Tax Refund Opportunity for Philadelphia Residents Working Outside PA

Posted on Thu, Mar 23, 2017 ©2021 Drucker & Scaccetti

20160902_164218.jpgBy: Rosalind W. Sutch, CPA & Chris Catarino, CPA

 

Taxpayers residing in Philadelphia and working outside of Pennsylvania (full or part-time) may be eligible for a refund of their Philadelphia Wage Tax. This refund opportunity recently became available due to a far-reaching U.S. Supreme Court decision, explained further below. Accordingly, many taxpayers, employers, and non-local tax practitioners are not aware of this opportunity.

 

Here is a link to four examples of how Philadelphia residents working outside of PA may be affected. While the examples show the effect of one tax year, four tax years remain open for refunds (2013-2016).  There is a high likelihood you are due a refund if you lived in Philadelphia and worked in DE or NY during any of these years.

 

E-mail us at PhilaRefunds@taxwarriors.com if you believe you may be due a refund from the City of Philadelphia.  We can review your case, quantify your refund(s), and guide you through the refund process.  Keep in mind, the statute of limitations expires on April 15, 2017, for the 2013 tax year - after this time, the city will not accept 2013 refund claims.

 

Background

On May 18, 2015, the U.S. Supreme Court issued its opinion in Wynne v. Maryland Comptroller of TreasuryWynne holds that Maryland’s failure to allow its resident taxpayers to claim a credit against the local portion of Maryland’s state and local income tax was an unconstitutional violation of the commerce clause.

 

This decision has ramifications in Philadelphia, where the City does not allow its residents to claim a credit against its Wage Tax for taxes paid to other states.  We believe the City’s position is incorrect with respect to denying credits for taxes paid to other states and numerous taxpayers stand to benefit from filing refund petitions and joining the group of adversely affected taxpayers that we are assembling to challenge the City.

 

Further, the city only recently began allowing a credit for taxes paid to localities outside Pennsylvania.  Many taxpayers are not aware they can claim a credit for taxes paid to other localities for tax years prior to 2016 and may benefit from filing refund petitions for these credits as well.

Topics: Supreme Court, refund, New York, Pennsylvania, Philadelphia Wage Tax, Residents, Wynne v. Maryland Comproller of Treasury, Delaware

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