Regular Session 2021-2022 House Bill 1059 P.N. 2658

PRIOR PRINTER'S NOS. 1093, 1630

PRINTER'S NO. 2658

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1059

Session of

2021

INTRODUCED BY HICKERNELL, BROOKS, CIRESI, DUNBAR, FREEMAN,

GREINER, JAMES, JOZWIAK, MENTZER, MILLARD, PICKETT, RYAN,

SAINATO, SAYLOR, THOMAS, ZIMMERMAN, RADER AND ARMANINI,

MARCH 31, 2021

AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES,

JANUARY 25, 2022

AN ACT

Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An

act relating to tax reform and State taxation by codifying

and enumerating certain subjects of taxation and imposing

taxes thereon; providing procedures for the payment,

collection, administration and enforcement thereof; providing

for tax credits in certain cases; conferring powers and

imposing duties upon the Department of Revenue, certain

employers, fiduciaries, individuals, persons, corporations

and other entities; prescribing crimes, offenses and

penalties," in personal income tax, further providing for

withholding tax requirement for nonemployer payors, for

information statement for nonemployer payors, for information

statement for payees and for declarations of estimated tax,

providing for electronic payment and further providing for

requirements concerning returns, notices, records and

statements and for additions, penalties and fees.

DECLARATIONS OF ESTIMATED TAX.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Sections 316.2(a), 317.1, 317.2 and 325(d) of the

act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code

of 1971, are amended to read:

SECTION 1. SECTION 325(A) AND (D) INTRODUCTORY PARAGRAPH OF

THE ACT OF MARCH 4, 1971 (P.L.6, NO.2), KNOWN AS THE TAX REFORM

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CODE OF 1971, ARE AMENDED TO READ:

Section 316.2. Withholding Tax Requirement for Nonemployer

Payors.--(a) To the extent not already required to withhold tax

on payments under section 316.1, a person that:

(1) makes payments of income from sources within this

Commonwealth described in section 303(a)(1) or (2) to either a

nonresident individual or an entity that is disregarded under

section 307.21 that has a nonresident member; and

(2) is required under section 335(f)(1) to file a copy of

form [1099-MISC] 1099-NEC with the department regarding the

payments;

shall deduct and withhold from the payments an amount equal to

the net amount of the payments multiplied by the tax rate

specified under section 302(b).

* * *

Section 317.1. Information Statement for Nonemployer

Payors.--Every payor required to deduct and withhold tax under

section 316.2 shall furnish to a payee to whom the payor has

paid income from sources within this Commonwealth during the

calendar year a copy of form [1099-MISC] 1099-NEC required under

section 335(f)(1). The copy of form [1099-MISC] 1099-NEC

required by this section for each calendar year shall be

forwarded to the payee on or before March 1 of the year

succeeding the calendar year.

Section 317.2. Information Statement for Payees.--Every

payee receiving a copy of form [1099-MISC] 1099-NEC from a payor

under section 317.1 shall file a duplicate of such information

return with the payee's State income tax return.

Section 325. Declarations of Estimated Tax.--* * *

(d) Except as hereinafter provided, the date for filing a

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declaration of estimated tax shall depend upon when the resident

or nonresident individual, trust or estate determines that his

or its income on which no tax has been withheld under this

article can reasonably be expected to exceed [eight thousand

dollars ($8,000)] twenty thousand dollars ($20,000) in the

taxable year, as follows:

(1) If the determination is made on or before April 1 of the

taxable year, a declaration of estimated tax shall be filed no

later than April 15 of the taxable year.

(2) If the determination is made after April 1 but before

June 2 of the taxable year, the declaration shall be filed no

later than June 15 of such year.

(3) If the determination is made after June 1 but before

September 2 of the taxable year, the declaration shall be filed

no later than September 15 of such year.

(4) If the determination is made after September 1 of the

taxable year, the declaration shall be filed no later than

January 15 of the year succeeding the taxable year.

* * *

Section 2. The act is amended by adding a section to read:

Section 332.1. Electronic Payment.--Any payment in the

amount of $5,000 or more remitted to the department for the tax

imposed under this article shall be remitted electronically as

prescribed by the department. This section shall not apply to

employer withholding payments under Part VII of this article and

section 9 of the act of April 9, 1929 (P.L.343, No.176), known

as The Fiscal Code, shall continue to apply to employer

withholding payments.

