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Publication 51 - Main Content

Table of Contents

1. Taxpayer Identification Numbers

If you are required to withhold any federal income, social security, or Medicare taxes, you will need an employer identification number (EIN) for yourself. Also, you will need the social security number (SSN) of each employee and the name of each employee as shown on the employee's social security card.

Employer identification number (EIN).   An employer identification number (EIN) is a nine-digit number that the IRS issues. The digits are arranged as follows: 00-0000000. It is used to identify the tax accounts of employers and certain others who have no employees. Use your EIN on all of the items that you send to the IRS and SSA.

  If you do not have an EIN, you may apply for one online. Go to the IRS website at www.irs.gov. Click on the tab for businesses and go to “Employer ID Numbers.” Click on “Apply for an EIN online” and then “APPLY ONLINE NOW.” You may also apply for an EIN by calling 1-800-829-4933, or you can fax or mail Form SS-4 to the IRS. Do not use a social security number (SSN) in place of an EIN.

  If you do not have an EIN by the time a return is due, write “Applied For” and the date you applied for it in the space shown for the number. If you took over another employer's business, do not use that employer's EIN.

  See Depositing without an EIN in section 7 if you must make a tax deposit and you do not have an EIN.

  You should have only one EIN. If you have more than one, and are not sure which one to use, call the toll-free Business and Specialty Tax Line at 1-800-829-4933 (TTY/TDD users can call 1-800-829-4059). Provide the EINs that you have, the name and address to which each number was assigned, and the address of your principal place of business. The IRS will tell you which EIN to use.

  For more information, see Publication 1635, Understanding Your EIN, or Publication 583, Starting a Business and Keeping Records.

When you receive your EIN.   If you are a new employer that indicated a federal tax obligation when requesting an EIN, you will be pre-enrolled in the Electronic Federal Tax Payment System (EFTPS). You will receive information in your Employer Identification Number (EIN) Package about Express Enrollment and an additional mailing containing your EFTPS personal identification number (PIN) and instructions for activating your PIN. Call the toll-free number located in your “How to Activate Your Enrollment” brochure to activate your enrollment and begin making your employment tax deposits. Be sure to tell your payroll provider about your EFTPS enrollment. Consider using EFTPS to make your other federal tax payments electronically as well. You should activate your EFTPS enrollment now even if you plan to deposit using FTD coupons (Form 8109) because it may take 5 to 6 weeks to receive the coupons and you may be required to make a deposit while waiting for them.

Social security number (SSN).   An employee's social security number (SSN) consists of nine digits arranged as follows: 000-00-0000. You must obtain each employee's name and SSN as shown on the employee's social security card because you must enter them on Form W-2. You may, but are not required to, photocopy the social security card if the employee provides it. If you do not show the employee's correct name and SSN on Form W-2, you may owe a penalty unless you have reasonable cause. See Publication 1586, Reasonable Cause Regulations and Requirements for Missing and Incorrect Name/TINs.

Applying for a social security card.   Any employee without a social security card can get one by completing Form SS-5, Application for a Social Security Card, and submitting the necessary documentation to SSA. You can get Form SS-5 at SSA offices, by calling 1-800-772-1213, or from the SSA website at
www.socialsecurity.gov/online/ss-5.html. The employee must complete and sign Form SS-5; it cannot be filed by the employer. You may be asked to supply a letter to accompany Form SS-5 if the employee has exceeded his or her yearly or lifetime limit for the number of replacement cards allowed.

Applying for a social security number.   If you file Form W-2 on paper and your employee has applied for an SSN but does not have one when you must file Form W-2, enter “Applied For” on the form. If you are filing electronically, enter all zeros (000-00-0000) in the social security number field. When the employee receives the SSN, file Copy A of Form W-2c, Corrected Wage and Tax Statement, with the SSA to show the employee's SSN. Furnish Copies B, C, and 2 of Form W-2c to the employee. Up to five Forms W-2c per Form W-3c, Transmittal of Corrected Wage and Tax Statements, may be created and submitted to the SSA over the Internet. For more information, visit SSA's Employer W-2 Filing Instructions & Information webpage at www.socialsecurity.gov/employer. Advise your employee to correct the SSN on his or her original Form W-2.

Correctly record the employee's name.   Record the name and number of each employee as they are shown on the employee's social security card. If the employee's name is not correct as shown on the card (for example, because of marriage or divorce), the employee should request a corrected card from the SSA. Continue to report the employee's wages under the old name until he or she shows you an updated social security card with the new name.

  If SSA issues the employee a replacement card after a name change, or a new card with a different social security number after a change in alien work status, file a Form W-2c to correct the name/SSN reported on the most recently filed Form W-2. It is not necessary to correct other years if the previous name and SSN were used for years before the most recent Form W-2.

IRS individual taxpayer identification numbers (ITINs) for aliens.   Do not accept an individual taxpayer identification number (ITIN) in place of an SSN for either employee identification or for work. An ITIN is issued for use by resident and nonresident aliens who need identification for tax purposes, but who are not eligible for U.S. employment. The ITIN is a nine-digit number formatted like an SSN (for example, NNN-NN-NNNN). However, it begins with the number “9” and has either a “7” or “8” as the fourth digit (for example, 9NN-7N-NNNN or 9NN-8N-NNNN).

  
An individual with an ITIN who later becomes eligible to work in the United States must obtain an SSN. If the individual is currently eligible to work in the United States, instruct the individual to apply for an SSN and follow the instructions under Applying for a social security number, earlier. Do not use an ITIN in place of an SSN on Form W-2.

Verification of social security numbers.   The Social Security Administration (SSA) provides several ways for employers and authorized reporting agents to verify employee social security numbers (SSNs). These services may be used for wage reporting purposes only.

  • Internet. Use the Social Security Number Verification Service (SSNVS) to instantly verify up to 10 employee names and SSNs at a time, or submit an electronic file of up to 250,000 names and SSNs for an overnight response. Go to
    www.socialsecurity.gov/employer/ssnv.htm.

  • Telephone. Use the new Telephone Number Employer Verification (TNEV) service to verify up to 10 employee names and SSNs using SSA's automated telephone response system. TNEV is available 24 hours a day, 7 days a week, by calling the SSA National 800 Number (1-800-772-1213) or Employer Reporting Service Center (1-800-772-6270).

  • Paper. Verify up to 300 names and SSNs by submitting a paper request. For information, see Appendix A in the Social Security Number Verification Service (SSNVS) Handbook at www.socialsecurity.gov/employer/ssnvshandbk/appendix.htm.

Registering for SSNVS and TNEV.   You must register online and receive authorization from your employer to use SSNVS or TNEV. You cannot register through TNEV. To register, visit SSA's website at
www.socialsecurity.gov/employer and click on the Business Services Online link. Follow the registration instructions to obtain a user identification (ID) and password. You will need to provide the following information about yourself and your company.

