If your employee has a Pennsylvania work location and earns less than the municipality wage threshold, they should be set up as PA LST low income exempt.
For new employees with a Pennsylvania work location, be sure the employee profile is set up correctly prior to processing their first paycheck. This includes any low income exemptions for the current calendar year.
To do so:
- In the employee’s profile, review the PA work location address and update if needed.
- Review the locals in the tax section of the employee’s profile for accuracy and select “Yes” or “No” for LST Low Income Exempt.
- Upon entering and previewing payroll, if an employee has been set up as low income exempt and is under $12,000 in year-to-date wages, PA LST will not calculate and be withheld.
If an existing employee has a Pennsylvania work location, once they are paid as PA LST subject, they will be treated as subject for entire calendar year. Any PA LST refunds can be requested by the employee to the agency directly. If needed, you will be able to select low income exemptions for the next calendar year on the employee profile.
Please be sure you have collected the Exemption Certificate from any low income employees to keep for your records.
For questions regarding the setup of the employee with a Pennsylvania work location, please call our Customer Care team for assistance.