What are the new reporting and withholding requirements for government entities and when do they take effect?
The Tax Increase Prevention and Reconciliation Act of 2005 includes a provision requiring government entities to withhold 3 percent from one-time payments of $10,000 or more to most vendors. While these new requirements were originally supposed to apply to all payments after Dec. 31, 2010, The American Recovery and Reinvestment Act of 2009 pushed the implementation date back to Dec. 31, 2011. For more on these requirements, including possible exemptions, see Governments Face New Reporting Requirements.
