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Do I have to file a Local Earned Income Tax return if I am retired, receive social security or receive unemployment?

Local Earned income tax is based on earned income, which mirrors the compensation you report at the state level.  If the income you received is earned, then it is taxable at the local level, regardless of the age of the person that received said income. 

Being ‘retired’ does not necessarily mean that the income you received isn’t taxable. Some compensation arrangements pay out taxable distributions well into retirement. Further, many Pennsylvanians consider themselves retired but have a part time job.  If you receive a W-2 or 1099-NEC, that income is reportable and taxable.

Payments from a retirement plan may be taxable, depending on the type of distribution.  A normal distribution (from age 59 ½ and older) will not be taxable.  Early distributions, in most cases, will be taxable, but there are certain circumstances in which they may not be. Ultimately, the tax treatment of income received from a retirement benefit plan will be plan dependent. You are advised to seek the advice of a tax professional to be certain.

Unemployment benefits and Social Security are not taxable at the local level.

Please see the Earned Income Tax Return Instructions for more information on taxable vs. non-taxable earned income.


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