipal Income Tax Refund. For Tax Year 2020 Only - Please see additional instructions related to COVID-19 refunds.
How can I determine how much to withhold for employee' residence tax purposes for RITA member municipalities?
Step 1. Compare the workplace tax rate to the credit rate of the taxpayer's resident municipality. If the workplace tax is greater than or equal to the credit rate, use the credit rate percentage. If workplace tax rate is lower, use the lower rate.
Step 2. Multiply the rate from step 1by the credit factor of the resident municipality.
Step 3. Subtract the amount calculated in step 2 from the tax rate of the resident municipality.
The remaining value is the percentage of the individual's gross wage to be withheld for their residence municipality for residence tax purposes.
No employer withholding extension requests will be granted.
No. RITA Rules and Regulations state that, "A person who employs domestic help for such person's private residence shall not be considered an employer of the domestic for municipal income tax withholding purposes, and shall not be required to withhold and/or remit municipal income tax on behalf of the domestic help."
The Rules and Regulations can be viewed on each Municipalities' page listed at RITA Municipalities.
As a general rule, most RITA municipalities do not require tax to be withheld on employees under age 18.
NOTE: Exceptions to the 18 years of age or under exemption exist. For more information, visit the RITA Municipalities list, and click on your municipality and select the Special Notes section that relates to the appropriate tax year.
Workplace tax refers to a tax paid to a municipality in which an employee works, regardless of where that employee lives. Residence, or courtesy withholding, is a tax paid to an employee’s resident municipality for work performed outside that municipality. Residence tax is withheld in addition to the workplace withholding tax, if any.
Note: If an employee works from home or lives and works in the same municipality, the tax should be reported to RITA as workplace and the wages should be included in the wage amounts listed on the form. No wages should be provided for any residence tax reported. For Tax Year 2020 Only - Please see additional instructions related to COVID-19 refunds.
If your company employs field employees such as delivery drivers, construction workers, and home health aides, etc., special rules may apply. Please contact the RITA Business Department at 800.860.7482 ext. 5003.
Employers issuing 250 or more Forms W-2, 1099-MISC and/or 1099-NEC during a calendar year must file electronically using RITA's W-2 Reporting Specs. For electronic submission, you are required to validate your EFW2 file to ensure compliance with RITA's W-2 Reporting Requirements.