Finance Department

Keystone Collections Group serves as the Earned Income Tax Collector for Upper Providence Township. Take advantage of Keystone’s quick and easy online payment options. If you prefer to pay by mail, refer to Keystone’s mailing addresses.

Earned Income Tax (Current & Delinquent)

State law requires Pennsylvania residents with earned income, wages and/or net profits, to file an annual local earned income tax return and supply income and withholding documentation, such as a W-2. Even if you have employer withholding or are not expecting a refund, you must file an annual tax return.

If you are a Wage Earner/Salaried Employee:

Pennsylvania employers are required by law to withhold earned income tax from all employees’ pay. Your employer must obtain and report certain information about your residence and your PA work location and withhold the correct amount of earned income tax. Online filing is available here Version OptionsEarned Income Tax (EIT)Headline. 

If you are Self-Employed or Employed Outside of PA:

If you are self-employed, have earnings reported on Form 1099, or work outside of PA and your employer does not withhold your earned income tax, you must report your income and pay your tax quarterly. Report and pay quarterly estimates here Version OptionsEarned Income Tax (EIT)Headline.

If you are an Employer:

You are required to withhold earned income tax from your employees’ compensation. Keystone’s Business Portal is the quickest way to report EIT withholding. You can file your quarterly payroll withholding online and pay online or by mail. 

Pennsylvania law requires employers to report two Political Subdivision (PSD) Codes for each employee – one code designating the place where the employee lives (resident PSD Code), and one code for the place where the employee works (workplace location PSD Code). If the tax rates for the resident and workplace jurisdictions differ, employers must withhold at the higher of the two rates.

Employers and/or taxpayers can use the Certificate of Residency form to report essential information for the collection and distribution of Local Earned Income Taxes. This form should be utilized by employers when a new employee is hired or when a current employee notifies employer of a name and/or address change and be retained by the employer for payroll records.

Download the Upper Providence Township Employer EIT Rate Change document.

Local Earned Income Tax Annual Final Return Form and Instructions:

Tax forms and filing instructions are sent to resident taxpayers annually. Tax forms and instructions are available here Version Options Earned Income Tax (EIT) Headline Local Earned Income Tax Annual Final Return Form and Instructions: Local Earned Income Tax Annual Final Return Form and Instructions: Local Earned Income Tax Annual Final Return Form and Instructions: Local Earned Income Tax Annual Final Return Form and Instructions: Local Earned Income Tax Annual Final Return Form and Instructions: Local Earned Income Tax Annual Final Return Form and Instructions: Local Earned Income Tax Annual Final Return Form and Instructions: Local Earned Income Tax Annual Final Return Form and Instructions: Local Earned Income Tax Annual Final Return Form and Instructions:.

Keystone Collections Group FAQs

Download the Keystone EIT FAQ
Download the Keystone EIT Enactment FAQ

Resources

• Press Release: Four Communities Enact Local Earned Income Tax, 2024; download the doc.
• PA municipalities who have enacted an EIT; use the search tool.
• Take note of EIT Ordinance No. 558; download the PDF.
• Impact of 1% EIT and UPT Census Stats; download the PDF.
• View 2024 Delaware County tax rates; download the PDF.
• See the EIT Financial Analysis; download the slides. 

EIT FAQ

What is an Earned Income Tax?

The local EIT was enacted in 1965 under Act 511, the state law that gives municipalities and school districts the legal authority to levy a tax on individual gross earned income/compensation and net profits. The tax is based on the taxpayer's place of residence (domicile) and NOT their place of employment. The EIT is separate from the Pennsylvania personal income tax (your state income tax).

Why do we need a new revenue option?

Upper Providence currently relies heavily on Property Taxes as its main source of revenue. It has become very clear that we need to diversify. Adding an Earned Income Tax, which is based on income rather than the value of a property, means that a retired homeowner isn't burdened by large property tax increases. Relying only on property taxes to keep up with increases to labor costs and contractual obligations is not affordable to all residents. Upper Providence Township deserves the best possible municipal services and that comes at a cost.

What is the purpose of having an EIT?

Township revenue is basically flat, while expenses continue to rise year after year. That leaves a structural deficit that needs to be closed. EIT revenue will grow as the economy grows. The Property Transfer Tax is relied on heavily; however, the tax is unpredictable as the tax is predicated on home sales trends. Other revenue streams are mostly flat or declining.

