Do I Need to File a Philadelphia City Tax Return?

Philadelphia operates a local tax system separate from federal and state obligations, requiring certain individuals and businesses to file city-specific tax returns. For those who live, work, or do business within the city, it is important to understand these filing requirements. This article provides clarity on who needs to file, what is required for the process, and how to submit the necessary documents.

Who Needs to File a Philadelphia Tax Return

Determining your obligation to file a Philadelphia tax return depends on your residency status and the type of income you earn. The city’s requirements vary for different individuals and business activities.

For residents and non-residents who receive a W-2, if your employer correctly withholds the Philadelphia Wage Tax, you do not need to file an annual return for that income. However, a filing obligation arises if the tax is not withheld. This is common for residents working for an out-of-state employer or non-residents whose employer does not withhold the tax.

In cases where the tax is not withheld, you must file an Earnings Tax return. Although the Wage Tax and Earnings Tax refer to the same tax on salaries, the method of payment differs. The active filing requirement for an annual Earnings Tax return is triggered when employer withholding does not occur.

Sole proprietors, freelancers, and partners who conduct business in the city must file a Net Profits Tax (NPT) return, regardless of where they live. The responsibility to file exists for Philadelphia residents even if their business is conducted outside the city. For non-residents, the tax is based on profits generated from business activities within Philadelphia.

Those who earn income from renting property located in Philadelphia are also considered to be operating a business and must file an NPT return. This applies to both resident and non-resident property owners. A return is required even if the rental property operates at a loss for the year.

Information and Forms for Filing

Filing a Philadelphia tax return requires gathering specific information and using the correct forms. Before beginning, you should collect all relevant documents to ensure accuracy. This includes your Social Security Number, copies of federal forms like W-2s, 1099-NEC, and 1099-MISC. For business or rental income, you will need detailed records of all income and a list of deductible expenses.

The primary form for individuals whose wage income was not subject to employer withholding is the Earnings Tax Return. You will use your W-2s and other income statements to report your gross compensation and calculate the tax owed. Effective July 1, 2025, the Philadelphia Earnings Tax rate is 3.74% for residents and 3.43% for non-residents.

For self-employed individuals and unincorporated businesses, the Net Profits Tax (NPT) Return is the required document. To complete it, you will need your business’s gross receipts and a detailed breakdown of all business-related expenses. The NPT and other tax forms are available on the city’s revenue department website.

In some cases, businesses operating in the city may also need to file a Business Income & Receipts Tax (BIRT) return. This tax applies to both the gross receipts and net income of most businesses and is a separate obligation from the NPT. For tax year 2025, the BIRT rate on net income is 5.71%.

How to File Your Philadelphia Tax Return

Once you have gathered your information and completed the appropriate forms, the final step is to submit your return to the Philadelphia Department of Revenue. The city offers two primary methods for filing: electronically or by mail.

You can file online through the Philadelphia Tax Center, the city’s online portal. After creating a username and password, you can navigate to the appropriate section for your tax type, enter your data, and upload required documents. The portal guides you through submission and provides options for making payments electronically.

Alternatively, you can file your return by mail. It is important to send your documents to the correct post office box, as the address varies depending on the form and whether you are due a refund. For instance, a Net Profits Tax return with no refund due should be mailed to P.O. Box 1660, Philadelphia, PA 19105-1660.

If you are requesting a refund, the same NPT return should be sent to P.O. Box 1137, Philadelphia, PA 19105-1137. If a payment is due, you should include a check or money order payable to the “City of Philadelphia” along with the corresponding payment coupon.

After submitting your return, you can expect a confirmation if you filed electronically. Processing times can vary, but you can check the status of your return or refund through the Philadelphia Tax Center. This allows you to track your filing and ensure it has been received.