Terms for Nonresident Withholding

Lessor/Payee – For purposes of nonresident withholding, the terms “payee or lessor” are used to describe any person or entity that receives payment from a payor. The department may also refer to the payee as the “vendor.” For this requirement, the payee/lessor is the out-of-state individual.

Lessee/Payor – For purposes of nonresident withholding, a payor is an individual, estate, trust or business that makes payments to a payee. 

Independent contractor – An independent contractor is an individual or entity that contracts to perform services. Employees are not independent contractors.

Agent – An agent is any person or entity having the control, receipt, custody, disposal or payment of Pennsylvania source income. Generally, this responsibility is authorized by a commercial lease agreement or contract (i.e. management company).