January marks the start of the year, but also tax season. Federal individual income tax returns for 2019 are due on April 15, 2020. That is the same due date for filing Philadelphia’s Business Income & Receipts Tax (BIRT), Net Profits Tax (NPT), School Income Tax (SIT), and Earnings Tax returns.
April 15 is only four months away, and we know the countdown to Tax Day has already started for many accountants and tax professionals.
Here are 10 things to keep in mind as you work towards the deadline.
10. The Net Profits Tax (NPT) rates were reduced for 2019: 3.8712% for residents and 3.4481% for non-residents.
9. Some taxes MUST be filed or paid electronically. The Philadelphia Beverage and Use & Occupancy taxes must be filed and paid electronically. Taxpayers who owe $5,000 or more on BIRT or NPT must pay those electronically.
8. If a client wishes to close a tax account, or change their address, they must submit a Change Form. This way, they will avoid potential non-filer penalties in the future.
7. Be aware of changes to BIRT estimated payments for businesses that started in 2019. Recent regulations waive estimated payments for their second year of business operations.
6. The Business Income & Receipts Tax (BIRT) rate on net income was reduced to 6.25% for 2019. For the gross receipts portion of the tax, the rate of 1.415 mills (.001415) remains unchanged.
5. The Return on a Disk (ROAD) program no longer exists.
4. Philadelphia participates in the IRS Modernized e-Filing (MeF) Program. Our website includes a list of approved software vendors you can use to file BIRT and NPT electronically. New vendors have been added since last year.
3. Be aware of the $100,000 gross receipts threshold for BIRT nexus, beginning with the 2019 tax year. The Department of Revenue has provided important guidance for Philadelphia taxpayers on our website.
2. When requesting a refund for 2019 BIRT, NPT, SIT and Earnings Tax, you don’t need to submit a separate Refund Petition. You can do it on the form itself. However, you will need to submit a separate refund petition for:
- Amusement Tax, Hotel Tax, Liquor Tax, Parking Tax, Real Estate Tax, Tobacco Tax, Use & Occupancy Tax,
- Or for previous-year returns, and when correcting an error.
Please allow between eight and 10 weeks for processing.
1. If you have a thorny question about our tax law or regulations, and how they apply to a unique situation, email revenuetaxadvisors@phila.gov. If you need help with account history or filing procedures, simply reach out to revenue@phila.gov.
