Section 113.7. Correcting mistakes

An overpayment or underpayment of tax shall be corrected in the following manner:

(1) If the correct amount of tax is withheld, but because of an underpayment or an overpayment an incorrect amount is remitted to the Commonwealth, proper adjustment may be made within the same calendar year on the first return or later returns filed after the error is discovered. In the case of such an overpayment, the employer shall file an application for refund if the error is not corrected by the end of the year.

(2) If no tax or less than the correct amount of tax (other than on tips), is deducted from any compensation, the employer is authorized and required to deduct the amount of the undercollection from later payments to the employees. The employer shall remit the correct amount with his deposit statement and shall be liable for any underpayment, plus applicable interest or penalties. Reimbursement shall be a matter for settlement between the employer and the employee.

(3) If in any filing period more than the correct amount of tax is deducted from any wage payment, the employer is authorized to make an appropriate adjustment in his withholding for a subsequent period or periods in the same taxable year. If the over withholding is not offset by the last withholding period of the year, the employee shall report the amount actually withheld on his yearly income tax return.

The provisions of this § 113.7 amended March 28, 2008, effective March 29, 2008, 37 Pa.B. 1476. Immediately preceding text appears at serial pages (302158) to (302159).