  • Name.

  • Social security number.

  • Date of birth.

  • Type of employer.

  • Employer identification number (EIN).

  • Company name, address, and telephone number.

  • Email address.

When you have completed the online registration process, SSA will mail a one-time activation code to your employer. You must enter the activation code online to use SSNVS or TNEV.

2. Who Are Employees?

Generally, employees are defined either under common law or under statutes for certain situations.

Employee status under common law.   Generally, a worker who performs services for you is your employee if you have the right to control what will be done and how it will be done. This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed. Get Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee.

You are responsible for withholding and paying employment taxes for your employees. You are also required to file employment tax returns. These requirements do not apply to amounts that you pay to independent contractors. The rules discussed in this publication apply only to workers who are your employees.

In general, you are an employer of farmworkers if your employees:

  • Raise or harvest agricultural or horticultural products on your farm (including the raising and feeding of livestock);

  • Work in connection with the operation, management, conservation, improvement, or maintenance of your farm and its tools and equipment;

  • Provide services relating to salvaging timber, or clearing land of brush and other debris, left by a hurricane (also known as hurricane labor);

  • Handle, process, or package any agricultural or horticultural commodity if you produced over half of the commodity (for a group of up to 20 unincorporated operators, all of the commodity); or

  • Do work for you related to cotton ginning, turpentine, gum resin products, or the operation and maintenance of irrigation facilities.

For this purpose, the term “farm” includes stock, dairy, poultry, fruit, fur-bearing animal, and truck farms, as well as plantations, ranches, nurseries, ranges, greenhouses or other similar structures used primarily for the raising of agricultural or horticultural commodities, and orchards.

Farmwork does not include reselling activities that do not involve any substantial activity of raising agricultural or horticultural commodities, such as a retail store or a greenhouse used primarily for display or storage.

The table on page 25, How Do Employment Taxes Apply to Farmwork , distinguishes between farm and nonfarm activities, and also addresses rules that apply in special situations.

Crew Leaders

If you are a crew leader, you are an employer of farmworkers. A crew leader is a person who furnishes and pays (either on his or her own behalf or on behalf of the farm operator) workers to do farmwork for the farm operator. If there is no written agreement between you and the farm operator stating that you are his or her employee and if you pay the workers (either for yourself or for the farm operator), then you are a crew leader. For FUTA tax rules, see section 10.

Husband-Wife Business

If you and your spouse jointly own and operate a farm or nonfarm business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. See Publication 541, Partnerships, for more details. The partnership is considered the employer of any employees, and is liable for any employment taxes due on wages paid to its employees.

Exception—Qualified joint venture.   If you and your spouse materially participate (see Material participation on page F-2 of the Instructions for Schedule F) as the only members of a jointly owned and operated business, and you file a joint Form 1040, you can make a joint election to be taxed as a qualified joint venture instead of a partnership. Spouses electing qualified joint venture status are treated as sole proprietors for federal tax purposes. Either of the sole proprietor spouses may report and pay the employment taxes due on wages paid to the employees, using the EIN of that spouse's sole proprietorship.

Exception—Community income.   If you and your spouse wholly own an unincorporated business as community property under the community property laws of a state, foreign country, or U.S. possession, you can treat the business either as a sole proprietorship (of the spouse who carried on the business) or a partnership. You may still make an election to be taxed as a qualified joint venture instead of a partnership. See Exception—Qualified joint venture above.

3. Taxable Wages

Cash wages that you pay to employees for farmwork are generally subject to social security and Medicare taxes. If the wages are subject to social security and Medicare taxes, they are also subject to federal income tax withholding. You may also be liable for FUTA tax, which is not withheld by you or paid by the employee. FUTA tax is discussed in section 10. Cash wages include checks, money orders, etc. Do not count as cash wages the value of food, lodging, and other noncash items.

For more information on what payments are considered taxable wages, see Publication 15 (Circular E).

Commodity wages.   Commodity wages are not cash and are not subject to social security and Medicare taxes or federal income tax withholding. However, noncash payments, including commodity wages, are treated as cash wages (see above) if the substance of the transaction is a cash payment. These noncash payments are subject to social security and Medicare taxes and federal income tax withholding.

Family members.   Generally, the wages that you pay to family members who are your employees are subject to social security and Medicare taxes, federal income tax withholding, and FUTA tax. However, certain exemptions may apply for your child, spouse, or parent. See the table, How Do Employment Taxes Apply to Farmwork , on
page 25.

Household employees.   The wages of an employee who performs household services, such as a maid, babysitter, gardener, or cook, in your home are not subject to social security and Medicare taxes if you pay that employee cash wages of less than $1,700 in 2010.

  Social security and Medicare taxes do not apply to cash wages for housework in your private home if it was done by your spouse or your child under age 21. Nor do the taxes apply to housework done by your parent unless:

  • You have a child living in your home who is under age 18 or has a physical or mental condition that requires care by an adult for at least 4 continuous weeks in a calendar quarter, and

  • You are a widow or widower, or divorced and not remarried, or have a spouse in the home who, because of a physical or mental condition, cannot care for your child for at least 4 continuous weeks in the quarter.

  For more information, see Publication 926, Household Employer's Tax Guide.

  
Wages for household work may not be a deductible farm expense. See Publication 225, Farmer's Tax Guide.

Share farmers and alien workers.   You do not have to withhold or pay social security and Medicare taxes on amounts paid to share farmers under share-farming arrangements or on wages paid to alien workers admitted under section 101(a)(15)(H)(ii)(a) of the Immigration and Nationality Act on a temporary basis to perform agricultural labor (that is, “H-2(A)” visa workers).

4. Social Security and Medicare Taxes

Generally, you must withhold social security and Medicare taxes on all cash wage payments that you make to your employees.

The $150 Test or the $2,500 Test

All cash wages that you pay to an employee during the year for farmwork are subject to social security and Medicare taxes and federal income tax withholding if either of the two tests below is met.

  • You pay cash wages to an employee of $150 or more in a year for farmwork (count all cash wages paid on a time, piecework, or other basis). The $150 test applies separately to each farmworker that you employ. If you employ a family of workers, each member is treated separately. Do not count wages paid by other employers.

  • The total that you pay for farmwork (cash and noncash) to all your employees is $2,500 or more during the year.

Exceptions.   The $150 and $2,500 tests do not apply to wages that you pay to a farmworker who receives less than $150 in annual cash wages and the wages are not subject to social security and Medicare taxes, or federal income tax withholding, even if you pay $2,500 or more in that year to all of your farmworkers if the farmworker:

  • Is employed in agriculture as a hand-harvest laborer,

  • Is paid piece rates in an operation that is usually paid on a piece-rate basis in the region of employment,

  • Commutes daily from his or her permanent home to the farm, and

  • Had been employed in agriculture less than 13 weeks in the preceding calendar year.

