by Nate DeFilippi, CPA, MBA
In response to a request from the Pennsylvania Institute of Certified Public Accountants (PICPA), The Pennsylvania Department of Revenue (DOR) has agreed to delay the implementation of new 1099-MISC withholding requirements.
Act 43 of 2017 introduced a new and more complicated withholding requirement for Pennsylvania businesses. Beginning January 1, 2018, certain payors of Pennsylvania-source income and lessees of Pennsylvania real estate of at least $5,000 to non-resident individuals, as well as single-member LLCs that have a nonresident individual member, will now be obligated to withhold Pennsylvania personal income tax on these payments.
In response to this increased administrative burden and the additional costs to become compliant for Pennsylvania businesses, the Pennsylvania DOR has taken the following actions:
- Form 1099-MISC income that is subject to the withholding provisions of Act 43 of 2017 will not be subject to assessment for a failure to withhold for a period ending prior to July 1, 2018. However, when tax is withheld, it must be filed and remitted as required by law.
- The Pennsylvania DOR expects that payors/lessors will timely file the related 1099-MISC, with boxes 16 and 17 completed, with the department in January 2019.