Tax Information
Students who work at Carnegie Mellon should be aware of the different types of taxes that are withheld from their pay. Any type of service that a student performs in which he/she receives compensation is taxable at the federal, state, and local level. The following explanation of Pennsylvania and Pittsburgh taxes should help you to budget and plan accordingly.
Emergency and Municipal Service (EMS) Tax
All students (employees) pay a $52 Emergency and Municipal Services Tax to the City of Pittsburgh from the first paycheck of each calendar year. In cases where an employee's net pay is not sufficient to cover the entire amount of the tax, a zero net pay advice will be issued and the balance due withheld from subsequent pay(s) until the full amount of the tax is deducted. If you earn less than $12,000 (from all sources), you may be eligible for a refund of $42 from the City of Pittsburgh by filing a refund request from the City of Pittsburgh and providing proof of earnings. You would still be subject to the tax at a reduced rate of $10. Carnegie Mellon is required to withhold $52. The website for tax information for the City of Pittsburgh is: http://www.city.pittsburgh.pa.us/finance/html/forms-business.html.
PA State Tax
The PA State Income Tax is 3.07%. If your permanent home address is in Maryland, New Jersey, West Virginia, Virginia, Indiana, or Ohio, you are exempt from the PA State Income Tax. You may, however, owe state income tax in your home state. Refer to state tax laws within your home state for additional information.
Local Tax (Pittsburgh Wage/School Tax)
The local income tax for residents of the City of Pittsburgh is 3%. This tax is compiled of a 1% Pittsburgh Wage Resident Income Tax and a 2% Pittsburgh Wage Resident School Tax.
Pittsburgh Wage Non-Resident Income Tax
If you are not a resident of Pennsylvania or if you are a foreign student here on visa status you are subject to the non-resident wage income tax of 1%. If you do not live within the City of Pittsburgh, you may be exempt from the city wage and school tax by filing a WTEX form. This form is to be completed by you, and then signed by your boro/township tax collector. The boro/township tax collector MUST also place their seal/imprint on the form. Please print your name and social security number on the form to ensure that the Carnegie Mellon payroll office can process it in the event that they cannot read your signature.
FICA Tax (Social Security)
The FICA (Social Security) tax is presently 7.65% (6.2% Old Age; 1.45% Health). Students who are enrolled in classes do not pay FICA tax. FICA taxes are only withheld from your paycheck when you are working and not enrolled in classes. Foreign students may be subject to FICA tax, depending on their visa type.
Tax Treaties with Other Countries
The United States has income tax treaties with a number of foreign countries. Under these treaties, residents of foreign countries may be exempt from federal taxes. To ensure that you receive this exemption, please note your country of origin on your W-4 form along with your visa status.