Pennsylvania Withholding and 1099-Misc Requirements

Pennsylvania Department of Revenue has released a fact sheet discussing when payers of Pennsylvania source income and lessees of Pennsylvania real estate to non-residents must withhold and when a copy of Federal Form 1099-MISC must be filed with Pennsylvania.

Beginning January 1, 2018, anyone making the following payments must withhold at the personal income tax rate (3.07%) :

  • Pennsylvania source non-employee compensation or business income to a nonresident individual or disregarded entity with a non-resident member; or
  • Lessees of Pennsylvania real estate who make lease payments in the course of a trade or business to a non-resident lessor.

Withholding is optional for payers or lessees paying less than $5,000 annually. Any taxpayer required to withhold must apply for a 1099-MISC withholding account by completing a PA-100 Pennsylvania Enterprise Registration Form.

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