Beginning in tax year 2018 (filing in 2019), all non-resident payments reported on 1099-MISC will be subject to Pennsylvania withholding taxes (3.07%).
Happy New Year! With the new year comes a change from the Pennsylvania Department of Revenue:
Effective January 1, 2018, any non-compensation payments made to non-residents and reported on 1099-MISC must have Pennsylvania taxes (3.07%) withheld. Payments totaling less than $5,000 for the calendar year are not required to have taxes withheld.
Follow this link to more detailed information from the Pennsylvania Department of Revenue.
If this applies to your company, PaySmart will assume all payments will exceed $5,000 for the year and will remit withheld taxes as required.
Not sure if this applies to your company or need more information? Email PaySmart and we’ll be happy to discuss answer your questions.