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3402(t) Withholding of Payments

Former Member
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Is SAP developing a solution, or has anyone developed a solution, for the Mandatory Contractor Withholding of 3% by Governmental Entities that begins after December 31, 2011? In short, on January 1, 2012 we will need to begin withholding 3% of all payments made and then remit those amounts to the IRS on a regular basis (based on our total dollars spent it will be every day or twice a week). This attachment has more details and even provides links to further information concerning the mandatory withholding. http://www.irs.gov/govt/fslg/article/0,,id=204409,00.html

Thanks.

1 ACCEPTED SOLUTION

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Gregg,

There is a bit of standard functionality called "Extended WIthholding Tax" that can be configured to address some of the requirements.

I'm working the same issue from the other side of the coin - dealing with the requirements of the government contractors, so I don't know if this will cover all of your needs, but it should be a good place for you to start!

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Gregg,

There is a bit of standard functionality called "Extended WIthholding Tax" that can be configured to address some of the requirements.

I'm working the same issue from the other side of the coin - dealing with the requirements of the government contractors, so I don't know if this will cover all of your needs, but it should be a good place for you to start!

Former Member
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On April 21 2011 Robyn Seaton from SAP held a webinar on this subject. She said SAP is working on this; however, there are a lot of unknowns as all the specifics have not been resolved. Therefore, there is nothing out there at this time. It was my understanding that the public sector would essentially have 6 months from the time the details were finalized before they actually had to start doing this. Of course all this is vague and I'm sure we're all crossing our fingers hoping the Federal government discards this mandate since they get the money eventually.

From Robyn's presentation, it sounded like SAP would provide a solution if you were on ECC 6.0. I've tried to get specific clarification for 4.7, but have received no response from Robyn at this time in the conference it was a vague uncertainty. Guess I'll try the consulting route or our account manager to see if I can get a definitive answer. I would hope so since this would be a government mandate.