PA Drops Interest Rate on Late Tax Payments

The PA Department of Revenue lowered the annual interest rate for late-filed tax payments to 5% for tax year 2020.

Interest accrues on tax year 2020 late payments at 0.417% per month on the tax balance due. Tax payments are due within 15 days following the close of each calendar quarter, whether through payroll withholding or self-reporting.

The interest rate on late payments for tax year 2019 remains unchanged at 6% per year, or 0.5% per month.

If you are self-employed, or if your employer does not withhold local tax from payroll, use Keystone’s e-file to ensure your payment arrives by the quarterly due dates.

Late or incorrect reporting may result in the imposition of statutory interest, penalty and Act 192 costs if:

  • Less than 90% of quarterly tax liability for the current year remains unpaid by the end of the fourth-quarter filing deadline, OR
  • The taxpayer has not made four equal and timely estimate payments totaling 100% of the prior year’s tax liability.

Visit Keystone’s FAQs for more information on local income tax reporting requirements.

February 7, 2020