1012L Tax Code: Who Files, Deadlines, and Penalties

In Pennsylvania, the “1012L” tax code is shorthand for the local earned income tax return, officially titled Form CLGS-32-1, that residents of taxing municipalities file every year under Act 32 of 2008.¹ If you live in a Pennsylvania municipality that levies an earned income tax and you received wages, salary, commissions, or net profits from self-employment during the year, you owe this return by April 15 — even if your employer withheld the full amount from every paycheck.

Who Has to File

The filing requirement follows your residence, not your workplace. Anyone living in a Pennsylvania municipality with a local earned income tax and receiving earned income during the year must file, and having nothing extra to pay does not excuse the filing.²

The tax only reaches compensation from work or business activity. Social Security benefits, pensions, unemployment compensation, disability payments, interest, dividends, capital gains, and active military pay are exempt.³ Retirees living entirely on Social Security and pension income generally owe nothing, but the cleanest approach is to file with “Retired” indicated and zeros in the income lines rather than skipping the filing altogether.

What Income Goes on the Return

For Line 1, gross earnings from services, use Box 18 of your W-2 (local wages). If Box 18 is blank, then use Box 16 (state wages).² This order matters. Older guidance that tells filers to grab Box 16 directly can overstate your local taxable compensation when the employer reported a different figure in Box 18.

Taxable compensation covers salaries, bonuses, commissions, tips, stipends, incentive payments, and employee contributions to retirement accounts. It also picks up items people often miss: jury duty pay, compensation received as property (valued at fair market value), and sick pay received under an employment agreement.³ Self-employed filers report net profits from their federal schedules, not gross revenue. Interest, dividends, and capital gains stay off this return regardless of how they appear on your federal filing.

Your PSD Code and Local Rate

Every Pennsylvania municipality has a six-digit Political Subdivision (PSD) code. The first two digits identify the county-level tax collection district, the first four identify the school district, and all six pinpoint the township, borough, or city.⁴ Get this code right; it controls which municipality and school district actually receive your money. You can look it up by address through the Department of Community and Economic Development.⁵

Under the Local Tax Enabling Act, the combined rate shared between a municipality and its school district generally cannot exceed 1%, typically split 0.5% each.⁶ Some jurisdictions have voter approval to exceed that cap, so a few areas carry higher rates. Employers withhold at the higher of your resident rate or the nonresident rate at your workplace, which is what sets up many of the refund situations described below.

Deadline and How to File

The 2026 filing deadline for the 2025 tax year is April 15, 2026, whether you file online or by mail.⁷ The designated tax collectors, including Berkheimer and Keystone Collections Group, run secure online portals that let you upload documents, e-sign the return, and receive an immediate confirmation. Online filing also runs automated checks that catch mismatched PSD codes and arithmetic errors before they generate a notice.

Mailing the return means sending the signed CLGS-32-1 with copies of all W-2s and any 1099s reflecting earned income to the tax officer assigned to your residential PSD code. Use certified mail or a tracked service. Processing of mailed returns typically runs four to eight weeks during the April peak, so refunds arrive faster when you file electronically.

Refunds and Credits

The most common refund shows up when your employer withheld at a nonresident workplace rate that exceeds your home rate. A worksheet on the back of the form walks you through separating the withholding that covers your actual resident obligation from the excess. The local tax officer issues the difference after verifying the return.²

If you work in Philadelphia and live elsewhere in Pennsylvania, the wage tax Philadelphia withholds can be credited against your home district’s earned income tax. Enter the amount on Line 12 and attach your W-2 or other proof of the Philadelphia tax paid. Missing documentation means automatic denial. The credit cannot exceed your local tax liability, so overpayments to Philadelphia stay with the city rather than becoming a refund.⁸

One boundary to keep clear: if you paid income or wage tax to another state on the same earnings, that credit runs against your Pennsylvania state personal income tax, not against the local return.⁹

If You Moved During the Year

Moving between Pennsylvania municipalities during the tax year means filing a separate return for each municipality where you lived, using the Part-Year Resident Schedule on the reverse of the form to allocate income and tax. Calculate by full months rather than days, and make sure the two returns together account for the entire twelve-month year.² Filing online through your tax collector’s portal handles the allocation math automatically, which helps when the move crossed tax collection district lines.

If Your Employer Did Not Withhold

An employer’s failure to withhold local tax does not shift the payment obligation. Pennsylvania law puts the tax on the employee when the employer does not withhold; the employer faces its own fines for the withholding failure, but the tax itself is still yours.¹ If you catch this mid-year, contact your tax collection district and arrange payment before April. A lump sum by the deadline costs far less than the same amount with penalties and interest added.

Penalties for Filing Late

The late-filing math compounds monthly. Under the Local Tax Enabling Act, the failure-to-file penalty starts at 5% of the tax owed and adds another 5% for each additional month the return is late, up to a 25% cap. The minimum penalty is $5 even when the underlying tax is small.¹⁰ Interest on unpaid tax runs on top of the penalty.

A separate fine of up to $500 under the Local Tax Enabling Act sometimes gets misquoted as the price of a late return. It is not. That $500 applies to refusing to appear before a collector for examination or refusing to produce records when lawfully requested, and willful evasion or fraud can rise to a criminal misdemeanor. Local tax officers can pursue delinquent filings for several years past the due date, adding collection costs when they do. A 30-day notice is required before a penalty is imposed, which gives you a window to fix the problem before the charges start stacking.⁶

1
Pennsylvania Department of Community and Economic Development. Act 32 of 2008 Policy and Procedure Manual
2
Keystone Collections Group. Taxpayer Annual Local Earned Income Tax Return Instructions
3
Pennsylvania Department of Community and Economic Development. Taxpayer Annual Local Earned Income Tax Return
4
Pennsylvania Department of Community and Economic Development. PSD Codes and EIT Rates
5
Pennsylvania Department of Community and Economic Development. Find Local Withholding Rates by Address
6
Pennsylvania General Assembly. Pennsylvania Code 53 – Local Tax Enabling Act, The
7
Keystone Collections Group. File Your Local Earned Income Tax Return Online
8
Keystone Collections Group. How Do I Receive Credit for the Wage Tax I Paid to Philadelphia?
9
Department of Revenue. Pennsylvania Personal Income Tax Guide – Deductions and Credits
10
Pennsylvania Code and Bulletin. 61 Pennsylvania Code 121.26 – Penalties for Failure to File or for Filing a Late Return