The payment and withholding of earned income taxes (“EIT taxes”) in Pennsylvania at times seems like a complex maze and is challenging for human resource professionals or a company’s payroll tax team. In May, Pennsylvania amended its Local Tax Enabling Act. Most Pennsylvania municipalities levy an earned income tax on their residents at the rate of 1%. Nearly all municipalities also have a “non-resident” EIT tax rate, which is the same or higher than the rate for “residents.” Some distressed municipalities have a higher EIT tax rate, resulting in the division of withholding taxes between the employee’s resident municipality and the workplace municipality.