Important Changes in Pennsylvania Tax Laws Effective January 1, 2018

Published on January 3, 2018.

Pennsylvania Personal Income Tax Withholding on

Non-Employee Compensation/Lease Payments

 

Effective January 1, 2018, any Pennsylvania business entity or individual paying an outside contractor or making lease payments (including real estate rentals) to a non-resident individual or a single member LLC (non-resident) is now required to withhold 3.07% from the gross payment. Withholding is optional for payors paying less than $5,000 (including lessors) on an annual basis to those payees.

 

Federal Form 1099-MISC must be filed annually with both the IRS and the Pennsylvania Department of Revenue. Payors and lessees subject to these provisions must register for a 1099-MISC withholding account by completing Form PA-100.

 

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