December 11, 2007, Volume 54, No. 15
2008 Tax Treaty Applications
Treaty exemptions are granted on a calendar year basis to eligible international students or scholars working for the University and therefore must be renewed each January, preferably before the cutoff date for the first payroll of the year. Please advise all monthly paid individuals working for the University who believe they are entitled to an exemption from taxes to report to the Payroll Tax Office. These individuals must bring proper identification to confirm their eligibility and sign the appropriate Tax Treaty documents for the 2008 tax year. They should also bring their most current immigration document with them. Please note that we are unable to provide treaty benefits to weekly paid individuals.
In order to meet the deadline for the January 2008 payroll, they must visit the Payroll Tax Office by Thursday, January 17, 2008. If they do not meet the January deadline they may still apply for the exemption, however the treaty benefits will not take affect until February. Please note that Payroll will not refund the Federal Withholding Tax for employees who miss the January 2008 deadline. The employee can claim the exemption when filing their 2008 tax return.
Forward this message to any individual within your department that this may affect and call the Payroll Tax Department at (215) 898-6573 or 898-1543 with questions or concerns.
—Kathleen Hewitt, Senior Tax Accountant
Payroll Tax Changes for 2008
Federal, state and local government have established the following tax rates and limits effective January 1, 2008.
• Social Security taxable wage base increased to $102,000.00 (up from 97,500.00 in 2007)
• Social Security Tax maximum withholding increased to $6,324.00 (up from $6,045.00 in 2007)
• Philadelphia City Wage Tax for Residents —reduced to 4.219% (down from 4.2600% in 2007)
• Philadelphia City Wage Tax Non-Residents —reduced to 3.7242% (down from 3.7557% in 2007)
• Pennsylvania Unemployment Tax withholding rate—reduce to .06% (down from .09% for 2007)
The new tax rates are effective for all payroll checks dated on or after January 1, 2008.
W-2 Mailing: Is Your Address Up-to-Date?
The calendar year is drawing to a close, which means that it will soon be time to start thinking about tax returns. Penn mails your W-2 to your permanent address in January of each year. If your permanent address is not up-to-date in the payroll system, your W-2 may be delayed or even lost. Please note that if you have no permanent address on file in the payroll system, your W-2 will be sent to your current address. To view and/or change your address information, go to the U@Penn website at www.upenn.edu/u@penn or contact your Business Administrator. Your address must be updated no later than January 9, 2008.
—Division of Finance