  Amounts that you pay to these seasonal farmworkers, however, count toward the $2,500-or-more test to determine whether wages that you pay to other farmworkers are subject to social security and Medicare taxes.

Social Security and Medicare Tax Withholding

For wages paid in 2010 the social security tax rate is 6.2%, for both the employee and employer, on the first $106,800 paid to each employee. You must withhold at this rate from each employee and pay a matching amount.

The Medicare tax rate is 1.45% each for the employer and the employee on all wages. You must withhold at this rate from each employee and pay a matching amount.

Social security and Medicare taxes apply to most payments of sick pay, including payments made by third parties such as insurance companies. For details, see Publication 15-A.

Employee share paid by employer.   If you would rather pay a household or agricultural employee's share of the social security and Medicare taxes without withholding them from his or her wages, you may do so. If you do not withhold the taxes, however, you must still pay them. Any employee social security and Medicare taxes that you pay is additional income to the employee. Include it in the employee's Form W-2, box 1, but do not count it as social security and Medicare wages and do not include it in boxes 3 and 5. Also, do not count the additional income as wages for FUTA tax purposes. Different rules apply to employer payments of social security and Medicare taxes for non-household and non-agricultural employees. See section 7 of Publication 15-A.

Withholding social security and Medicare taxes on nonresident alien employees.   In general, if you pay wages to nonresident alien employees, you must withhold social security and Medicare taxes as you would for a U.S. citizen or resident alien. However, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for exceptions to this general rule.

Religious exemption.    An exemption from social security and Medicare taxes is available to members of a recognized religious sect opposed to public insurance. This exemption is available only if both the employee and the employer are members of the sect.

  For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers.

5. Federal Income Tax Withholding

Farmers and crew leaders must withhold federal income tax from the wages of farmworkers if the wages are subject to social security and Medicare taxes. The amount to withhold is figured on gross wages before taking out social security and Medicare taxes, union dues, insurance, etc. You may use one of several methods to determine the amount of federal income tax withholding. They are discussed in section 13.

Form W-4.   To know how much federal income tax to withhold from employees' wages, you should have a Form W-4, Employee's Withholding Allowance Certificate, on file for each employee. Encourage your employees to file an updated Form W-4 for 2010, especially if they owed taxes or received a large refund when filing their 2009 tax return. Advise your employees to visit the IRS website at
www.irs.gov/individuals and select the “IRS Withholding Calculator” link for help in determining how many withholding allowances to claim on their Form W-4. Ask each new employee to give you a signed Form W-4 when starting work. Make the form effective with the first wage payment. If a new employee does not give you a completed Form W-4, withhold tax as if he or she is single, with no withholding allowances.

Forms in Spanish.   You can provide Formulario W-4(SP) in place of Form W-4 to your Spanish-speaking employees. For more information, see Publicación 17(SP).

Effective date of Form W-4.   A Form W-4 remains in effect until the employee gives you a new one. When you receive a new Form W-4, do not adjust withholding for pay periods before the effective date of the new form. Do not adjust withholding retroactively. For exceptions, see Exemption from federal income tax withholding , IRS review of requested Forms W-4 , and Invalid Forms W-4 , later. If an employee gives you a replacement Form W-4, begin withholding no later than the start of the first payroll period ending on or after the 30th day from the date when you received the replacement Form W-4.

A Form W-4 that makes a change for the next calendar year will not take effect in the current calendar year.

Completing Form W-4.   The amount of federal income tax withholding is based on marital status and withholding allowances. Your employees may not base their withholding amounts on a fixed dollar amount or percentage. However, the employee may specify a dollar amount to be withheld in addition to the amount of withholding based on filing status and withholding allowances claimed on Form W-4.

  Employees may claim fewer withholding allowances than they are entitled to claim. They may do this to ensure that they have enough withholding or to offset other sources of taxable income that are not subject to withholding.

  Publication 505, Tax Withholding and Estimated Tax, contains detailed instructions for completing Form W-4. Along with Form W-4, you may wish to order
Publication 505 and Publication 919, How Do I Adjust My Tax Withholding, for your employees.

   Do not accept any withholding or estimated tax payments from your employees in addition to withholding based on their Form W-4. If an employee wants additional withholding, he or she should submit a new Form W-4 and, if necessary, pay estimated tax by filing Form 1040-ES, Estimated Tax for Individuals.

Exemption from federal income tax withholding.   Generally, an employee may claim exemption from federal income tax withholding because he or she had no federal income tax liability last year and expects none this year. See the Form W-4 instructions for more information. However, the wages are still subject to social security and Medicare taxes.

  A Form W-4 claiming exemption from withholding is valid for only one calendar year. To continue to be exempt from withholding in the next year, an employee must give you a new Form W-4 by February 15 of that year. If the employee does not give you a new Form W-4, withhold tax as if the employee is single with zero withholding allowances or withhold based on the last valid Form W-4 you have for the employee.

Withholding income taxes on the wages of nonresident alien employees.   In general, you must withhold federal income taxes on the wages of nonresident alien employees. However, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities for exceptions to this general rule.

Withholding adjustment for nonresident alien employees.   To reflect the Making Work Pay credit that was enacted by ARRA, a new procedure applies for figuring the amount of income tax to withhold from wages of nonresident alien employees performing services within the United States for wages paid in 2010. This procedure requires a new chart and new tables to be used with the withholding tables to determine the amount to withhold from the wages of the nonresident alien employee. See Withholding adjustment for nonresident aliens in section 9 of Publication 15 (Circular E).

Nonresident alien employee's Form W-4.   When completing Forms W-4, nonresident aliens are required to:

  • Not claim exemption from income tax withholding;

  • Request withholding as if they are single, regardless of their actual marital status;

  • Claim only one allowance (if the nonresident alien is a resident of Canada, Mexico, or Korea, he or she may claim more than one allowance); and

  • Write “Nonresident Alien” or “NRA” above the dotted line on line 6 of Form W-4.

  If you maintain an electronic Form W-4 system, you should provide a field for nonresident alien employees to enter nonresident alien status in lieu of writing “Nonresident Alien” or “NRA” above the dotted line on line 6.

  
Nonresident alien employees are no longer required to request additional withholding in the box for line 6 on Form W-4. However, a nonresident alien employee may request additional withholding at his or her option.

Form 8233.   If a nonresident alien employee claims a tax treaty exemption from withholding, the employee must submit Form 8233, Exemption from Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, with respect to the income exempt under the treaty, instead of Form W-4. See Publication 515 for details.

IRS review of requested Forms W-4.   In the past, you had to routinely send the IRS any Form W-4 claiming complete exemption from withholding if $200 or more in weekly wages was expected or claiming more than 10 allowances. Employers no longer have to submit these Forms W-4 to the IRS. However, Forms W-4 are still subject to review. When we refer to Form W-4, the same rules apply to Formulario W-4(SP), its Spanish translation.