Section 3. Sections 335(f)(1) and (2) of the act are amended

to read:

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Section 335. Requirements Concerning Returns, Notices,

Records and Statements.--* * *

(f) The following apply:

(1) Any person who:

(i) makes payments of Pennsylvania source income that fall

within any of the eight classes of income enumerated in section

303(a);

(ii) makes such payments to an individual, an entity treated

as a partnership for tax purposes or a single member limited

liability company; and

(iii) is required to make a form [1099-MISC] 1099-NEC return

to the Secretary of the Treasury of the United States with

respect to such payments, shall file a copy of such form [1099-

MISC] 1099-NEC with the department [and send a copy of such form

1099-MISC to the payee by March 1 of each year or, if filed

electronically, by March 31 of each year] on the due date of the

form 1099-NEC. If the form [1099-MISC] 1099-NEC filed by a payor

with the Secretary of the Treasury of the United States [is not

completed in such a manner that] does not include the State

income and State tax withheld [information, currently boxes 16

through 18 on Federal form 1099-MISC, is reflected thereon] as

required under section 316.2, the payor shall update the copies

of form [1099-MISC] 1099-NEC to be provided pursuant to this

section to reflect such information prior to filing it with the

department and sending it to the payee.

(2) If the payor is required to perform electronic filing

for Pennsylvania employer withholding purposes, the form [1099-

MISC] 1099-NEC shall be filed electronically with the

department.

* * *

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Section 4. Section 352(f)(4) and (5) of the act are amended

and the section is amended by adding a subsection to read:

Section 352. Additions, Penalties and Fees.--* * *

(f) * * *

(4) Any person required to file a copy of form [1099-MISC]

1099-NEC with the department under the provisions of section

335(f) who wilfully furnishes a false or fraudulent form or who

wilfully fails to file the form in the manner, at the time and

showing the information required under section 335(f) shall, for

each such failure, be subject to a penalty of fifty dollars

($50).

(5) Any person required under the provisions of section

335(f) to furnish a copy of form [1099-MISC] 1099-NEC to a payee

who wilfully furnishes a false or fraudulent form or who

wilfully fails to furnish a form in the manner, at the time and

showing the information required by section 335(f) shall, for

each such failure, be subject to a penalty of fifty dollars

($50).

* * *

(k) If a tax payment is made and the payment does not comply

with section 332.1 when required, the taxpayer who is liable for

the tax shall, in addition to any other penalty, interest or

addition provided by law, be liable for a penalty of three per

cent of the payment remitted not to exceed five hundred dollars

($500).

SECTION 325. DECLARATIONS OF ESTIMATED TAX.--(A) (1) EVERY

RESIDENT AND NONRESIDENT INDIVIDUAL, TRUST AND ESTATE SHALL AT

THE TIME HEREINAFTER PRESCRIBED MAKE A DECLARATION OF HIS OR ITS

ESTIMATED TAX FOR THE TAXABLE YEAR, CONTAINING SUCH INFORMATION

AS THE DEPARTMENT MAY PRESCRIBE BY REGULATIONS, IF HIS OR ITS

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INCOME, OTHER THAN FROM INCOME ON WHICH TAX IS WITHHELD UNDER

THIS ARTICLE, CAN REASONABLY BE EXPECTED TO EXCEED [EIGHT

THOUSAND DOLLARS ($8,000).] THE FOLLOWING DOLLAR AMOUNT FOR THE

APPLICABLE TAXABLE YEAR:

TAXABLE YEAR DOLLAR AMOUNT

2022 AND PRIOR $8,000

2023 9,500

2024 11,000

2025 14,000

2026 17,000

2027 20,000

(2) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 2027, THE

DOLLAR AMOUNT UNDER PARAGRAPH (1) SHALL INCREASE ANNUALLY BY

FIVE HUNDRED DOLLARS ($500). THE DEPARTMENT SHALL SUBMIT A

NOTICE CONTAINING THE NEW DOLLAR AMOUNT FOR THE TAXABLE YEAR TO

THE LEGISLATIVE REFERENCE BUREAU FOR PUBLICATION IN THE

PENNSYLVANIA BULLETIN.

* * *

(D) EXCEPT AS HEREINAFTER PROVIDED, THE DATE FOR FILING A

DECLARATION OF ESTIMATED TAX SHALL DEPEND UPON WHEN THE RESIDENT

OR NONRESIDENT INDIVIDUAL, TRUST OR ESTATE DETERMINES THAT HIS

OR ITS INCOME ON WHICH NO TAX HAS BEEN WITHHELD UNDER THIS

ARTICLE CAN REASONABLY BE EXPECTED TO EXCEED [EIGHT THOUSAND

DOLLARS ($8,000) IN THE TAXABLE YEAR,] THE DOLLAR AMOUNT UNDER

SUBSECTION (A), AS FOLLOWS:

* * *

Section 5 2. The amendment of section 325(d) of the act

shall apply to taxable years beginning after December 31, 2021.

Section 6 3. This act shall take effect immediately.

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