On January 1, 2018, Pennsylvania’s Act 43 became law requiring anyone that pays Pennsylvania source non-employee compensation to a non-resident and must file a Federal Form 1099-MISC to withhold 3.07% state income tax from these payments. This applies to any locum tenens organizations currently providing temporary physicians within the state. Locum tenens agencies that have yet to recognize the recently passed legislation by making the appropriate adjustments to their payroll should do so immediately. Businesses who fail to comply with this new law will be held liable and incur financial penalties (with interest) beginning July 1, 2018.
Staffing firms have semi-weekly, semi-monthly, monthly, or quarterly withholding and remittance schedules available to them. Annual withholding statements (REV-1667) along with 1099-MISC must be filed by January 31 of the following year with the Pennsylvania Department of Revenue.
For more information on Act 43’s requirements as it relates to your specific staffing organization, please refer to the following link: https://bit.ly/2neJ7nV.
Pennsylvania’s new law is another reminder of the importance for locum tenens organizations to remain cognizant of the most current tax laws in every state.
If you have further questions regarding how Pennsylvania’s Act 43 affects your locum tenens payroll, please contact the state’s Department of Revenue (www.revenue.pa.gov) or consult your tax professional.