By Jonathan Liss, Senior Revenue Policy Analyst
Tax professionals want to know if the City of Philadelphia will adhere to the federal changes to eliminate the deductibility of employee business expenses and moving expenses —the answer is no. Philadelphia will continue to allow the deductions.
The Philadelphia Department of Revenue on January 16 announced its position regarding allowable deductions for employee business expenses and moving expenses in calculating compensation subject to the City Wage Tax.
The Tax Cuts and Jobs Act of 2017 modified the federal tax code to eliminate most miscellaneous deductions for individuals for years 2018 through 2025, including deductions for employee business expenses. Moving expenses are also no longer deductible.
The City of Philadelphia will continue to allow deductions for employment expenses that are ordinary, necessary, and reasonable—in accordance to its own Income Tax Regulations Section 204.
Philadelphia will also continue to allow deductions for expenses of moving to a new home within or into the City.
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