Disclaimer: I am not a tax professional, so the following post should not be taken as advice, I’m just documenting my situation.
Just when I thought I had everything done with my move from Allentown to Bethlehem I came across a post this morning from local blogger, Bernie O’Hare. In it he mentions that Allentown’s Earned Income Tax (EIT) rate went up by .35% in 2011.
When it came time to file my 2011 EIT return I wasn’t sure how I should handle the split between municipalities. At the time I made a call to Keystone Collections Group which is the third party who handles EIT for both Allentown and Bethlehem. I asked them, since I never got a form in the mail for Allentown (my former residence), what should I do? They were very nice an said that on the back of the form I should fill out the partial residence section and just mail the one form in. Since they do Allentown and Bethlehem’s EIT it would be OK. I filled out the form and mailed it in. Easy.
The problem is, the line on the EIT form that showed my tax liability said 1%. Since that’s what my employer withheld and since that’s what it had been for as long as I could remember, I figured I was good to go. I never even gave it a second thought, and in any other year leading up to 2011 I would have been fine. Of course, since Allentown’s rate increased and that wasn’t withheld properly from my check, everything isn’t fine. Now what?
I called Keystone Collections again and asked what I should do to correct the situation since I’m pretty sure I owe money. The woman I spoke with confirmed that Allentown’s rate did go up on January 1, 2011 and I would be responsible for the difference, but since it’s not April 17 yet, I’m not late. She said that I could download the tax form from their website and write AMENDED at the top and just fill it out with the new dollar amounts. She asked for my social security number so she could make a note on my record. (Hopefully that means that whoever looks at my form will be lenient on any penalties, etc.) Her instructions made sense so I hung up with the customer service person at Keysotone and went to their website to download the form so I could fill it out.
In filling out the amended form I noticed that on the partial residence section of the form it has no place to denote the tax liability, just how much was withheld from your check. Since I know that was wrong, that wasn’t going to help. I called Keystone back to ask how I should handle it and the woman said that I should just write it in on the back of the form. She didn’t say how to write it in on the back, and when I asked how I should denote my tax liability on the front of the form because there’s only one line to put in a percentage she said just to write in the entire dollar amount. I asked again just to make sure that all of this “writing things in” stuff was OK and she said that “they’ll figure it out.” Awesome.
I asked about any potential penalties since on the form it mentions a penalty or interest amount being based on the number of months the tax was underpaid or late. Since I’m not sure how they determine late (From the date I was paid? From April 17?) I asked if it was OK to just leave the penalties and interest amount as $0, and if there was a penalty, what would happen? I was told that if there’s a penalty that it would have to come from their legal department (which of course worried me even more). I asked if/what that would mean and she said it would basically just be like a bill that would come in the mail and I would send them in the payment.
I really don’t like the idea of being delinquent in any bill, let alone taxes. I asked if there would be some kind of mark on my credit or any liens or something involved and the rep told me that it would be nothing of the sort. I hope she’s right.
Now I get to figure out the clearest way to indicate my tax liability to both Bethlehem and Allentown on a form that doesn’t have a provision for it and then mail them in a check, hoping that the person processing it understands it and that I don’t owe any fees. I try to be very precise when I do things, especially things involving money, so the fact that there isn’t a proper procedure to fix this really bothers me.
And just think, if I hadn’t been reading local blogs this morning I never would have known about any of this.