  You may receive a notice from the IRS requiring you to submit copies of Forms W-4. Send the requested copy or copies of Form W-4 to the IRS at the address provided and in the manner directed by the notice. You may also be directed to make available for inspection by an IRS employee certain Forms W-4. The notice you receive from the IRS may relate to one or more of your named employees. IRS may also require you to submit copies of Form W-4 to the IRS as directed by a revenue procedure or notice published in the Internal Revenue Bulletin.

  After submitting a copy of the requested Form W-4 to the IRS, continue to withhold federal income tax based on that Form W-4 if it is valid (see Invalid Forms W-4 , later). However, the IRS may later notify you in writing that the employee is not entitled to claim a complete exemption from withholding or more than the maximum number of withholding allowances specified by the IRS in the written notice. The notice will also specify the applicable marital status for purposes of calculating the required amount of withholding. You are to withhold federal income tax based on the effective date shown on the notice using the maximum number of withholding allowances and marital status specified in the notice (commonly referred to as a “lock-in letter”).

Initial lock-in letter.   The IRS uses information reported on Form W-2 to identify employees with withholding compliance problems. In some cases, where a serious under-withholding problem is found to exist for a particular employee, the IRS may issue a lock-in letter to the employer specifying the maximum number of withholding allowances and marital status permitted for a specific employee. If the employee is employed by you as of the date of the notice, you must furnish the notice to the employee within 10 business days of receipt. You may follow any reasonable business practice to furnish the copy of the notice to the employee.

Implementation of lock-in letter.   When you receive the notice specifying the maximum number of withholding allowances and marital status permitted, you may not withhold immediately on the basis of the notice. You must begin withholding tax on the basis of the notice for any wages paid after the date specified in the notice. The delay between your receipt of the notice and the date to begin the withholding on the basis of the notice permits the employee to contact the IRS.

Seasonal employees and employees not currently performing services.   If you receive a notice for an employee who is not currently performing services for you, you are still required to furnish the notice to the employee and withhold based on the notice if any of the following apply.

  • You are paying wages for the employee's prior services and the wages are subject to income tax withholding on or after the date specified in the notice.

  • You reasonably expect the employee to resume services within 12 months of the date of the notice.

  • The employee is on a bona fide leave of absence that does not exceed 12 months or the employee has a right to reemployment after the leave of absence.

Termination and re-hire of employees.   If you are required to furnish and withhold based on the notice and the employment relationship is terminated after the date of the notice, you must continue to withhold based on the notice if you continue to pay any wages subject to income tax withholding. You must also withhold based on the notice or modification notice (see Modification notice next) if the employee resumes the employment relationship with you within 12 months after the termination of the employment relationship.

Modification notice.   After issuing the notice specifying the maximum number of withholding allowances and marital status permitted, the IRS may issue a subsequent notice (modification notice) that modifies the original notice. The modification notice may change the marital status and/or the number of withholding allowances permitted. You must withhold federal income tax based on effective date specified in the modification notice.

Employee provides you a new Form W-4 after IRS notice.   After the IRS issues a notice or modification notice, if the employee provides you with a new Form W-4 claiming complete exemption from withholding or claims a marital status, a number of withholding allowances, and any additional withholding that results in less withholding than would result under the IRS notice or modification notice, you must disregard the new Form W-4. You are required to withhold on the basis of the notice or modification notice unless the IRS subsequently notifies you to withhold based on the new Form W-4. If the employee wants to put a new Form W-4 into effect that results in less withholding than required, the employee must contact the IRS.

  If, after you receive an IRS notice or modification notice, your employee provides you with a new Form W-4 that does not claim exemption from federal income tax withholding and claims a marital status, a number of withholding allowances, and any additional withholding that results in more withholding than would result under the notice or modification notice, you must withhold tax on the basis of that new Form W-4. Otherwise, disregard any subsequent Forms W-4 provided by the employee and withhold based on the IRS notice or modification notice.

Substitute Forms W-4.   You are encouraged to have your employees use the official version of Form W-4 to claim withholding allowances or exemption from withholding. Call the IRS at 1-800-829-3676 or visit the IRS website at www.irs.gov to obtain copies of Form W-4.

  You may use a substitute version of Form W-4 to meet your business needs. However, your substitute Form W-4 must contain language that is identical to the official Form W-4 and your form must meet all current IRS rules for substitute forms. At the time that you provide your substitute form to the employee, you must provide him or her with all tables, instructions, and worksheets from the current Form W-4.

  You are prohibited from accepting a substitute Form W-4 developed by an employee, and the employee submitting such form will be treated as failing to furnish a Form W-4. However, continue to use any valid Forms W-4 developed by your employees that you accepted before October 11, 2007.

Invalid Forms W-4.   Any unauthorized change or addition to Form W-4 makes it invalid. This includes taking out any language by which the employee certifies that the form is correct. A Form W-4 is also invalid if, by the date an employee gives it to you, he or she indicates in any way that it is false. An employee who submits a false Form W-4 may be subject to a $500 penalty. You may treat a Form W-4 as invalid if the employee wrote “exempt” on line 7 and also entered a number on line 5 or an amount on line 6.

  When you get an invalid Form W-4, do not use it to figure federal income tax withholding. Tell the employee that it is invalid and ask for another one. If the employee does not give you a valid one, withhold taxes as if the employee was single and claiming no withholding allowances. However, if you have an earlier Form W-4 for this worker that is valid, withhold as you did before.

  For additional information about these rules, see Treasury Decision 9337, 2007-35 I.R.B. 455, available at
www.irs.gov/irb/2007-35_IRB/ar10.html.

Amounts exempt from levy on wages, salary, and other income.   If you receive a Notice of Levy on Wages, Salary, and Other Income— Forms 668-W(ACS), 668-W(c)(DO), or 668-W(ICS)), you must withhold amounts as described in the instructions for these forms. Publication 1494 (2010), Tables for Figuring Amount Exempt From Levy on Wages, Salary, and Other Income—Forms 668-W(ACS), 668-W(c)(DO), and 668-W(ICS), shows the exempt amount. If a levy issued in a prior year is still in effect and the taxpayer submits a new Statement of Exemptions and Filing Status, use the current year Publication 1494 to compute the exempt amount.

How To Figure Federal Income Tax Withholding

There are several ways to figure federal income tax withholding.

  • Wage bracket tables. See page 23 for directions on how to use the tables.

  • Percentage method. See page 23 for directions on how to use the percentage method.

  • Alternative formula tables for percentage method withholding. See Publication 15-A.

  • Wage bracket percentage method withholding tables. See Publication 15-A.

  • Other alternative methods. See Publication 15-A.

Employers with automated payroll systems will find the two alternative formula tables and the two alternative wage bracket percentage method tables in Publication 15-A useful.

If an employee wants additional federal tax withheld, have the employee show the extra amount on Form W-4.

