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.