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[Curtis Cruz]

?Hi, my name is Curtis, and I am the Microsoft Dynamics GP Administrator here at my company Apex Global Solutions.

Our business revolves around providing financial services to healthcare facilities. We do the accounting for over 100 healthcare facilities located in Texas, Florida and Pennsylvania as well as New York.

We currently use Binary Stream’s MEM which helps tremendously with our bookkeeping for the facilities.

Beginning January 1st, 2018, anyone that pays Pennsylvania – source non- employee compensation or business income to a non-resident individual and is required to file a Federal Form 1099-MISC is required to withhold from such payments an amount equal to the tax rate of 3.07%.

I am wondering if anyone out there in the GP community that may do business in the sate of Pennsylvania can enlighten me as to how you are able to account for this new law using GP, any third parties or tools?

I’ve attached a pdf explaining the new Pennsylvania withholding rule. We here at Apex just pay vendors for 1099 MISC and are not involved with any rent, interest or realestate 1099’s.

Anyone?

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Curtis Cruz
Database Administrator
Apex Healthcare Partners LLC
Montebello NY
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[Habib Salim]

There isnt a great way to do this in the AP module.
Here are two options:
– enter a purchase tax.  Con: tax is added to the purchase amound so you have to fiddle with the purchase price to get it working right.  Pro: tax is calculated automatically

– enter the tax  as a trade discount. Pro: Amount is deducted from purchase price; CAn ener tax as trade discount pct in vendor card for automatic calculation
con:  you may have to use a special check /remittance stub to show deduction as 1099 Tax; It does not look like you receive trade disounts, but if you do – from this vendor – you may be out of luck.

 you can credit this tax amount to a separate GL acct and pay it out at the end of the reporting period.

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Habib Salim
HSalim & Co. Inc.
Bronxville NY
https://pivotviews.com
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[Michelle McDonald]

Hi there,

I’ve just become aware of a similar rule in CA (groan!), and I believe we may have to tweak our practices here to comply.

Apparently if we pay more than $1500/year of California source income to a CA nonresident, we have to do backup withholding at 7%.  We do pay out of state contractors for work done in CA, so I’m guessing we’re subject to this reg.

I’ll share what we find, and how we adjust to comply as needed, in case this might be helpful to others. 

Curtis, I’m interested to hear how your company handles this, so please keep us posted.  Thanks.

Michelle

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Michelle McDonald
Director of Finance
The Annenberg Foundation
Los Angeles CA
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[Thaddeus Suter]

I would just use the built in GP Vendor Withholding Options. Though this was put in for Australia withholding tax on contractor payments, it works fine for any type of vendor withholding at time of payment.
The rates can be different (if needed) per vendor and the withheld amount is automatically set up as a voucher on the withholding vendor when the payment is made to the originating vendor(s).

It’s designed for a single withholding vendor but if you ever need more than one there are some tricks to accomplish that as well.

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Thaddeus Suter
Retus, Inc
HELOTES TX
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