Carnegie Mellon University
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Important PA Form REV-1832 Withholding Tax Information

Pennsylvania Act 43 of 2017 – Nonresident Withholding

As of July 1, 2018, the university will withhold the required 3.07% Pennsylvania income tax on the following payments:

  • Payments reported on a Form 1099-NEC of Pennsylvania source non-employee compensation or business income to a non-resident individual or a single member LLC with a nonresident owner.
  • A lessee of Pennsylvania real estate who makes a lease payment in the course of a trade or business to a non-resident individual, individual of a single member LLC, estate or trust.

Nonresident Withholding Exemption Certificate

As a result of the withholding obligation, suppliers who wish to be considered for exemption from the 3.07% income tax withholding must complete a Pennsylvania Form REV-1832 Nonresident Withholding Exemption Certificate [.pdf] (PA Withholding Exemption). The supplier should sign and complete the following sections: Payor Information, Payee Information, Exemption Reason, and Certification of Payee. If the supplier is using the exemption certificate provided through PaymentWorks, the Payor section is already completed.

Supplier Information Form – US Instructions for PA Income Tax Withholding Question

To assist you with the PA Income Tax Withholding requirements, please review the following guidance.

Pennsylvania income tax is required to be withheld at a rate of 3.07% on payments reported on a Form 1099-NEC of Pennsylvania source non-employee compensation or business income to a non-resident individual or a single member LLC with a nonresident owner. This nonresident withholding requirement does not apply to payments for goods and materials or wages paid to employees.

  1. If Form W-9’s Box 3 “Individual/sole proprietor or single-member LLC” or “Trust/Estate” is checked, a supplier may be subject to PA income tax withholding. 
    1. If the individual/sole proprietor or member of the single-member LLC or Trust/Estate is not a resident of PA (see Pennsylvania Form REV-1832 [.pdf] for guidance on PA residency), the supplier may be subject to PA withholding.
    2. If the supplier is not a resident of PA and is providing services to CMU inside the Commonwealth of Pennsylvania, the supplier is subject to PA income tax withholding.

2. If any other option is selected on Form W-9 in box 3 besides “Individual/sole proprietor or single-member LLC” or “Trust/Estate”, the supplier is not subject to PA income tax withholding. Complete the Nonresident Withholding Exemption Certificate and upload it to PaymentWorks.

3. If the supplier is providing services OUTSIDE of the Commonwealth of Pennsylvania or if NO SERVICES are being provided to CMU (i.e. the sale of goods/products), the supplier is not subject to PA income tax withholding. Complete the Nonresident Withholding Exemption Certificate and upload it to PaymentWorks.

On the Nonresident Withholding Exemption Certificate, the supplier should sign and complete the following sections: Payor Information, Payee Information, Exemption Reason, and Certification of Payee. If the supplier is using the exemption certificate provided through PaymentWorks, the Payor section is already completed.