Supplemental wages.   Supplemental wages are compensation paid to an employee in addition to the employee's regular wages. They include, but are not limited to, bonuses, commissions, overtime pay, accumulated sick leave, severance pay, awards, prizes, back pay and retroactive pay increases for current employees, and payments for nondeductible moving expenses. Other payments subject to the supplemental wage rules include taxable fringe benefits and expense allowances paid under a nonaccountable plan.

  If you pay supplemental wages with regular wages but do not specify the amount of each, withhold federal income tax as if the total was a single payment for a regular payroll period.

  If you pay supplemental wages separately (or combine them in a single payment and specify the amount of each), the federal income tax withholding method depends partly on whether you withhold federal income tax from your employee's regular wages.

  1. If you withheld federal income tax from an employee's regular wages in the current or immediately preceding calendar year, you can use one of the following methods for the supplemental wages.

    1. Withhold a flat 25% (no other percentage allowed).

    2. If the supplemental wages are paid concurrently with regular wages, add the supplemental wages to the concurrently paid regular wages. If there are no concurrently paid regular wages, add the supplemental wages to alternatively, either the regular wages paid or to be paid for the current payroll period or the regular wages paid for the preceding payroll period. Figure the income tax withholding as if the total of the regular wages and supplemental wages is a single payment. Subtract the tax withheld from the regular wages. Withhold the remaining tax from the supplemental wages. If there were other payments of supplemental wages paid during the payroll period made before the current payment of supplemental wages, aggregate all the payments of supplemental wages paid during the payroll period with the regular wages paid during the payroll period, calculate the tax on the total, subtract the tax already withheld from the regular wages and previous supplemental wage payments, and withhold the remaining tax from the current payment of supplement wages.

  2. If you did not withhold federal income tax from the employee's regular wages in the current or immediately preceding calendar year, use method 1-b above. This would occur, for example, when the value of the employee's withholding allowances claimed on Form W-4 is more than the wages.

  
Separate rules apply to any supplemental wages exceeding $1,000,000 that you pay to an individual during the year. See section 7 in
Publication 15 (Circular E) for details.

  Regardless of the method that you use to withhold federal income tax on supplemental wages, they are generally subject to social security, Medicare, and FUTA taxes.

6. Advance Earned Income Credit (EIC) Payment

An employee who expects to be eligible for the earned income credit (EIC) and who expects to have a qualifying child is entitled to receive EIC payments with his or her pay during the year. To get these payments, the employee must give you a properly completed Form W-5 (or Formulario W-5(SP), its Spanish translation) using either the paper form or the approved electronic format. You are required to make advance EIC payments to employees who give you a properly completed Form W-5; except that you are not required to make these payments to farmworkers paid on a daily basis.

Certain employees who do not have a qualifying child may be able to claim the EIC on their tax return. However, they cannot get advance EIC payments.

For 2010, the advance payment can be as much as $1,830. The tables that begin on page 48 reflect that limit.

Form W-5.   Form W-5 explains the eligibility requirements for receiving advance EIC payments. On Form W-5, an employee states that he or she expects to be eligible to claim the EIC and shows whether he or she has another Form W-5 in effect with any other current employer.

  You must include advance EIC payments with the wages that you pay to eligible employees who give you a signed and completed Form W-5. Form W-5 is effective for the first payroll period ending (or the first wage payment made without regard to a payroll period) on or after the date the employee gives you the form. It remains in effect until the end of the year or until the employee revokes it or gives you a new one. Employees must give you a new Form W-5 each year.

  An employee may have only one Form W-5 in effect with a current employer at one time. If an employee is married and his or her spouse also works, each spouse should file a separate Form W-5.

  For more information, see Form W-5 or Publication 15 (Circular E).

How to figure the advance EIC payment.   Figure the amount of advance EIC to include in the employee's pay by using either the wage bracket or percentage method tables that begin on page 48. There are separate tables for employees whose spouses have a Form W-5 in effect.

  
During 2010, if you pay an employee total wages of at least $35,535 ($40,545 if married filing jointly) you must stop making advance EIC payments to that employee for the rest of the year.

Paying the advance EIC to employees.   Advance EIC payments are not subject to withholding of income, social security, or Medicare taxes. An advance EIC payment does not change the amount of income, social security, or Medicare taxes that you withhold from the employee's wages. You add the advance EIC payment to the employee's net pay for the pay period. At the end of the year, you show the total advance EIC payments in box 9 on Form W-2. Do not include this amount as wages in box 1.

Employer's returns.   Show the total payments that you made to employees on the advance EIC line (line 10) of your Form 943. Subtract this amount from your total taxes on line 9. See the Instructions for Form 943. Reduce the amounts reported on line 17 of Form 943 or on Form 943-A, Agricultural Employer's Record of Federal Tax Liability, by any advance EIC paid to your employees.

  Generally, you will make the advance EIC payment from withheld federal income tax and employee and employer social security and Medicare taxes. Advance EIC payments are treated as deposits of these taxes on the day that you pay wages (including the advance EIC payment) to your employees. The payments are treated as deposits of these taxes in the following order: first to the amount of federal income tax withholding, then to withheld employee social security and Medicare taxes, and last, to the employer's share of social security and Medicare taxes. For more information, see Publication 15 (Circular E).

Required Notice to Employees

You must notify employees who have no federal income tax withheld that they may be able to claim a tax refund because of the EIC. Although you do not have to notify employees who claim exemption from withholding on Form W-4 about the EIC, you are encouraged to notify any employees whose wages for 2009 were less than $43,279 ($48,279 if married filing jointly) that they may be eligible to claim the credit for 2009. This is because eligible employees may get a refund of the amount of EIC that is more than the tax that they owe.

You will meet the notification requirement if you issue to the employee Form W-2 with the EIC notice on the back of Copy B, or a substitute Form W-2 with the same statement. You may also meet the requirement by providing Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC), or your own statement that contains the same wording.

If a substitute Form W-2 is given to the employee on time but does not have the required statement, you must notify the employee within 1 week of the date that the substitute Form W-2 is given. If Form W-2 is required but is not given on time, you must give the employee Notice 797 or your written statement by the date that Form W-2 is required to be given. If Form W-2 is not required, you must notify the employee by February 8, 2010.

7. Depositing Taxes

Generally, you must deposit both the employer and employee shares of social security and Medicare taxes and federal income tax withheld (minus any advance earned income credit payments). You must deposit by using the Electronic Federal Tax Payment System (EFTPS) or by mailing or delivering a check, money order, or cash with Form 8109, Federal Tax Deposit Coupon, to an authorized financial institution that is an authorized depositary for federal taxes. However, some employers must only deposit using EFTPS. See How To Deposit on page 16.

The credit against employment taxes for COBRA premium assistance payments you take on the 2009 Form 943 is treated as a deposit of taxes on the first day of your return period. See COBRA premium assistance credit on page 5 for more information.

