The Treasury Department (TD) revises and publishes the new versions of the Withholdings Vouchers and of the Informative Declarations that must be submitted annually by an employer or withholding agent. Thus, the TD issued the Internal Revenue Bulletin No. 18-18 (BI RI 18-18) to inform on the new Withholding Vouchers and Informative Declarations for 2018, and of the most significant changes made to those forms.
BI RI 18-18 also indicates that all Withholding Vouchers Salary and Informative Declarations for 2018 must be filed only through the Internal Revenue Unified System (SURI). It will also publish another bulletin to provide details on the electronic filing process of such forms.
Following, we present an outline of the changes and new items to be included in the Informative Declarations. Some of which will be Optional for 2018 but will be Required for 2019.
Withholding Voucher and Correction of the Withholding Voucher-Forms-499R-2/W-2PR and 499R-2c/W-2cPR
- Employers must indicate if the compensation informed on the form includes payments to employees for:
- Services provided by a qualified physician that owns a decree under Law 14-2007, known as the Incentives Law for the Retention and Return of Doctors.
- Domestic services rendered at the residence, local college club, or local chapter of a fraternity or sorority ( for Social Security purposes).
- Any other service that the RD requires by means of rulings, administrative determination, or circular letter, on which payments must be declared.
- Three new exempt salaries have been added:
- Disaster Payments as declared by the Governor of Puerto Rico or the President of the USA.
- Payment to public employees under the Voluntary Transition Program, according to Administrative Orders 2017-05 and 2017-06 issued by Financial Advisory Authority and the Puerto Rico Fiscal Agency (AAFAF).
- Compensation for dismissal.
Informative Declaration – Income Not Subject to Withholding -Form 480.6A
The following must be informed:
- The total amount of special contributions for professional and consulting services according to Law 48-2013, as amended. This box will be used exclusively by government agencies and public corporations as well as by the Legislature, the Comptroller’s Office, the Office of the Attorney General, and the Judicial Branch, to inform of the 1.5% charge of the total amount of the professional services contract with the Government.
- The amount of returns made to the provider of services for expenses paid and that were presented in separate invoices.
- All medical insurance companies must indicate the amount of deductibles, co-pays, and co-insurance that the insured must pay to the provider of medical services, according to the contract signed by the Insurance Company and the provider of such services. This item is Optional for 2018 but will be required in 2019.
- The total amount paid for insurance premiums directly related to the operation of an industry or business. This item is Optional for 2018 but will be required in 2019.
- The total amount paid for telecommunication services directly related to the operation of an industry or service. This item is Optional for 2018 but will be required in 2019.
- The total amount paid for advertising, publicity, and marketing directly related to the operation of an industry or service. This item is Optional for 2018 but will be required in 2019.
- The total amount paid for Internet access services and cable or satellite television services directly related to the operation of an industry or service. This item is Optional for 2018 but will be required in 2019.
- The total amount paid by any industry or business for the right to use intangible goods. This item is Optional for 2018 but will be required in 2019.
Informative Declaration – Income Subject to Withholding -Form 480.6B
The following must be informed:
- The total amount of special contributions for professional and consulting services according to Law 48-2013, as amended. This box will be used exclusively by government agencies.
- The amount of returns made to the provider of services for expenses paid and that were presented in separate invoices.
- All medical insurance companies must indicate the amount of deductibles, co-pays, and co-insurance that the insured must pay to the provider of medical services, according to the contract signed by the Insurance Company and the provider of such services. This item is Optional for 2018 but will be required in 2019.
- All payments made for services rendered by a qualified physician that owns a decree under Law 14-2007 must be informed on the section titled Payment for Services Rendered by Individuals and Payments made by Corporations and Partnerships–Amount Paid column.
Reconciliation Statement for Income Subject to Withholding-Form 480.6B.1
Brokers, agents, and other financial intermediaries that report a contribution that was retained and deposited by the issuer or entity that made the payment must fill out Part III of the Form. This item is Optional for 2018 but will be required in 2019.
Annual Income Tax Return on Withholdings at Source-Non-residents- Form 480.30
Brokers, agents, and other financial intermediaries that report a contribution that was retained and deposited by the issuer or entity that made the payment must fill out Part III of the Form. This item is Optional for 2018 but will be required in 2019.
Informative Declaration – Exempt and Excluded Income and Exempt Income Subject to Alternate Basic Taxes –Form 480.6D
- The box titled Compensation for Dismissal was eliminated as it will be informed as exempt salaries on the Withholding Voucher.
Form 480.7A – Informative Declaration – Mortgage Interests
The exact location of the property that guarantees the mortgage loan must be indicated.
Informative Declaration – Retirement and Annuity Plans -Form 480.7C
The amount of the distribution corresponding to exempt income must be informed.
New Reconciliation Statements for 2018
BI RI 18-18 also informs on the creation of two new Forms:
- Form 480.7B.1 – Annual Reconciliation Statement on Taxes Retained for IRA Accounts and Educational Contribution Accounts: The Withholding Agent must summarize the total amount of withholdings by category that was informed on Forms 480.7-Informative Declaration-IRA Account; and 480.7B-Informative Declaration-Educational Contribution Account.
- Form 480.7C.1 – Annual Reconciliation Statement for Withholdings on Retirement and Annuity Plans: The Withholding Agent must summarize the total amount of withholdings by category that was informed on Form 480.7C- Informative Declaration-Retirement and Annuity Plans.
Please remember that on December 10, 2018, the TD updated the SURI platform; therefore, all transactions related to the Withholding of Salaries Vouchers and Informative Declarations must be made through SURI. Please refer to our bulletin titled: “TREASURY DEPARTMENT POSTPONES DUE DATE FOR TAX RETURNS AND TRANSACTIONS”.
Please be advised that the TD eliminated the pre-assignment of control numbers. The control number must consist of a maximum of nine (9) digits and cannot be repeated by form type and/or tax year of the withholding agent.
In addition, from December 6, 2018, any inquiry or printing of W-2 Forms and Informative Declarations will not be available through the Virtual Collections Center. From December 10 and thereon, the printing of these forms will be available through SURI. The taxpayer must be registered at SURI to be able to print these forms.
NOTE: Please contact us to obtain detailed information, discuss your individual case, and coordinate actions to be taken on your behalf.
