The City of Philadelphia has issued guidance for employees working for Philadelphia-based organizations who have been required to work from their homes outside of Philadelphia due to the COVID-19 pandemic. The key word being “required.” It states:
The City of Philadelphia uses a “requirement of employment” standard that applies to all non-residents whose base of operation is the employer’s location within Philadelphia. Under this standard, a non-resident employee is not subject to the Wage Tax when the employer requires him or her to perform a job outside of Philadelphia including working from home.
A non-resident employee who works from home for his or her convenience is not exempt from the Wage Tax – even with his or her employer’s authorization. On the other hand, if a Philadelphia employer requires a non-resident to perform duties outside the city, he or she is exempt from the Wage Tax for the days spent fulfilling that work.
If your Philadelphia-based employer continues to withhold Philadelphia Wage Tax from your paycheck while you are required to work from your home located outside of Philadelphia, you can request that they stop this withholding until you stop working from home due to the COVID-19 pandemic.
At the end of the 2020 tax year, you will be able to file for a Philadelphia Wage Tax refund. The application form is available here.
If you have questions about this or any other payroll issue, please call us at 215-723-4881 or contact us online.