Penalty, interest on local income taxes filed after April 15 waived for 80+ Allegheny County communities
Apr. 15—An organization representing nearly two dozen Allegheny County school districts in the north hills, east suburbs and Sewickley and Allegheny valleys is waiving the penalty and interest for local earned income taxes that are filed after the April 15 filing deadline.
The coronavirus pandemic prompted the U.S. Internal Revenue Service and the state Department of Revenue in March to extend the income tax filing deadline to May 17.
But those decisions did not cover local taxing bodies, according to John Lazzaro, chief council for the Keystone Collection Group, which handles income tax collection for the Allegheny North and the Allegheny Southwest tax collection committees.
Lazzaro noted in a letter to members of the tax collection committees that while a measure is working its way through the state legislature to adjust the local tax deadline to mirror the changes made by the state and federal governments, the bill will not be taken up until after lawmakers reconvene in Harrisburg on April 19.
He said the decision to waive the penalty and interest on late tax filings was made at the suggestion of the state Department of Community and Economic Development, which urged local taxing bodies to "explore alternatives to waive interest and/or penalties for local tax filings that are made on or before May 17."
The Pennsylvania Department of Revenue addressed the question of when to pay local income taxes in an April 15 news release issued to remind taxpayers about the deadline extension for filing state income tax returns.
"Pennsylvanians should check with their local taxing authorities to determine whether an extension has been granted," revenue department officials said. "The Department of Revenue does not have the authority to extend tax filing deadlines on the local level."
Lazzaro said taxpayers who live in school districts represented by the Allegheny North and the Allegheny Southeast tax collection committees are already covered by the filing extension.
The Allegheny North Tax Collection Committee is comprised of the Allegheny Valley, Avonworth, Deer Lakes, Fox Chapel, Hampton, Highlands, North Allegheny, North Hills, Northgate, Pine-Richland, Quaker Valley and Shaler school districts. There are 48 municipalities in those 12 school districts.
The Allegheny Southwest Tax Collection Committee covers the East Allegheny, Elizabeth Forward, Gateway, McKeesport, Penn Hills, Plum, Riverview, South Allegheny, Wilkinsburg and Woodland Hills school districts spanning 34 municipalities.
Shaler manager Tim Rogers, who chairs the North tax collection committee, said extending the date is important to help reduce confusion among taxpayers.
"People typically have someone prepare all of their taxes at one time," he said. "So it can be a bit of a hardship if they have to get someone to do their local taxes and then do it a second time to pay their state and federal taxes next month, which is totally unnecessary. I think this is a good resolution to that problem."
Taxpayers who fail to pay their taxes after the new May 17 deadline face a 1% per month penalty plus interest, which is set each year. The interest rate on delinquent payments was set at 4.177% last year, according to Lazzaro.
The way local income taxes are collected changed in 2012, when Act 32 required employers in Pennsylvania to withhold the tax from employees' paychecks and submit the payments to a single tax-collecting agency in each county with the exception of Allegheny, which has four tax collection districts.
Philadelphia County is exempt from the earned income tax, which typically is 1% and is split evenly between a municipality and the school district.
Allegheny County's other tax collection districts — Allegheny Central and Allegheny Southwest — use Jordan Tax Services to handle collections.
Representatives from Jordan could not be reached to determine if, or when, its member school districts and municipalities will offer a waiver on penalty and interest for taxes paid after April 15.
Tony LaRussa is a Tribune-Review staff writer. You can contact Tony at 724-772-6368, tlarussa@triblive.com or via Twitter .