Payment with return.   You may make payments with Forms 943 or 945 instead of depositing if one of the following applies.

  • You report less than a $2,500 tax liability for the year (line 11 of Form 943 or line 3 of Form 945) and you pay in full with a return that is filed on time. However, if you are unsure that you will report less than $2,500, deposit under the rules explained in this section so that you will not be subject to failure-to-deposit penalties.

  • You are a monthly schedule depositor and make a payment in accordance with the Accuracy of Deposits Rule discussed later. This payment may be $2,500 or more.

Only monthly schedule depositors, defined later, are allowed to make an Accuracy of Deposits Rule payment with the return. Semiweekly schedule depositors must timely deposit the amount. See Accuracy of Deposits Rule and How To Deposit, later in this section.

When To Deposit

If you employ both farm and nonfarm workers, do not combine the taxes reportable on Forms 941 or 944 with Form 943 to decide whether to make a deposit. See Employers of Both Farm and Nonfarm Workers on page 19.

The rules for determining when to deposit Form 943 taxes are discussed below. See section 10 for the separate rules that apply to FUTA tax. Under these rules, you are classified as either a monthly schedule depositor or a semiweekly schedule depositor.

The terms “monthly schedule depositor” and “semiweekly schedule depositor” do not refer to how often your business pays its employees or how often you are required to make deposits. The terms identify which set of rules you must follow when you incur a tax liability.

The deposit schedule that you must use for a calendar year is determined from the total taxes (not reduced by any advance EIC payments) reported on your Form 943 (line 9) for the lookback period, discussed next.

  • If you reported $50,000 or less of Form 943 taxes for the lookback period, you are a monthly schedule depositor.

  • If you reported more than $50,000 of Form 943 taxes for the lookback period, you are a semiweekly schedule depositor.

Lookback period.   The lookback period is the second calendar year preceding the current calendar year. For example, the lookback period for 2010 is 2008.

Example of deposit schedule based on lookback period.

Rose Co. reported taxes on Form 943 as follows.

2008 — $48,000

2009 — $60,000

Rose Co. is a monthly schedule depositor for 2010 because its taxes for the lookback period ($48,000 for calendar year 2008) were not more than $50,000. However, for 2011, Rose Co. is a semiweekly schedule depositor because the total taxes for its lookback period ($60,000 for calendar year 2009) exceeded $50,000.

Adjustments to lookback period taxes.   To determine your taxes for the lookback period, use only the tax that you reported on the original return (Form 943, line 9). Do not include adjustments shown on Form 943-X, Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund.

Example of adjustments.

An employer originally reported total tax of $45,000 for the lookback period in 2008. The employer discovered during March 2010 that the tax during the lookback period was understated by $10,000 and corrected this error by filing Form 943-X. The total tax reported in the lookback period is still $45,000. The $10,000 adjustment is also not treated as part of the 2010 taxes.

Deposit period.   The term “deposit period” refers to the period during which tax liabilities are accumulated for each required deposit due date. For monthly schedule depositors, the deposit period is a calendar month. The deposit periods for semiweekly schedule depositors are Wednesday through Friday and Saturday through Tuesday.

Monthly Deposit Schedule

If the total tax reported on line 9 of Form 943 for the lookback period is $50,000 or less, you are a monthly schedule depositor for the current year. You must deposit Form 943 taxes on payments made during a calendar month by the 15th day of the following month.

Monthly schedule example.   Red Co. is a seasonal employer and a monthly schedule depositor. It pays wages each Friday. It paid wages during August 2010, but did not pay any wages during September. Red Co. must deposit the combined tax liabilities for the August paydays by September 15. Red Co. does not have a deposit requirement for September (that is, due by October 15) because no wages were paid in September; therefore, it did not have a tax liability for September.

New employers.   For agricultural employers, your tax liability for any year in the lookback period before the date you started or acquired your business is considered to be zero. Therefore, you are a monthly schedule depositor for the first and second calendar years of your agricultural business (but see the $100,000 Next-Day Deposit Rule , later).

Semiweekly Deposit Schedule

You are a semiweekly schedule depositor for a calendar year if the total taxes on line 9 of Form 943 during your lookback period were more than $50,000. Under the semiweekly deposit schedule, deposit Form 943 taxes for payments made on Wednesday, Thursday, and/or Friday by the following Wednesday. Deposit amounts accumulated for payments made on Saturday, Sunday, Monday, and/or Tuesday by the following Friday.

Semiweekly depositors are not required to deposit twice a week if their payments were in the same semiweekly period unless the $100,000 Next-Day Deposit Rule (discussed later) applies. For example, if you made a payment on both Wednesday and Friday and incurred taxes of $10,000 for each pay date, deposit the $20,000 by the following Wednesday. If you made no additional payments on Saturday through Tuesday, no deposit is due on Friday.

Semiweekly schedule depositors must complete Form 943-A and submit it with Form 943.

Semiweekly Deposit Schedule

IF the payday falls on a... THEN deposit taxes by
the following...
Wednesday, Thursday, and/or Friday Wednesday
Saturday, Sunday, Monday, and/or Tuesday Friday

Semiweekly schedule example.   Green, Inc., a semiweekly schedule depositor, pays wages on the last day of each month. Green, Inc., will deposit only once a month, but the deposit will be made under the semiweekly deposit schedule as follows. Green, Inc.'s tax liability for the
April 30, 2010 (Friday), wage payment must be deposited by May 5, 2010 (Wednesday).

Semiweekly deposit period spanning two quarters.   If you have more than one pay date during a semiweekly period and the pay dates fall in different calendar quarters, you will need to make separate deposits for the separate liabilities. For example, if you have a pay date on Wednesday, September 29, 2010 (third quarter), and another pay date on Friday, October 1, 2010 (fourth quarter), two separate deposits will be required even though the pay dates fall within the same semiweekly period. Both deposits will be due Wednesday, October 6, 2010 (three banking days from the end of the semiweekly deposit period).

Deposits on Banking Days Only

If a deposit is required to be made on a day that is not a banking day, the deposit is considered on time if it is made by the next banking day. In addition to federal and state bank holidays, Saturdays and Sundays are treated as nonbanking days. For example, if a deposit is required to be made on Friday, but Friday is not a banking day, the deposit is considered timely if it is made by the following Monday (if Monday is a banking day).

Semiweekly schedule depositors   will always have 3 banking days to make a deposit. That is, if any of the 3 weekdays after the end of a semiweekly period is a banking holiday, you will have 1 additional banking day to deposit. For example, if a semiweekly schedule depositor accumulated taxes on Friday and the following Monday is not a banking day, the deposit normally due on Wednesday may be made on Thursday (allowing 3 banking days to make the deposit).

