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If you work in Pennsylvania and spot “LST” listed in Box 14 of your W-2 form, you’re probably wondering: What is this? What category do I select in TurboTax? Is it even deductible?
You’re not alone. Thousands of taxpayers ask this exact question every year during tax season. Box 14 is one of the most misunderstood sections of the W-2, and the LST label makes it even more confusing because it’s not a universally standardized code.
This complete guide will answer every question you have about LST in Box 14 — what it is, what category to select in your tax software, whether it affects your federal return, and how to handle it correctly so you don’t leave money on the table.
What Does LST Stand For in Box 14 of Your W-2?
LST stands for Local Services Tax — a flat annual tax that many Pennsylvania municipalities charge employees who work within their boundaries.
The Pennsylvania Local Services Tax is levied by local municipalities and school districts to fund public services such as emergency response, road maintenance, and public education. The LST is typically a flat rate, capped at $52 annually, though specific amounts vary by municipality.
In short: if you live or work in certain Pennsylvania jurisdictions and see “LST,” “PA LST,” or a variation like “LST-710501” in Box 14, it is this local flat-rate tax — not a federal tax, not a Social Security withholding, and not an income-based levy.
What Is Box 14 on a W-2?
Before diving deeper into LST, it helps to understand why Box 14 exists in the first place.
Box 14 on the W-2 form is typically either left blank or contains optional data, and it displays additional taxes or deductions that are not covered elsewhere on the form. Some examples of what might appear in this field include withheld state disability insurance taxes, union dues, nontaxable income, and education assistance payments.
There’s no standard format for this box, which is why TurboTax gives you a dropdown menu with various options. This is precisely why Box 14 causes so much confusion — every employer can label entries differently, and none of the codes are regulated by the IRS.
While not required by the IRS, many employers include the LST in Box 14 for employees’ convenience, offering a clear summary of the total deductions taken for local services. Including the LST in Box 14 helps employees reconcile their pay stubs with the W-2 during tax season, ensuring all deductions are accounted for accurately.
What Category Is LST in Box 14? (The Direct Answer)
This is the most-searched question — and the answer depends slightly on which tax software you use and what year you’re filing.
In TurboTax
There are two accepted answers from TurboTax tax experts, and both are technically correct depending on your specific situation:
Option 1 — “Other Deductible State or Local Tax”
On the dropdown for Box 14 W-2 input in TurboTax, you can choose “Other deductible state or local tax.”
For LST (local tax), TurboTax experts recommend selecting “Other mandatory deductible state or local tax” from the drop-down menu in Box 14. These deductions will be listed on Schedule A and included as a deduction if you itemize.
Option 2 — “Other (Not Classified)”
Since the LST is not a deductible tax at the federal level, some tax experts recommend using the category “Other (not classified)”, so TurboTax will not do anything with it (as it should not).
Which one should you choose? The key is whether you itemize deductions on your federal return:
- If you itemize deductions: Select “Other deductible state or local tax” — this will carry the amount to Schedule A.
- If you take the standard deduction: Select “Other (not classified)” — it won’t affect your return either way, and TurboTax won’t mishandle it.
“Other deductible state or local tax” is appropriate for LST. Keep in mind that state and local tax is subject to the $10,000 SALT limit under current law.
Is LST Tax Deductible?
This is where it gets a little nuanced.
The Pennsylvania Local Services Tax is not an employment-related tax based on income. Therefore, it is not deductible on your federal return. That’s why it’s in Box 14, not in Box 19 of your W-2.
However, another perspective from TurboTax experts notes that the PA LST is a deductible tax — just not a deductible earned income tax. It can be placed under Local/Other taxes paid on Schedule A if you itemize.
The practical reality for most taxpayers: because the LST is capped at just $52 per year, the tax amount is small enough that it rarely tips the scales on whether itemizing makes sense. State and local taxes often don’t make a difference on tax returns, because the taxpayer either doesn’t itemize or because the taxpayer’s state and local taxes already exceed $10,000.
Bottom line: The LST is technically a deductible state/local tax, but its impact on your federal refund is typically minimal or zero.
Where Exactly Should LST Appear on Your W-2?
Employers should report LST withholding in Box 14 of the W-2. It should NOT be reported in Box 19, which is reserved exclusively for local earned income tax payroll withholding.
This distinction matters for your own records and for your employer’s accuracy. If your employer has incorrectly placed LST in Box 19, that’s an error worth flagging with your payroll or HR department.
How Much Is the LST, and What Does It Fund?
Employers deduct the LST from employees’ wages in small increments, often per pay period, and remit it to the local tax authority. The LST is typically a flat rate, capped at $52 annually, though specific amounts vary by municipality.
The tax funds essential local government services, including:
- Emergency response services (police and fire departments)
- Road maintenance and infrastructure
- Public education systems
- Municipal operations
At institutions like Juniata College, for example, the LST is split into two parts: a Borough portion of $47 and a School District portion of $5, with employees earning under $12,000 being exempt from the $47 portion.
Who Is Subject to the LST?
Pennsylvania Residents and Workers
Most employees subject to the LST are those who work within a Pennsylvania municipality that levies the tax.
Non-residents earning income in Pennsylvania may still be subject to the Local Services Tax. If you work in a municipality that imposes this tax, you are liable for it, regardless of where you reside. However, not all municipalities levy the LST, and rates vary depending on the location. Employers typically handle the withholding of this tax for wages earned within the taxing jurisdiction.
