Tucked into legislation that passed June 30, 2021 that begins to impact certain taxpayers beginning January 1, 2022 is a requirement that personal income tax payments equal to or greater than $15,000 must be paid electronically. Taxpayers should expect to find themselves subject to a 3% penalty not to exceed $500 if a payment required to be paid electronically is made by check.
Pennsylvania 2021 House Bill 952 added 72. Pa. Stat. §7332.1 reads:
Any payment in the amount of fifteen thousand dollars ($15,000) or more remitted to the department for the tax imposed under this article shall be remitted electronically as prescribed by the department. This section shall not apply to employer withholding payments under Part VII of this article and section 9 of the act of April 9, 1929 (P.L. 343, No. 176), known as “The Fiscal Code.”
Even though the law was effective June 20, 2021, it appears that the Pennsylvania Department of Revenue (the DOR) will only begin enforcing the provision beginning January 1, 2022. On December 30, 2021 and January 3, 2022, the DOR updated two questions and answers on the DOR customer support webpage that noted:
Payments made after December 31, 2021 for personal income tax payments equal to or greater than $15,000 must be made electronically. Payments not made electronically will be subject to a penalty equaling 3 percent of the payment amount not to exceed $500.
DOR’s Updated Questions:
- Can I pay estimated personal income tax payments online?
- What are my options for paying the personal income tax that I owe?
The DOR directs taxpayers needing to make estimated tax payments electronically to its “myPath” website.
Taxpayers have a couple of options available to them when paying electronically. Payments can be made by debit or credit card (ACI Payments), or by ACH transfer. There are fees associated with paying by credit/debit card, and credit limitations might make this option effectively unavailable for some taxpayers (depending upon individual facts and circumstances). Paying by ACH transfer will require taxpayers to transfer funds directly from a savings or checking account.
If you have questions concerning the above requirements, please reach out to your Schneider Downs tax advisor for additional guidance.
