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March 1, 2022

Philadelphia provides guidance concerning the expiration of temporary nexus relief for telework during the COVID-19 emergency

In frequently asked questions (FAQs) updated on February 10, 2022, the Philadelphia Department of Revenue provided clarification concerning the expiration of its temporary nexus waiver for the business income and receipts tax (BIRT) and net profits tax (NPT). (See EY Tax Alert 2020-2875.)

During the COVID-19 emergency and through June 30, 2021, the Department temporarily waived the legal nexus threshold that considers the presence of employees working temporarily from home within Philadelphia as establishing a sufficient nexus for businesses located outside Philadelphia. This waiver applied when an employee worked from home solely due to the COVID-19 emergency.

The Department confirmed that an entity is considered to have nexus for BIRT purposes when it has one or more employees conducting business activities on its behalf in Philadelphia. Therefore, an entity located outside of Philadelphia, and that continued to have Philadelphia-resident employees working from home after June 30, 2021, had nexus in 2021 based on the activities of those remote workers.

The determination of what constitutes a "remote workforce" within Philadelphia is based on facts and circumstances and includes the consideration of such factors as:

  • Official company policies regarding remote work arrangements
  • The nature and regularity of business activity in Philadelphia

The determination of whether an entity has established nexus in Philadelphia for NPT purposes is a factual analysis to be made on a case-by-case basis.

Information concerning Philadelphia's tax guidance in response to COVID-19 is available here.


Contact Information
For additional information concerning this Alert, please contact:
Workforce Tax Services - Employment Tax Advisory Services
   • Kristie Lowery (
   • Kenneth Hausser (
   • Debera Salam (


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