How does the EIT improve the quality of life in UPT?

Additional revenue increases public safety, increases Fire Protection for residents and commuters, and increases the budget for Recreation. The goal is to ensure that the quality of life in Upper Providence Township can be maintained or enhanced for years to come.

Who pays an Earned Income Tax in UPT?

Upper Providence residents, regardless of where they work, and non-residents commuting to Upper Providence are subject to the tax. If a commuter's home municipality levies a resident EIT, then the non-resident EIT revenue would be remitted to the home municipality first. For example, if a commuter's home municipality levies a 0.5 percent EIT, 0.5 percent would be remitted to the home municipality and the other 0.5 percent would be remitted to Upper Providence.

What income is exempt from the EIT?

Income such as dividends, interest, income from trusts, bonds, insurance proceeds and stocks (Schedule D) is exempt. Also exempt are payments for disability benefits, retirement pay, pensions (except payments deemed as Early Distributions), social security payments, public assistance or unemployment compensation payments made by any governmental agency, any wages or compensation paid by the United States for active service in the armed forces of the United States including bonuses or additional compensation for such service, supplemental unemployment compensation from employers or unions and clergy housing allowance.

Is retirement income taxable for the EIT?

Pennsylvania local EIT applies to both compensation and net profits. State law requires that compensation taxed at the state level match EIT at the local level. For this reason, retirement income is treated identically for both state and local income tax purposes.

Not all income received in retirement is treated equally, and taxability will differ on a case-by-case basis depending upon the type of retirement plan, when the income is received, etc. One respect in which Pennsylvania tax differs from Federal tax concerns 401(k) contributions. Federal taxable wages do not include 401(k) contributions. However, Pennsylvania assesses tax, unless explicitly stated otherwise, upon Medicare wages, which include 401(k) contributions.

On the other hand, distributions from 401(k) plans are not taxable if received after retirement age. Early distributions from 401(k) plans and other similar retirement plans are taxable, subject to the cost recovery method (distribution – taxed contributions = taxable income). Pension plans and IRA distributions are not taxable if taken in accordance with the age and/or years of service provisions of the respective plan. Deferred compensation is taxed, in whole, at distribution. There are many unique retirement plans, and it would be far too complicated to detail them all here; however, it is important to know that they are all taxed identically at the local level as they are at the state level.

If I already pay an EIT, will I have to pay UPT's EIT, too?

Residents who work in other municipalities that levy a non-resident EIT currently pay that tax wherever they work. For example, if an Upper Providence resident works in the City of Chester, they currently pay 2.0 of their gross earnings to Chester. If Upper Providence levied a 1.0 percent tax, the resident would pay 1.0 percent EIT to the Township and 1.0 percent to the City of Chester. There would be no change in this resident's total tax burden, but the amount paid would be split between the municipalities. In this case, there is a tax shift, but not a tax increase.

Keystone Collections Group, which collects EIT on behalf of all taxing bodies in Bucks, Chester, and Delaware counties, provided data showing that 1,583 Upper Providence residents paid a total of $919,000 in non-resident EIT to municipalities in these counties in 2022. Berkheimer Tax Collections serviced all of Montgomery County and other PA municipalities, Upper Providence residents paid a total of $488,000, which brings the combined total of approximately $1.4 million which was sent to other municipalities.

There is one important exception to this arrangement. Upper Providence residents who work in the City of Philadelphia would continue to pay that City's non-resident EIT, without any revenue coming back to the Township, even if Upper Providence had a resident EIT. They would see no change in their tax burden, and Upper Providence would not collect revenue from these residents.

Non-residents who work in Upper Providence could pay earned income taxes to the Township, depending on whether their home municipality levies a resident EIT.

If I live in UPT AND I work in UPT, will I have to pay the EIT twice?

No, individuals who live and work in Upper Providence Township would only pay the tax once. If the tax is passed at 1%, then you would only pay 1% as a resident. You would NOT pay the "commuter" EIT.

How many residents in UPT are already paying EIT to another community?

Keystone Collections Group says 1,525 residents already pay EIT to other municipalities. This does not include people who work in Montgomery County, the city of Philadelphia, or the state of Delaware. The total number of returns filed from UPT were 4,685; some of those returns were jointly filed by spouses.

