Legal Alert

Philadelphia Announces Relief for Property and Business Taxes and Provides Wage Tax Guidance for Displaced Workers

March 24, 2020

The City of Philadelphia Revenue Department announced (on its website here) administrative extensions to the due dates for 2020 real estate taxes (originally due March 31, 2020) and 2019 business taxes (originally due April 15, 2020). Additionally, the City confirmed that nonresident employees who are forced to work from home due to the coronavirus crisis and related office closings are not subject to City Wage Tax on the compensation earned for time working out of the City.

Real Estate Tax

City real estate taxes are due on March 31 of each year. While the City is asking taxpayers who can do so to pay their 2020 real estate taxes by March 31, 2020 to allow the City to ensure the continuity of City and School District operations, the City announced that the due date for 2020 real estate taxes now is April 30, 2020. No interest or penalties will accrue if real estate taxes are paid on or before April 30, 2020.

Additionally, the extension applies to seniors and low-income homeowners who need to apply for a payment plan for their 2020 real estate taxes. The City will accept applications for a 2020 payment plan through April 30, 2020.

Business Income and Receipts Tax

The Revenue Department also announced that it will honor the federal payment and filing extensions granted by the IRS and announced that the deadline for filing and payment of the Business Income and Receipts Tax and Net Profits Tax is extended from April 15, 2020 until July 15, 2020. This automatic extension includes estimated payments due on April 15, 2020.

No action is required from businesses to take advantage of this extension but, as is true of real estate taxes, the City is asking anyone with the ability to do so to file business tax returns and to pay business taxes to ensure the continuity of City and School District operations.

City Wage Tax

An employer is required to collect and remit City Wage Tax from (i) all employees who are residents of the City, and (ii) non-resident employees who work in the City. In the past, the City Revenue Department has challenged some remote working programs and has taken the position that, when a nonresident employee works from home for his or her own convenience, he or she should be considered to be working from the employer’s office in the City.

In current circumstances, many employees are forced to work from home because offices and other business locations in the City are closed. Employees who are forced to work outside of the City due to coronavirus-related office and business closures are not doing so for their own convenience. Consequently, an employer is not required to withhold City Wage Tax from compensation paid to nonresident employees for time the employee works from home because of the coronavirus closings and government orders.

We expect the City to update its policies and to provide information about other City taxes. We are continuing to monitor state and local tax developments related to the ongoing coronavirus crisis.  For questions about this alert or other state and local tax issues, contact a member of Ballard Spahr's Tax Group.

Copyright © 2020 by Ballard Spahr LLP.
(No claim to original U.S. government material.)

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This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.

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