Doing Business with UMass Lowell

Tax Reporting

In accordance with IRS regulations, the University will issue 1099 and 1042 forms to all applicable vendors who have done business with the UMass system. These forms will be mailed on or before January 31. For more information, see the University of Massachusetts' Treasurer's Office sections regarding 1099 vendor tax reporting and 1042 payroll tax reporting.

Performer Tax Withholding

To comply with Massachusetts regulations, the University must withhold a 5.20% state income tax on payments made to performers or performing entities unless: (1) withholding has been waived by the Massachusetts Department of Revenue (MA DOR) before the payment is made; or (2) the University anticipates that payments to the performer or performing entity will not exceed $5,000 during the calendar year. The withheld taxes will be deposited with the MA DOR after the performance takes place and will be reported on Form 1099-MISC or Form 1042-S. An individual can claim the withheld taxes as a credit on his or her Mass. personal income tax return (Form 1 or Form 1 NR/PY). A performing entity, however, must allocate the withheld taxes among its members, whether they are individuals or legal entities. This is accomplished on Form PWH-WA. The process of dividing the withheld amount among members of a performing entity continues until the recipient of a Form PWH-WA is an individual. The individuals can get credit for the taxes by filing MA personal income tax returns. 

Currently, performer withholding taxes cannot be taken as a credit on any other type of MA tax return. It is important, therefore, that performing entities unable to allocate taxes to individual performers obtain waivers from the MA DOR whenever possible.

Waivers: A performer or performing entity may file a request with the MA DOR that withholding be waived or that the payment to which the tax rate is applied be reduced by the performer’s expenses. The request that withholding be waived is made on Form PWH-WW. The request that withholding be reduced is made on Form PWH RW. These forms are filed with the MA DOR (not the University) and are available at the DOR website. If the DOR grants a waiver or reduces the amount to which the tax rate must be applied, the DOR will notify both the performer and the University in writing. (Generally the DOR will issue waivers for residents of MA who are current with their MA tax obligations, performing entities that maintain an office in MA and are current with their MA tax obligations, and performers or performing entities that will not have sufficient income to subject the affected performers to personal income tax in MA.)

IMPORTANT:  Generally, the University cannot refund PWH taxes after the taxes have been deposited with the Massachusetts Department of Revenue. Since taxes are deposited soon after the performance has taken place, it is important that the University receive the waiver before the performance takes place. A performing entity eligible for a waiver should apply for it immediately upon signing a contract or making an agreement to perform at the University. Also, it is recommended that the performing entity notify the University that a waiver application is being processed.

For more detailed information about Massachusetts Performer Withholding, “A Guide to Withholding Taxes on Performers and Performing Entities” (pdf)  is available at the Massachusetts Department of Revenue website.