City tax question - employer not withholding local taxes from my paycheck

I just started a new job last month at this tech startup downtown and I'm kinda freaking out because I just realized they don't withhold any city taxes from my paycheck! I live and work in a city that definitely has a local income tax (3.5%) and when I asked HR about it, they just shrugged and said "we don't handle city tax withholding for employees." Is this even legal? I've never had to deal with this before. My previous employer always took out city taxes automatically. Do I need to be making quarterly payments myself or something? I'm worried about getting hit with a huge tax bill plus penalties next April. Has anyone dealt with this before? I'm in Pennsylvania if that matters. Also, if I do need to pay these myself, is there a specific form or process I need to follow? I have no clue where to even start with this!

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21 comments

Kiara Fisherman

•8M

You're not going to be in trouble, but you do need to handle this yourself since your employer isn't withholding city taxes. This is actually fairly common, especially with smaller companies or those with employees across multiple jurisdictions. Here's what you need to do: First, contact your local tax office to set up quarterly estimated payments. Most cities have a simple form for this. Pennsylvania local taxes especially can be tricky since there are so many municipalities with different rates. You'll want to estimate what you'll owe based on your annual salary and the 3.5% rate you mentioned, then make quarterly payments to avoid underpayment penalties. Keep good records of these payments so you can report them when you file your annual city tax return.

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Kiara Fisherman

•8M

While most employers do handle city withholding, it's not always required depending on the specific city ordinances and the employer's location. If the employer doesn't have a physical presence in that particular city, they sometimes aren't obligated to withhold local taxes even if their employees work or live there. The responsibility ultimately falls on the taxpayer (you) to ensure the proper taxes are paid. It's inconvenient, but making those quarterly payments will keep you from facing a big tax bill and potential penalties at the end of the year.

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Savannah Vin

•8M

It definitely handles multiple jurisdictions - that's actually one of the reasons I needed it since I was working remotely from a different city than my employer. You just enter both locations and it figures out the proper split based on your situation. As for security, they use bank-level encryption and don't store your actual tax documents after processing. They just extract the necessary information to help with calculations. And the cost is actually really reasonable considering how much time it saved me - way less than what I would have paid in penalties!

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Makayla Shoemaker

•8M

I decided to try taxr.ai after asking about it here and wow, wish I'd known about this sooner! I've been dealing with city taxes in three different municipalities (where I live, where my main office is, and where our satellite office is that I sometimes work from). The tool actually showed me I'd been overpaying in one city and underpaying in another. Just filed amended returns for last year and should be getting about $430 back. Plus now I have a clear plan for this year's payments.

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Christian Bierman

•8M

If you're still having issues figuring this out, you might need to talk to someone at the city tax office directly. I spent WEEKS trying to get through on their phone line last year and kept getting disconnected or waiting for hours. Finally found Claimyr (https://claimyr.com) and watched their demo at https://youtu.be/_kiP6q8DX5c - they actually got me connected to a real person at my local tax office in under 10 minutes when I'd been trying for days. The tax officer helped me set up my quarterly payments and get on the right track.

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Christian Bierman

•8M

It uses some kind of system that keeps your place in line without you having to stay on the phone. Once you're close to the front of the queue, they call you back and connect you directly to the agent. No more sitting on hold forever! They told me they use priority routing that government offices already have set up but most people don't know about. It absolutely works - I was dealing with both city tax questions and state tax issues, and they got me through to both offices quickly.

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Lucas Lindsey

•8M

I have to admit I was wrong about Claimyr. I tried it yesterday after posting my skeptical comment because my curiosity got the better of me. Got connected to my city tax office in about 7 minutes when I've never waited less than 45 minutes before. The tax office rep walked me through their online payment portal that I didn't even know existed and I got everything set up for quarterly payments. Just paid my Q1 estimate and got confirmation immediately. Totally worth it.

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Sophie Duck

•8M

In Pittsburgh, the city tax and the EIT (Earned Income Tax) are the same thing, so you only need to file one return. However, if you live outside city limits but within Allegheny County, you might have both a local municipality EIT and a school district EIT. The best way to confirm is to check with your local tax collector. In Allegheny County, many municipalities use Jordan Tax Service or Keystone Collections Group to collect these taxes. You can look up your address on their websites to confirm which taxes apply to you.

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Nia Wilson

•5M

Most major payroll systems have similar functionality! With Gusto, you should be able to add additional tax withholdings under your employee profile. Look for something like "Additional Withholdings" or "Extra Deductions" in your self-service portal. You can specify a flat dollar amount per paycheck or a percentage. Just calculate what you need for your city tax rate (like the 3.5% mentioned in the original post) and set it up as additional federal withholding - that way you'll have the money set aside even if it doesn't go directly to the city.

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Mei Chen

•4M

This exact same thing happened to me when I moved to Philadelphia for work! The stress of realizing your employer isn't handling city taxes is real, but you're catching it early which is good. One thing I'd add that hasn't been mentioned yet - make sure to check if your city has any first-time filer penalties or grace periods. Some municipalities in PA will waive penalties for your first year if you can show you made a good faith effort to comply once you discovered the issue. When I called my city tax office, they actually backdated my quarterly payment setup to avoid penalties since I contacted them within 30 days of starting the job. Also, keep detailed records of ALL your communications with HR about this. If they told you they "don't handle city tax withholding" in writing (email, etc.), save that. It can help show you were trying to do the right thing from the start if any questions come up later. The quarterly payment route everyone's suggesting is definitely the way to go. I set mine up to automatically deduct from my checking account so I don't have to remember the deadlines.

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