PA berkheimer local 1% earned income wage tax

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Latest post 02-20-2009 12:35 PM by Drew. 7 replies.
  • 02-18-2009 7:30 PM

    • tracy14
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    Question [=?] PA berkheimer local 1% earned income wage tax

    I am in the process of finalizing a divorce after nearly three years. I am filing jointly with the soon to be exhusband for year 2008. He claims that I am responsible for paying his earned income local 1% wage tax. Berkheimer has told me on more than one occasion that I'm not responsible for his income tax, they said my lawyer (who said I had to pay it) was wrong and to look up Act 511. He is supposed to pay it quarterly and did not. He is filing an efile having the refund direct deposited into the account of his choosing and will dictate what my portion of the refund is after he uses it to pay his Berkheimer. I was told by Berkheimer that even when married incomes and taxes due on them locally are never merged and that one spouse isnt held accountable for the others taxes that are due. They said yes you are filing a federal return jointly but the local wage tax is individual.. Please can anyone clarify who's right?
  • 02-18-2009 8:52 PM In reply to

    Feedback [*=*] re: PA berkheimer local 1% earned income wage tax

    I used to live in PA in a township that had a 1% earned income tax (EIT) administered by Berkheimer (they do it for a number of townships). And they are quite correct. The EIT is a simple tax on the earned income of the individual. You don't file joint returns for it and one spouse is not liable for the other spouse's EIT. Filing a joint federal income tax return makes absolutely no difference in that whatsoever. It sounds like your divorce attorney is not very knowledgeable about tax matters, and that's unfortunately true for a lot of them. That's okay, if the attorney at least consults with a tax attorney or other expert before attempting to give tax answers. Tell your attorney to check with someone who really knows, because his answer is wrong.
  • 02-18-2009 10:12 PM In reply to

    • tracy14
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    Question [=?] re: PA berkheimer local 1% earned income wage tax

    thanks very much! just one more quick issue..ex is going to efile without my permission, wont let me look at his w2, what if he has made a mistake that will cost me later? what do I do if he has large refund direct deposited into his account or even shared account and takes my half of refund? do I have any recourse? Thank you again for clearing up the berkheimer issue, theres been nothing but war over it.. have a great evening
  • 02-19-2009 3:45 AM In reply to

    Feedback [*=*] re: PA berkheimer local 1% earned income wage tax

    I suggest you not file a return with him unless you see the entire return first, including the W-2. You are jointly and severally liable for what's on the return, and you are every bit as responsible as he is for the accuracy of the return. If he won't let you see everything that goes on the return, then don't agree to the joint filing, don't sign it, don't consent to any e-filing of it.

    You can always find out what the refund was that was actually issued on a joint return--just contact the IRS and it will give you that information. So he cannot hide the real amount of the refund and short you on your share of it.
  • 02-19-2009 2:20 PM In reply to

    • Drew
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    Angry [:@] re: PA berkheimer local 1% earned income wage tax

    Laymans take:

    I gotta agree with taxagent.

    1. PA EIT 1% (or more if you are in a home rule city) is strictly by the individual --Berkheimer has it right (They do have some stuff wrong and there actually is a local tax with spousal liability--but EIT isn't one of them!)
    Hubby is WRONG

    2. You are UNWISE to file a Federal joint return with Hubby--yes its likely to be more tax efficient but if you play be his rules you may kiss your refund goodbye--WORSE if hubby gets it wrong, you are jointly and separately liable to IRS for the whole thing to extent it is wrong! Unless you have access to W-2 and the entire return BEFORE you sign it and copies for your records and have competent reason to believe its accurate I would not go there with a 10 foot pole!

    The division of the tax return is up for debate and barter but there is absolutely no reason to agree to apply it to his delinquent tax matters or for it to be deposited in some hiding place of his choosing--and you have to spend 4 hrs of your lawyers billable time to unwrap it!

    Hint if he is paying quarterly to EIT my guess is he is self employed--and I'd be 5X extra careful about signing joint returns with self employed person unless I was ultra sure that person had been making honest returns of all income to IRS all along---there is NO statute of limitations for him having submitted a fraudulent return say 2002 --and if you signed that 2002 return the IRS could put you out to dry and even if your divorce has a hold harmless clause in it it doesn't stop IRS from targeting you! That said, I believe you want a well crafted hold harmless clause in your final order anyway.



  • 02-19-2009 2:34 PM In reply to

    • Drew
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    re: PA berkheimer local 1% earned income wage tax

    Why if he is paid, you say, on W-2 was local EIT not withheld?

    Something seems odd---as most PA employers know enough to get EIT done and its subject to source withholding--and PA has tax agreements with many of its neighbor states (Except NY)

    Where does he work? NJ?

    Self employed?



  • 02-19-2009 11:04 PM In reply to

    • tracy14
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    Feedback [*=*] re: PA berkheimer local 1% earned income wage tax

    in cranberry pa for example and other cities in vicinity eit is not withheld from paychecks..it is up to the individual to estimate and pay it quarterly..not all companies withhold local 1% tax..his does not. Not self-employed either.. thanks for your interest, Ive decided from responses that Im not liable for his eit..but those are just words and there isnt too much I can do about it if he takes refund..Ill have to add it to divorce agreement. Divorce is just ugly..I'm not trying to scalp him just want whats fair and right after a LONG marriage. Thanks to all who responded so quickly. :)
  • 02-20-2009 12:35 PM In reply to

    • Drew
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    re: PA berkheimer local 1% earned income wage tax

    Actually Act 511 calls for withholding at the source but local stuff vary greatly in enforcement---and if employee fails to pay and employer failed to withhold the act says EMPLOYER is on the hook to make good.

    Be that as it may--I don't see where his 1% is on your side of table to pay.

    As taxagent suggested, if you don't trust the 1040 return --don't sign joint one.

    If a joint 1040 is accurately prepared then the refund amount shows up on page 2--and rather than play games on chasing a check at $250/hr it should be simple math for your attorney to factor the number in NOW to the equitable division so if the projected refund is $2500 its not rocket science to put $1250 on your side of table NOW.



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