$100,000 Next-Day Deposit Rule

If you accumulate $100,000 or more of Form 943 taxes (that is, taxes reported on line 11) on any day during a deposit period, you must deposit the tax by the close of the next banking day, whether you are a monthly or a semiweekly schedule depositor.

For purposes of the $100,000 rule, do not continue accumulating a tax liability after the end of a deposit period. For example, if a semiweekly schedule depositor has accumulated a liability of $95,000 on a Tuesday (of a Saturday-through-Tuesday deposit period) and accumulated a $10,000 liability on Wednesday, the $100,000 next-day deposit rule does not apply because the $10,000 is accumulated in the next deposit period. Thus, $95,000 must be deposited on Friday and $10,000 must be deposited on the following Wednesday.

In addition, once you accumulate at least $100,000 in a deposit period, stop accumulating at the end of that day and begin to accumulate anew on the next day. For example, Fir Co. is a semiweekly schedule depositor. On Monday, Fir Co. accumulates taxes of $110,000 and must deposit this amount on Tuesday, the next banking day. On Tuesday, Fir Co. accumulates additional taxes of $30,000. Because the $30,000 is not added to the previous $110,000 and is less than $100,000, Fir Co. does not have to deposit the $30,000 until Friday (following the semiweekly deposit schedule).

If you are a monthly schedule depositor and you accumulate a $100,000 tax liability on any day, you become a semiweekly schedule depositor on the next day and remain so for the remainder of the calendar year and for the following calendar year.

Example of the $100,000 next-day deposit rule.   Elm, Inc., started business on April 2, 2010. Because Elm, Inc., is a new employer, the taxes for its lookback period are considered to be zero; therefore, Elm, Inc., is a monthly schedule depositor. On April 9, Elm, Inc., paid wages for the first time and accumulated taxes of $50,000. On
April 16 (Friday), Elm, Inc., paid wages and accumulated taxes of $60,000, for a total of $110,000. Because Elm, Inc., accumulated $110,000 on April 16, it must deposit $110,000 by April 19 (Monday), the next banking day.

Accuracy of Deposits Rule

You are required to deposit 100% of your tax liability on or before the deposit due date. However, penalties will not be applied for depositing less than 100% if both of the following conditions are met.

  1. Any deposit shortfall does not exceed the greater of $100 or 2% of the amount of taxes otherwise required to be deposited.

  2. The deposit shortfall is paid or deposited by the shortfall makeup date as described below.

Makeup Date for Deposit Shortfall:   

  • Monthly Schedule Depositor—Deposit the shortfall or pay it with your return by the due date of your Form 943. You may pay the shortfall with your Form 943 even if the amount is $2,500 or more.

  • Semiweekly Schedule Depositor—Deposit by the earlier of (a) the first Wednesday or Friday (whichever comes first) that falls on or after the 15th of the month following the month in which the shortfall occurred, or (b) the due date for Form 943. For example, if a semiweekly schedule depositor has a deposit shortfall during February 2010, the shortfall makeup date is March 17, 2010 (Wednesday).

How To Deposit

The two methods of depositing employment taxes are discussed below. See Payment with return on page 14 for exceptions explaining when taxes may be paid with the tax return instead of being deposited.

Electronic deposit requirement (EFTPS).   You must make electronic deposits of all depository taxes (such as employment tax, excise tax, and corporate income tax) using the Electronic Federal Tax Payment System (EFTPS) in 2010 if:

  • Your total deposits of such taxes in 2008 were more than $200,000, or

  • You were required to use EFTPS in 2009.

  If you are required to use EFTPS and use Form 8109 instead, you may be subject to a 10% failure-to-deposit penalty. EFTPS is a free service provided by the Department of Treasury. If you are not required to use EFTPS, you may participate voluntarily. To get more information or to enroll in EFTPS, call 1-800-555-4477 (business) or 1-800-316-6541 (individual). You can also visit the EFTPS website at www.eftps.gov.

New employers that have a federal tax obligation will be pre-enrolled in EFTPS. Call the toll-free number located in your Employer Identification Number (EIN) Package to activate your enrollment and begin making your tax deposit payments. See When you receive your EIN on page 6 for more information.

Depositing on time.   For deposits made by EFTPS to be on time, you must initiate the transaction at least one business day before the date that the deposit is due.

Deposit record.   For your records, an Electronic Funds Transfer (EFT) Trace Number will be provided with each successful payment. The number can be used as a receipt or to trace the payment.

Same day payment option.   If you fail to initiate a deposit transaction on EFTPS at least 1 business day before the date a deposit is due, you can still make your deposit on time by using the Federal Reserve-Electronic Tax Application (FR-ETA). If you ever need the same-day payment method, you will need to make arrangements with your financial institution ahead of time. FR-ETA allows you to initiate the transaction and have the funds transferred from your financial institution on the same day. Enrollment in EFTPS automatically enrolls you in FR-ETA. Instructions for using FR-ETA are included in your EFTPS enrollment package. Business taxpayers can use FR-ETA even if not enrolled, but may need help to have their financial institution use the proper format for making the payment. The guidelines for financial institutions for making payments using FR-ETA can be found at www.frbservices.org/files/serviceofferings/pdf/Sameday.pdf.

Making deposits with FTD coupons.   If you are not making deposits by EFTPS, use Form 8109 to make the deposits at an authorized financial institution.

  For new employers, if you would like to receive a Federal Tax Deposit (FTD) coupon booklet, call 1-800-829-4933. Allow 5 to 6 weeks for delivery. Consider activating your enrollment in EFTPS now so that you can make timely deposits of employment taxes while waiting for requested FTD coupons.

  The IRS will keep track of the number of FTD coupons that you use and will automatically send you additional coupons when you need them. If you do not receive your resupply of FTD coupons, call 1-800-829-4933. You can have the FTD coupon books sent to a branch office, tax preparer, or service bureau that is making your deposits by showing that address on Form 8109-C, FTD Address Change, which is in the FTD coupon book. Filing Form 8109-C will not change your address of record; it will change only the address where the FTD coupons are mailed. The FTD coupons will be preprinted with your name, address, and EIN. They have entry spaces for indicating the type of tax and the tax period for which the deposit is made.

  It is very important to clearly mark the correct type of tax and tax period on each FTD coupon. This information is used by the IRS to credit your account.

  If you have branch offices depositing taxes, give them FTD coupons and complete instructions so that they can deposit the taxes when due.

  Please use only your FTD coupons. If you use anyone else's FTD coupon, you may be subject to a failure-to-deposit penalty. This is because your account will be underpaid by the amount of the deposit credited to the other person's account. See Deposit Penalties , later, for penalty amounts.

How to deposit with a FTD coupon.   Mail or deliver each FTD coupon and a single payment covering the taxes to be deposited to an authorized depositary. An authorized depositary is a financial institution (for example, a commercial bank) that is authorized to accept federal tax deposits. Follow the instructions in the FTD coupon book. Make your check or money order payable to the depositary. To help ensure proper crediting of your account, include your EIN, the type of tax (for example, Form 943), and the tax period to which the payment applies on your check or money order.

