Pennsylvania 1099-MISC Update from the Department

Businesses and organizations have been struggling to implement the withholding and reporting obligations passed under Act 43 of 2017.  Act 43 requires withholding on payments to non-resident individuals of Pennsylvania-source income, including lessors.  The withholding and reporting law was passed in October 2017, but the issues surrounding it may not have been fully appreciated by taxpayers until December, when the Pennsylvania Department of Revenue issued an Informational Notice on the subject.

Since the release of that Informational Notice by the Department, taxpayers have asked many questions, not least of which is, how to timely implement the withholding and reporting requirements on such short notice.  The Pennsylvania Institute of Certified Public Accountants (PICPA) took up the cause on behalf of clients and taxpayers, and, in late January, sent a letter to the Department requesting a one-year delay in the implementation of the new 1099-MISC reporting, citing the challenges and burdens of implementing the new reporting requirements.

The Department stated, in its response to the PICPA’s request, that no assessments will be made for failing to withhold 1099-MISC income for periods prior to July 1, 2018.  The Department does expect taxpayers to file 1099-MISC with the Department by January 2019.  The Department also indicated that it will be providing updated guidance in the coming weeks and months that will be available on the website www.revenue.pa.gov.  Currently, the website includes a revised Information Notice and Fact Sheet (see links below) on the withholding requirements.  More developments related to the 1099-MISC withholding requirement are expected, so check our website for updates.

http://www.revenue.pa.gov/GeneralTaxInformation/TaxLawPoliciesBulletinsNotices/Documents/Informational%20Notices/info_notice_pit_2017-01.pdf

http://www.revenue.pa.gov/GeneralTaxInformation/Tax%20Types%20and%20Information/EmployerWithholding/Documents/1099-MISC_Fact_Sheet.pdf

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2023 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on
Contractors May Benefit From SALT Cap Workaround
New Pennsylvania Annual Report Filing Requirement
PA PIT Section 179 Deduction
OHIO H.B. 33 Contains Significant Tax Changes
State Tax Considerations in a Remote Environment
Ohio Enacts Pass-Through Entity Tax
Register to receive our weekly newsletter with our most recent columns and insights.
Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us
contact us
Pittsburgh

This site uses cookies to ensure that we give you the best user experience. Cookies assist in navigation, analyzing traffic and in our marketing efforts as described in our Privacy Policy.

×