Taxpayer Frequently Asked Questions

Who has to pay this tax?
Why do I have to pay this tax?
In what law is the collection based?
What is the tax rate?
What is taxable income?
What is nontaxable income?
How do I pay?
What if I have an overpayment?
What if I do not get the appropriate tax forms in the mail?
Where do I pay my tax?
What happened if I do no pay my tax?
What if i have a question?

Who has to pay this tax?

Any resident of the Borough of Plum, whether they own their home or rent, is liable for theEarned Income and Net Profits Tax. There are no exemptions because of age or limited earnings.

Why do I have to pay this tax?

Our Municipality and School District depend upon tax monies to enable them to provide the municipal and educational services that we expect. Our local tax revenue provides one of their sources of money.

In what law is the collection based?

In 1965, the State legislature passed “The Local Tax Enabling Act,” which covers Earned Income Tax, Net Profits and many other types of taxes. Under the Local Tax Enabling Act (P.L.1257, Act 511), cities, boroughs, townships and school districts are permitted to collect a tax on Earned Income and Net Profits. Plum Borough Ordinance #555-95 allows for the collection of this tax. This office collects the Earned Income Tax under rules laid down by State Act 511 and local ordinances.

What is the tax rate?

The tax rate is 1% of your total gross earnings and/or net profits. This office collects the full 1% and distributes 50% of our collections to the Borough of Plum and 50% of our collections to the Plum Borough School District.

What is taxable income?

Taxable income includes salaries, wages, commissions, bonuses, incentive payments, fees, tips, vacation pay, honoraria, severance pay, profit distributions, sick pay (other than third party sick pay), net profits from a business and/or profession or farm, some rental income (taxable if rental income is your primary source of income), royalties, patents and fees, partnership or joint venture income, educational stipends, executor’s and director’s fees, taxes assumed by the employer for the employee, excess life insurance, exercised stock options from employers, deferred income for pensions and annuities, inactive military pay and other forms of compensation by the taxpayer, whether in cash or property. Anything included in the State Wage Figure from your W-2 form is considered taxable. Also taxable are Net Profits from the operation of a business, profession or other activity after provision for all costs and expenses incurred in the conduct of that business. You are permitted to deduct those business expenses declared on a Federal 2106 or PA UE form.

What is nontaxable income?

Interest and dividend income, social security benefits, pensions, disability benefits, active military pay, third party sick pay, lottery winnings, death benefit payments, gifts or bequests, unemployment compensation, supplemental unemployment benefits (SUB), public assistance, income from stocks or trusts and capital gains. The net profit received from a Sub-chapter S corporation is not taxable at the local level, however, you must report this income when filing your Final Tax Return for the year. (There is a space provided to record your Sub Chapter S profits under “Additional Information” of your Final Tax Return.)

How do I pay?

If your employer DOES NOT withhold your local earned income tax and/or you are selfemployed,
you MUST make estimated quarterly payments. Your payments MUST equal 80%
of the total tax year’s obligation. Tax packets containing four (4) Quarterly Payment Vouchers
are mailed in the month of March. Quarterly payments are due as follows:

• 1st quarter due April 15th
• 2nd quarter due July 15th
• 3rd quarter due October 15th
• 4th quarter due January 15th of the following year

If your employer withholds your local tax, your employer will remit payment to our office quarterly. At the end of the tax year, all taxpayers are required to file a Final Return with our office. This is due by April 15th, the same as your Federal and State returns. With your Final Return, you must file a copy of your W2(s), 1099 MISC, Schedules C, E, K-1, RK-1S, and PA UE. Any tax due must be paid with this return. If you have not paid quarterly, interest and penalty charges will be assessed and billed accordingly. Joint filing is NOT permitted.

What if I have an overpayment?

A completed final return with all required documentation MUST be filed before a request for a refund or credit can be considered. Overpayments will be credited to the next year’s taxes automatically unless a refund is specifically requested. No refund or credit under $1.00 will be processed. Any refund request over $50.00 MUST be accompanied by a copy of your PA40 (State Income Tax Return). You may ask why we require a copy of your PA 40? The information on your PA 40 will confirm the information you filed at the local level and prevents this office from refunding money incorrectly.

What if I do not get the appropriate tax forms in the mail?

If you do not receive quarterly payment vouchers and/or a Final Tax Return, please contact our office immediately so that we can get the proper forms to you as soon as possible. We do our best to track new residents moving into the Borough, however, failure of a taxpayer or employer to receive forms or returns required by our Ordinance and Rules and Regulations does not excuse failure to file any reports or returns required or to pay any tax due.

Where do I pay my tax?

Most taxpayers mail their returns and payments. We use the postmark to determine if the payment is in on time. Our office is located in the REAR of the Municipal Authority Building at 4555 New Texas Road, Suite C where you can mail payments or pay in person. We also have a drop box located outside of our entry door for those who cannot get to our office during regular business hours.

What happens if I do no pay my tax?

After the April 15th due date, a $15.00 late filing fee will be added to your tax return along with interest and penalty charges in the event quarterly payments were not made. You will be sent a delinquent notification letter and have 30 days to respond with payment. If you do not, this office will send a written demand to your employer to attach your wages and/or legal action.

What if i have a question?

You are always welcome to call our office for additional information. Our telephone number is 412/793-9900, our fax number is 412/793-9950, and our email address is This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Our office hours are from 8:00 am to 5:00 pm Monday through Thursday and 8:00 am to 4:00 pm Friday. We will be glad to give you any information that will help you understand or file your returns correctly.