PA’s New 2018 1099 Tax Withholding Law for Non-Residents 

A new Pennsylvania tax law went into effect January 1, 2018 that will change the withholding amount for non-resident payees. Pennsylvania payors and lessees are now required to withhold and remit to the state of Pennsylvania 3.07% of payments totaling $5,000 or greater made to non-residents who receive 1099-MISC tax forms. The withholding is optional, but encouraged, for payments less than $5,000. The new law also applies to rent or lease payments to individuals, estates, and trusts.

To accommodate this new law, you may need to make changes to your accounting software or develop a workaround until the software is updated with this new requirement. Contact us to learn more about this new law and how it may affect your accounting solution.