February 7, 2018
Scopelitis Transportation Law Alert --- On January 1, 2018, a new Pennsylvania non-employee withholding requirement will apply to business income paid to non-resident workers. The withholding requirement will apply to independent contractors who are non-residents but who provide services in Pennsylvania and receive Pennsylvania source income of $5,000 or more annually.
The withholding requirement only applies to individuals and disregarded entities. A payor is liable for the tax that should have been collected (plus penalties and interest). Where withholding is not done and the tax is paid, the Department cannot collect the tax that has been paid, but the payor may still be liable for the penalties and interest due to any late payments.