Low-Income Exemptions
Not everyone has to pay. Each political subdivision that levies an 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 is less than $12,000 for the calendar year in which the LST is levied.
Military Exemptions
Political subdivisions must exempt from the LST: (1) members of a reserve component of the armed forces called to duty, and (2) honorably discharged veterans who served in any war or armed conflict who are blind, paraplegic, or a double or quadruple amputee as a result of military service, or who are 100% disabled from a service-connected disability.
Upfront Exemption Filing
If you expect to earn under the $12,000 threshold, you can proactively avoid the withholding. In order to receive an upfront exemption, employees must file an annual upfront exemption form with the political subdivision levying the LST and the employee’s employer. Employers must make upfront exemption forms readily available to employees at all times and provide new employees with the forms at the time of hiring.
Step-by-Step: How to Enter LST in TurboTax?
Here’s exactly what to do when you encounter LST in Box 14 during your TurboTax return:
- Step 1: Navigate to the W-2 entry section in TurboTax.
- Step 2: When you reach Box 14, enter “LST” (or the exact label your employer used) in the description field.
- Step 3: Enter the dollar amount shown on your W-2.
- Step 4: In the category dropdown, select one of the following:
-
- “Other deductible state or local tax” — if you plan to itemize deductions
- “Other (not classified)” — if you’re taking the standard deduction
If none of the categories apply, scroll to the bottom of the list and select “Other (not classified)”. TurboTax will figure out if it impacts your return. If more information is needed, TurboTax will ask. If Box 14 is blank, simply skip it — don’t enter a 0 for any blank boxes.
Common Variations of LST in Box 14
Your W-2 may show LST in slightly different formats depending on your employer’s payroll system. Here are the most common variations and what they mean:
| Box 14 Label | Meaning |
|---|---|
| LST | Local Services Tax (general) |
| PA LST | Pennsylvania Local Services Tax |
| LST-710501 | LST with municipality code appended |
| HLST | Huntingdon Borough Local Services Tax |
| HLSD | Huntingdon School District portion |
All of these refer to the same underlying tax. The numbers appended (like 710501) are typically the municipality’s PSD (Political Subdivision) code and do not change how you categorize the entry in your tax software.
What If LST Doesn’t Appear in Box 14 of Your W-2?
Some payroll systems are not required to display LST on the employee W-2, which has caused confusion for many workers. If you’re in Pennsylvania, received the LST deduction on your pay stubs throughout the year, but don’t see it in Box 14, you can:
- Check your final pay stub of the year — it will show year-to-date LST withheld.
- Contact your HR or payroll department to request that it be included on future W-2s.
- Manually calculate the amount from your pay stubs for your own records.
LST vs. Local Earned Income Tax: Know the Difference
Many Pennsylvania employees confuse the LST with the Local Earned Income Tax (EIT). These are two completely different taxes:
| Feature | LST (Local Services Tax) | EIT (Earned Income Tax) |
|---|---|---|
| Type | Flat tax | Percentage of income |
| W-2 Box | Box 14 | Box 19 |
| Basis | Working in a jurisdiction | Earned income |
| Cap | $52/year max | No cap (percentage-based) |
| Exemption | Income below $12,000 | N/A |
LST withholding belongs in Box 14 — not in Box 19, which is reserved exclusively for local earned income tax payroll withholding. If your employer has placed LST in Box 19, flag it as an error.
Record-Keeping Tips
Accurate record-keeping of Local Services Tax deductions is essential for employees and employers alike. Retaining pay stubs and W-2 forms provides a detailed account of withholdings, which should be kept for at least three years in accordance with IRS guidelines. Employers must maintain records of LST payments, including amounts withheld, remitted, and any adjustments made, and should preserve these records for at least four years to ensure availability for audits.
Frequently Asked Questions (FAQ)
Q: Is the LST the same as the PA state income tax? No. Pennsylvania state income tax is a separate percentage-based tax that appears in Boxes 16–17 of your W-2. LST is a local, flat-rate tax.
Q: Does LST affect my federal tax refund? In most cases, no — especially if you take the standard deduction. If you itemize, it may slightly increase your Schedule A deduction, but the $52 maximum means the impact is minimal.
Q: What if I work in multiple Pennsylvania municipalities? You may owe LST in each jurisdiction, but the combined total is still capped at $52 per year. Employers are required to coordinate this withholding.
Q: What if I’m self-employed in Pennsylvania? Self-employed individuals are responsible for filing and remitting the LST directly to their local tax authority. It won’t appear on a W-2 since you’re not an employee.
Q: Can I get a refund of the LST if I worked only part of the year? Yes, in some cases. If you were subject to LST from multiple employers or worked only part of the year in a taxing jurisdiction, you may qualify for a refund from your local tax authority.
Conclusion: The Short Answer
If Box 14 of your W-2 shows LST, it stands for Local Services Tax — a flat annual tax specific to Pennsylvania municipalities. When filing your taxes:
- Use “Other deductible state or local tax” in TurboTax if you itemize deductions.
- Use “Other (not classified)” if you take the standard deduction.
Either way, the tax amount (typically $52 or less) has minimal impact on your federal return, and selecting the wrong category is unlikely to cause a serious issue. When in doubt, consult your HR department or a licensed tax professional — especially if you had LST withheld from multiple employers or worked in multiple jurisdictions.
This article is for informational purposes only and does not constitute professional tax advice. For guidance specific to your situation, consult a licensed CPA or tax professional.