Do I have to file a local EIT return if I am retired, receive social security or receive unemployment?

Local Earned Income Tax is based on earned income, which mirrors the compensation you report at the state level. If the income you received is earned, then it is taxable at the local level, regardless of the age of the person that received said income. 

Being ‘retired’ does not necessarily mean that the income you received isn’t taxable. Some compensation arrangements pay out taxable distributions well into retirement. Further, many Pennsylvanians consider themselves retired but have a part time job.  If you receive a W-2 or 1099-NEC, that income is reportable and taxable.

Payments from a retirement plan may be taxable, depending on the type of distribution.  A normal distribution (from age 59 ½ and older) will not be taxable.  Early distributions, in most cases, will be taxable, but there are certain circumstances in which they may not be. Ultimately, the tax treatment of income received from a retirement benefit plan will be plan dependent. You are advised to seek the advice of a tax professional to be certain.

Unemployment benefits and Social Security are not taxable at the local level.

Will an EIT affect my property value?

There is no evidence of any negative effects on property values. Additionally, with most surrounding counties having almost 100% of their municipalities collecting the EIT, and with Delaware County having 50% of their municipalities collecting an EIT and growing, it either does not or will soon not make much of a difference in property values, no matter where you live.

I work out of state and pay a commuter wage tax to a municipality in that other state. Am I eligible for a credit against my Pennsylvania resident local tax liability?

Yes. Wage tax paid to an out-of-state municipality in a non-reciprocal state (for example, to Wilmington, DE; or New York, NY) may be applied directly as a credit toward PA local earned income tax liability. State income tax paid outside PA must first be applied against PA state tax liability. Remaining state income tax credit may be applied against PA local tax liability.

In reciprocal states (New Jersey, Maryland, Ohio, West Virginia, Virginia and Indiana) where no wage tax is due to the other state, the wage tax paid to an out-of-state municipality may be applied directly as a credit toward PA local earned income tax liability.

Keystone’s e-file calculates out-of-state municipal credits for you.

Credit is available only on income subject to tax in both states. Credit may not exceed PA resident local earned income tax liability, be transferred to a spouse, or be applied to next year’s tax liability.

Upper Providence Township levies a tax on all property transferred from one owner to another. The collection/payment of the tax takes place at the property closing. The total transfer tax on all real property sold in Upper Providence Township is 3% of the sale price. Of the 3%, 1% goes to the Commonwealth of Pennsylvania, 0.5% to the Rose Tree Media School District and 1.5% to Upper Providence Township.

All owners of taxable real property in Upper Providence Township (vacant land or residential, commercial, and other structures) are subject to real estate tax each year. Township tax bills are mailed at the beginning of February every calendar year. Taxes paid by March 31 receive a 2% discount off the face amount. Taxes paid after May 31 will be assessed a 10% penalty over the face amount. All unpaid real estate taxes will be turned over to the Delaware County Tax Claim Bureau in Media for collection no later than January of the following year. The Township Tax books close for collection of taxes by December 31.

On February 10, 2005, the Upper Providence Township Council adopted an ordinance that replaces the Occupational Privilege Tax (OPT) with the Emergency and Municipal Services Tax (EMST). On June 21, 2007 the Local Tax Enabling Act was amended by Act 7 or 2007, renaming the EMST to the Local Services Tax. Under legislation approved by the Commonwealth of Pennsylvania, this new tax will cover the costs of services, such as police, fire, emergency services and road construction and maintenance.

All residents and non-residents alike who are employed in Upper Providence Township are required to pay an annual LST of $52. Employees are exempt from paying the LST in any calendar year in which they earn less than $12,000. The Township requires all employers within its boundaries to deduct the $52 LST from each eligible employee and remit to Berkheimer Associates.

For information about the LST in 2024 or previously or to obtain an can LST refund form during that time, contact Berkheimer Tax Innovations.

For information about the LST in 2025 and ongoing, contact Keystone Collections Group.

Delaware County and the Rose Tree Media School District levy separate taxes that are not included on your Upper Providence Township real estate tax bill.

For information about these taxes, contact:

• Delaware County Tax Collections: 610-891-4278
• Rose Tree Media School District: 610-627-6140

For more information, contact Property Tax Relief: call 717-787-6960 or View the Pennsylvania Department of Revenue website for detailed information and forms.

2025 Township Tax Levy: 2.399 mills