Person who does payroll here!

When you file your yearly taxes, you should file a federal, state, AND local return. If you didn't file a local return with Keystone collects it could be why they're sending you a letter. Use this website to figure out your local tax district and rate based on where you lived https://munstats.pa.gov/public/findmunicipality.aspx

Then take a look at your W2 and see if your employer with held enough money. Most localities are 1% with bigger cities being higher.

If you don't respond to the letter and clear things up and they determine you owe money, they'll send a wage attachment to your current employer for them to with hold and remit the money for you, which they'll tack on any penalties and interest.