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Nonwithholding of State Income Tax

Pennsylvania taxpayers who qualify for 100 percent Tax Forgiveness can arrange to have their employer discontinue withholding state income tax from their paychecks. To discontinue withholding, taxpayers and their employers must submit the Employee’s Nonwithholding Application, REV-419, to the PA Department of Revenue.

To qualify for nonwithholding, employees must have:

  • Filed for Tax Forgiveness in the previous tax year.
  • Qualified for a full refund (100%) of state taxes paid.
  • Appear to qualify for a full refund in the current tax year.

Workers filing for nonwithholding must be sure that their annual income does not exceed eligibility income levels. Otherwise, they could owe taxes when they file their return. The loss of a dependent, a raise, overtime pay, alimony, or any other unearned income can affect the yearly taxable income total. As soon as a taxpayer realizes that their income will exceed their eligibility income limit for Tax Forgiveness, they should revoke the nonwithholding arrangement with their employer.

Still, nonwithholding gives employees immediate access to income that would have been inaccessible otherwise. Remember these critical points:

Everyone making more than $33 a year must file a Pennsylvania income tax return. Tax Forgiveness is not automatic.

Workers filing for nonwithholding of PA Personal Income Taxes must be sure that their annual income will not exceed eligibility income levels.