Previously, we alerted you to the enactment of PA House Bill 542 that requires businesses to withhold income taxes on certain payments to non-residents.
Beginning January 1, 2018, any business paying more than $5,000 to non-resident lessors (individuals, estates or trusts) for rents or royalties, and more than $5,000 of non-employee compensation or business income to non-resident individuals or non-resident single member limited liability companies, must withhold income tax at the current individual tax rate of 3.07%.
Under guidance recently issued by the PA Department of Revenue, anyone that make such payments must:
- Apply for a 1099-MISC withholding account by completing a PA-100 electronically, and
- File quarterly withholding returns and annual reconciliations with the Department and remit the withheld funds via e-TIDES.
We very much appreciate the opportunity to serve you. Please contact Wouch, Maloney & Co., LLP at 215-675-8364 with any questions or for assistance with any tax, financial or accounting issues.