Pennsylvania employee

You can use the PA website to determine the jurisdiction for both the work location and the live location.  PA Act 32 requires you deduct the higher of the 2 jurisdictions but remit the tax to the "live" jurisdiction using the PSD codes.  I would start there. We have many many PA Associate and we utilize BSI software to determine taxes which is a life saver with PA.  Hope this helps....

We have the PA taxes set up now and they are withholding at the right rates, but none of the PA taxes are reducing taxable by the Section 125 amounts. Is there something special that needs to be done for PA in order for this to happen?

I would take a look at the tax type associated with the deduction code. 09 or 06. They have different taxing rule behind them.

Thanks Margie - I actually tried that last night in test - all of the deduction codes for benefits were set up as tax status 6 here. When I set the health plan to 9 it reduced the taxable appropriately - which is a compelling case (finally) to change all of the benefit deductions so they have the correct tax status - yeah!

Is there any good source of info for PSD codes?

http://munstatspa.dced.st...pa.us/Registers.aspx

This is the website we use to verify PSD codes.  If you enter PENNSYLVANIA you can get a report with all local taxes.  This report can then be downloaded to Excel.  Warning:  It will take some time to download.

You must set up your section 125 deduction codes using the tax status of  07 - 12. You are probably using tax status 06. You cannot change a the tax status once it has been used.  You must add new codes and assign these to the employee(s).