Effective 2013, all Local Services Tax (LST), including prior years, will be collected by the Keystone Collections Group. Visit Keystone Collections Group's website to download LST forms (returns, regulations, refund and exemption applications) and to e-file. For more information, contact their customer service group at 1-866-539-1100.
In 2008, legislation enacted by the Pennsylvania General Assembly changed the payroll tax known as the "Emergency and Municipal Services Tax" (EMST) to the "Local Services Tax". This change affects all businesses and payroll companies that were subject to the EMST tax.
Collection Methods: The mandated collection method will be the total LST tax rate divided by the number of pay periods of a given employer. For example, Radnor Township's LST rate is $52 per year per employee; thus, an employee's annual required deductions should be $1 per weekly pay, $2 per biweekly pay, $4.33 per monthly pay, etc and should be remitted quarterly.
Exemption Threshold: Any individual who earns less than $12,000 in a calendar year is not subject to the LST. Employees can notify their employer if they know they will not make more than $12,000 per year by completing a Withholding Exemption Form. If the employee earns more than $12,000 in a calendar year, the employer is required to take out in lump sum the amount that would have been deducted to that point and then begin regular deductions going forward for the remainder of the year.
Income Clarification: The definition of "income from all sources" has been clarified to include all earned income and net profits from sources located within the political subdivision.
Those who were filing EMST3 (prior to 2008): Sole proprietors, 1099, self-employed, will now file a quarterly return which will match the $1 a week or $13 per quarter in order to remit the $52 tax per year.
Employers must file a Local Services Tax return for each calendar quarter. Visit Keystone Collections Group's website to download LST forms (returns, regulations, refund and exemption applications) and to e-file. Payment of the LST must be remitted with the quarterly returns. The quarterly returns are due on or before the last day of the month following the end of each calendar quarter: April 30, July 31, October 31, January 31.