Frequently Asked Questions
What is the Local Services Tax?
The Local Services Tax is a local tax payable by all individuals who hold a job or profession within a taxing jurisdiction imposing the tax. It is due quarterly on a prorated basis determined by the number of pay periods for a calendar year.
- If the total LST rate enacted exceeds $10.00, the tax will be deducted at a rate of $1.00 per week. For areas under Act 199, deductions will be greater than $1.00 per week. If the total LST rate enacted is $10.00 or less, the tax is to be collected in a lump sum.
Note: If you are self-employed – Use the net profit line on your Schedule C, F, etc. to determine if you owe the tax or not.
- The employee will only be required to pay the tax for the period in which they are employed within a political subdivision which imposes the tax.
- If the total LST rate enacted exceeds $10.00, the Act requires that all jurisdictions exempt individuals with incomes within their jurisdictions of less than $12,000 or $15,600 in areas whose rate is greater than $52.00. Employees will have the right to complete a Local Services Tax Exemption Certificate.
If the total LST rate enacted is $10.00 or less, the jurisdiction may choose to exempt individuals with incomes within their jurisdictions of less than $12,000.
Please be advised that the same income exemption may not apply to the school district portion of the tax.
- A person who served in any war or armed conflict in which the United States was engaged, received an honorable discharge and as a result of such service was left blind, a paraplegic, a double or quadruple amputee or has a service connected disability declared by the United States Veterans Administration (or its successor) to be a total one hundred percent permanent disability is exempt from the LST. Likewise, any person who serves as a member of a reserve component of the armed forces and is called to active duty during the tax year is exempt from the tax.
Who must pay the Local Services Tax?
The Local Services Tax shall be collected through payroll deductions from the employer for all employees. For self-employed individuals, see below.
Are LST Deductions based on where I live or where I am employed?
The Local Services Tax shall be deducted for the municipality or school district in which you are employed.
How and when is the tax deducted from my pay?
If the enacted LST rate exceeds $10, the tax must be withheld on a prorated basis determined by the number of pay periods established by an employer for a calendar year. If the LST rate is $10 or less, the tax may be collected in a lump sum.
What If I am a self-employed individual?
Self-employed individuals must pay their own tax on a quarterly basis, if the rate of tax exceeds $10. If the rate of tax is $10 or less, the self-employed individual will be required to pay their own tax in a lump sum payment.
Am I required to file quarterly?
Per Act 7, anyone with a tax rate greater than $10.00 must file quarterly. However, if you choose to pay the full amount with your first quarter filing, please remit all 4 stubs along with your check for the full of amount of the tax.
What If I have more than one job?
If a person has more than one job or is employed in more than one jurisdiction, the LST tax would be due to the taxing district in which the person is primarily employed.
Will I have to pay up to $52.00 per each employer?
The total LST paid by an individual in a calendar year is generally limited to $52.00, regardless of the number of taxing districts in which an individual works during the year. There are some distressed areas that have a higher tax rate, click here to find out the rate for area of employment. If you are employed in a distressed area your maximum annual tax paid would equal that areas rate.
How can I request a refund?
A refund can be requested if employed in more than one taxing district and/or more than the maximum tax due was deducted. Send a copy of the LST refund request form and supporting documentation to your local tax office. Click here to download an LST Refund Request form.
Is there a low-income exemption?
If you are employed in an area that has an LST rate that exceeds $10, there is a mandatory income exemption for those whose total earned income and/or net profits are less than $12,000.00 or $15,600 in areas whose rate is greater than $52.00. Please be advised that the same income exemption may not apply for the school district portion of the tax and may result in a reduced refund.
If you believe you will meet the exemption requirement, you must complete and return to us the Exemption Certificate. Click here to download the form.
If you have additional/specific questions that are not addressed above, please click on the link to send an inquiry to our customer care department.
