Where participants recognize compensation income in connection with stock compensation,
the company has a reporting obligation with respect to this income and is also sometimes
required to withhold taxes on the income. This article summarizes the U.S. tax withholding
and reporting requirements for stock compensation.
Businesses and nonprofits operating in Pennsylvania that hire independent contractors or corporate directors who live outside of Pennsylvania, or that pay rent on Pennsylvania property to landlords living outside of Pennsylvania, must carefully consider new Pennsylvania withholding rules that will be enforced beginning on July 1, 2018.
With increasing frequency, U.S. companies are electing or appointing non-U.S. tax residents to serve on their board of directors. Therefore, it is important to be aware of the U.S. and foreign tax obligations that must be met and issues that arise when a U.S. nonresident director joins the board.
When nonemployee directors reside outside the United States, companies may have to withhold US federal income tax on compensation paid to them.
A new law in Pennsylvania could require companies to withhold PA personal income tax on compensation paid to nonresident outside directors and other nonemployees.
An explanation of why you can't withhold taxes for outside directors (and other nonemployees), no matter how much they might want you to.
Everything you need to know about U.S. year-end tax reporting!
IRS instructions for completing Form 1099-MISC.
Submission of Federal Form 1099-MISC and withholding on Pennsylvania-source nonemployee compensation, business income and lease payments.
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