All individuals employed within Charlestown Township whose total earnings and net profits from all sources exceed $12,000 for the calendar year in which the local services tax is levied and who do not qualify for one of the exemptions. Sole proprietors, partners, and other types of business owners are subject to the LST.

No. The maximum total LST paid by any individual in a calendar year is $52 regardless of the number of political subdivisions in which an individual works during the calendar year

Each political subdivision that levies a LST at a rate exceeding $10 is required to exempt persons whose total earned income and net profits from all sources within the political subdivision are less than $12,000 for the calendar year in which the LST is levied.

Not if the employee files an upfront exemption certificate with both the employer and the municipality affirming that he or she reasonably expects to earn less than $12,000 during the calendar year for which the exemption certificate is filed.

If that individual’s earned income and net profits from the primary employer exceeds $12,000 or the municipality’s tax collector informs the employer that the employee’s income has reached $12,000, employers “restart” withholding of the LST by withholding a “catch up” lump sum tax equal to the amount of tax that was not withheld from the employee as a result of the exemption. Subsequent withholdings should equal the same amount per payroll period that is withheld from other employees who did not file an upfront exemption.

In addition to the low income exemption, exemptions are provided for individuals who are secondarily employed and whose primary employer is withholding the $52 annual tax liability, for members of a reserve component of the armed forces during anytime he or she is called to active duty (not inclusive of annual training requirement), and to honorably discharged veterans who served in any war or armed conflict who are blind, paraplegic, a double or quadruple amputee as a result of military service, or who are 100% disabled from a service-connected disability. For the purposes of this act, reserve component of the armed forces shall mean United States Army Reserve, United States Navy Reserve, United States Marine Corps Reserve, United States Coast Guard Reserve, United States Air Force Reserve, Pennsylvania Army National Guard, or the Pennsylvania Air National Guard.

Employers must withhold the tax based on their number of annual payroll periods and are prohibited from withholding the tax in a lump-sum payment. Therefore, if an employer pays its employees weekly, the tax must be withheld weekly. If an employer pays its employees biweekly, the tax must be withheld biweekly.

The tax should be pro-rated and paid by self-employed individuals on a quarterly basis, as if their payroll period is a calendar quarter. Self-employed taxpayers shall pay the tax to the municipality 30 days after the end of each calendar quarter.

If a taxpayer concurrently has two or more jobs in different political subdivisions that levy the local services tax in the amount of $52 during a payroll period, the priority of claim to collect the LST is as follows:

1. Where the taxpayer maintains his or her principal office or is principally employed
2. Where the taxpayer resides and works
3. Where the taxpayer is employed that is nearest in miles to the taxpayer’s home.

Employers must submit tax revenue within 30 days of the end of each quarter. The following is a listing of quarterly due dates:

1st Quarter- April 30
2nd Quarter- July 31
3rd Quarter- October 31
4th Quarter- January 31

No. The employee is now liable for the tax. If an employee quits, his or her previous employer only needs to withhold the tax for the payroll periods in which the former employee was employed. The former employee’s new employer will be responsible for withholding the tax from future paychecks.

Call Keystone Collections toll free at (866) 539-1100. Forms are available at www.keystonecollects.com.

For Charlestown residents, the rate is 1%. For non-residents, the rate is ½%.

The earned income tax has been levied by Charlestown Township by ordinance. Earned income is defined as salaries, wages, commissions, bonuses, incentive payments, fees, tips and/or other compensation for services rendered, whether in cash or property, and whether paid directly to you or through an agent. In addition, the net profits of a business are subject to a net profits tax. Net profits are defined as the net income from the operation of a business, profession, or other activity, except corporations, after deductions for all operating costs and expenses incurred in conducting said business.

Income such as dividends, interest, income from trusts, bonds, insurance and stocks is exempt. Also exempt are payments for third party sick or disability benefits, old age benefits, retirement pay, pensions – including social security payments, public assistance or unemployment compensation payments made by any governmental agency, and any wages or compensation paid by the United States for active service in the armed forces of the United States including bonuses or additional compensation for such service.

The tax withheld by your employer will be remitted first to your resident taxing jurisdiction. If the tax in the community where you work is higher, they will receive the difference.

No. If employed in Philadelphia, you may use the Philadelphia Wage Tax as a credit against your liability to your resident municipality, but the credit may not exceed the current tax rate for your local taxing jurisdiction. No refund or credit can be taken for any withholding greater than the current tax rate for your resident municipality.

All those who both reside and work in Pennsylvania. If they are following the requirements of Act 32 of 2008, all PA employers are required to withhold earned income tax and remit it quarterly.

The earned income tax will be collected directly from those who are: 1) self-employed; 2) salaried but self-employed in a side business; or 3) work in a municipality where the tax is not in place, or out of state. Those persons must file a quarterly income tax return form.

Yes. A Local Earned Income Tax Return must be filed annually by April 15th.

No. However, if you paid the tax in the past, or you receive tax forms for the current tax period, we recommend you simply write on the form that you have no earned income to report and return it to the tax collector.

Call Keystone Collections toll free at 866-539-1100. Forms are available at www.keystonecollects.com.