H2R CPA Blog
Tax Reform Resource Center
by H2R CPA Team
The Tax Cuts and Jobs Act changed the way tax is calculated. As a result, the IRS encourages everyone to perform a “paycheck checkup” to see if you have the right amount of tax withheld for your personal situation.
People who are especially encouraged to check their withholding using the IRS Withholding Calculator are those who:
See article below from the IRS website for details and contact H2R CPA at 412-391-2920 or firstname.lastname@example.org with any questions you may have.
IRS urges 'Paycheck Checkup' for key groups; tax withholding may need adjustment
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:
Contact H2R CPA at 412-391-2920 or email@example.com if you have questions regarding Pennsylvania’s agreement to delay 1099-MISC assessments. Our H2R CPA team would be happy to assist you.
by Rick Tonarelli, CPA, Tax Senior Manager
Effective January 1, 2018, Pennsylvania requires payors of certain PA source income to withhold PA income tax from such payments. The withholding pertains only to non-employee compensation and business income (including royalties and bonuses) paid to non-resident individuals (or disregarded entities with a non-resident owner), for which a Federal 1099-MISC will be filed. Withholding of tax is required for payments of $5,000 or more annually, and is optional on payments of less than $5,000.
In general, governmental payors are exempt from this requirement, including The United States government, the Commonwealth of Pennsylvania, their agencies, instrumentalities, and any political subdivisions of Pennsylvania.
A payment is considered "non-employee compensation" if it is made to: (i) someone who is not your employee; and (ii) for services in the course of your trade or business.
Further, lessees of PA real estate making "lease payments" to non-resident lessors are also required to withhold personal income tax on such payments. Residential rental payments are exempt from the withholding requirement.
The withholding amount is equal to the specified rate, which is currently 3.07%, multiplied by the gross amount paid.
In circumstances where the payor is unsure of the total amount of annual payments, it is recommended to withhold and remit PA income tax on all payments to the payee.
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For additional insight and expertise, visit the following blogs from some of our CPAAI member firms:
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