In July 2012, we issued an Insight that highlighted the major changes to the Pennsylvania Tax Reform Code of 1971 as a result of Governor Tom Corbett signing House Bill 761 into law. One of those changes was the requirement that payors of amounts due under oil and gas leases issue a form 1099-MISC to non-corporate recipients of such payments. Furthermore, the law also requires payors under these arrangements to file a copy of the form 1099-MISC with the Pennsylvania Department of Revenue ("Department").
In order to assist taxpayers in complying with this additional administrative requirement, the Department has issued Informational Notice Personal Income Tax 2012-12 ("Notice"). The Notice provides a summary of the new law and discusses the following:
- Background of the new law, including determining applicability
- Filing requirements for entities subject to employer withholding in Pennsylvania
- Filing requirements for entities not subject to employer withholding in Pennsylvania
- Procedures for submitting corrected forms
- General reporting requirements
An item of note the Notice fails to mention, but that taxpayers should be mindful of, are the hefty penalties for noncompliance.
If you believe you may be subject to Pennsylvania's new form 1099-MISC reporting requirement, please access the Notice by following the above link. If you have any questions or concerns after reviewing the Notice, please contact a member of our State and Local Tax (SALT) at your earliest convenience.
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This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.