  Authorized depositaries must accept cash, a postal money order drawn to the order of the depositary, or a check or draft drawn on and to the order of the depositary. You may deposit taxes with a check drawn on another financial institution only if the depositary is willing to accept that form of payment. Be sure that the financial institution where you make deposits is an authorized depositary. Deposits made at an unauthorized institution may be subject to the failure-to-deposit penalty.

  If you prefer, you may mail your coupon and payment to:

Financial Agent
Federal Tax Deposit Processing
P.O. Box 970030
St. Louis, MO 63197.

Make your check or money order payable to “Financial Agent.”

  The Financial Agent cannot process foreign checks. If you send a check written on a foreign bank to pay a federal tax deposit, you generally will be charged a deposit penalty and will receive a bill in the mail. A foreign bank is a financial institution that is not incorporated under the laws of the United States, any U.S. state, any U.S. possession, or the District of Columbia.

  You may enroll in the Electronic Federal Tax Payment System (EFTPS), which will allow you to make electronic payments at no charge to you. Instructions for enrollment are available at www.eftps.gov.

  You may also make the payments by wire transfer, through EFTPS, without being enrolled. A same day payment is initiated by your financial institution and can be used by businesses for making EFTPS tax payments. Please check with your financial institution regarding availability, deadlines, and costs. Generally, your bank will charge you a fee for payments made this way.

Depositing on time.   The IRS determines if deposits are on time by the date that they are received by an authorized depositary. To be considered timely, the funds must be available to the depositary on the deposit due date before the institution's daily cutoff deadline. Contact your local depositary for information concerning check clearance and cutoff schedules. However, a deposit received by the authorized depositary after the due date will be considered timely if the taxpayer establishes that it was mailed in the United States in a properly addressed, postage prepaid envelope at least 2 days before the due date.

  
If you are required to deposit any taxes more than once a month, any deposit of $20,000 or more must be received by the authorized depositary by its due date to be timely. See section 7502(e)(3) for more information.

Depositing without an EIN.   If you have applied for an EIN but have not received it and you must make a deposit, make the deposit with the IRS. Do not make the deposit at an authorized depositary. Make your check or money order payable to the “United States Treasury” and show on it your name (as shown on Form SS-4), address, kind of tax, period covered, and date you applied for an EIN. Send your deposit with an explanation to your local IRS office or the office where you file Form 943 or Form 945. The addresses are provided in the separate instructions for Forms 943 and 945 and are also available on the IRS website at www.irs.gov. Do not use Form 8109-B, Federal Tax Deposit Coupon, in this situation.

Depositing without Form 8109.   If you do not have a preprinted Form 8109, you may use Form 8109-B to make deposits. Form 8109-B is an over-the-counter FTD coupon that is not preprinted with your identifying information. You may get this form by calling 1-800-829-4933. Be sure to have your EIN ready when you call. You will not be able to obtain Form 8109-B by calling 1-800-TAX-FORM.

  Use Form 8109-B to make deposits only if:

  • You are a new employer and you have been assigned an EIN, but you have not received your initial supply of Forms 8109; or

  • You have not received your resupply of preprinted Forms 8109.

Deposit record.   For your records, a stub is provided with each FTD coupon in the coupon book. The FTD coupon itself will not be returned. It is used to credit your account. Your cancelled check, bank receipt, or money order receipt is your deposit record.

Deposit Penalties

Penalties may apply if you do not make required deposits on time, if you make deposits for less than the required amount, or if you do not use EFTPS when required. The penalties do not apply if any failure to make a proper and timely deposit was due to reasonable cause and not to willful neglect. IRS may also waive deposit penalties if you inadvertently fail to deposit in the first quarter that a deposit is due, or the first quarter during which your frequency of deposits changed, if you timely filed your employment tax return.

For amounts not properly deposited or not deposited on time, the penalty rates are shown next.

Penalty Charged for...
2% Deposits made 1 to 5 days late.
5% Deposits made 6 to 15 days late.
10% Deposits made 16 or more days late. Also applies to amounts paid within 10 days of the date of the first notice the IRS sent asking for the tax due.
10% Deposits made at an unauthorized financial institution, paid directly to the IRS, or paid with your tax return. But see Depositing without an EIN , earlier, and Payment with return on page 14 for exceptions.
10% Amounts subject to electronic deposit requirements but not deposited using EFTPS.
15% Amounts still unpaid more than 10 days after the date of the first notice that the IRS sent asking for the tax due or the day on which you received notice and demand for immediate payment, whichever is earlier.

Late deposit penalty amounts are determined using calendar days, starting from the due date of the liability.

Order in which deposits are applied.   Deposits generally are applied to the most recent tax liability within the year. If you receive a failure-to-deposit penalty notice, you may designate how your deposits are to be applied in order to minimize the amount of the penalty, if you do so within 90 days of the date of the notice. Follow the instructions on the penalty notice that you received. For examples on how the IRS will apply deposits and more information on designating deposits, see Revenue Procedure 2001-58. You can find Revenue Procedure 2001-58 on page 579 of Internal Revenue Bulletin 2001-50 at
www.irs.gov/pub/irs-irbs/irb01-50.pdf.

Example.

Cedar, Inc., is required to make a deposit of $1,000 on June 15 and $1,500 on July 15. It does not make the deposit on June 15. On July 15, Cedar, Inc., deposits $2,000. Under the deposits rule, which applies deposits to the most recent tax liability, $1,500 of the deposit is applied to the July 15 deposit and the remaining $500 is applied to the June deposit. Accordingly, $500 of the June 15 liability remains undeposited. The penalty on this underdeposit will apply as explained above.

Trust fund recovery penalty.   If federal income, social security, and Medicare taxes that must be withheld are not withheld or are not deposited or paid to the United States Treasury, the trust fund recovery penalty may apply. The penalty is the full amount of the unpaid trust fund tax. This penalty may apply to you if these unpaid taxes cannot be immediately collected from the employer or business.

  The trust fund recovery penalty may be imposed on all persons who are determined by the IRS to be responsible for collecting, accounting for, and paying over these taxes, and who acted willfully in not doing so.

  A responsible person can be an officer or employee of a corporation, a partner or employee of a partnership, an accountant, a volunteer director/trustee, or an employee of a sole proprietorship. A responsible person also may include one who signs checks for the business or otherwise has authority to cause the spending of business funds.

   Willfully means voluntarily, consciously, and intentionally. A responsible person acts willfully if the person knows that the required actions are not taking place.

“Averaged” failure-to-deposit penalty.   IRS may assess an “averaged” failure-to-deposit penalty of 2% to 10% if you are a monthly schedule depositor and did not properly complete line 17 of Form 943 when your tax liability (line 11) shown on Form 943 was $2,500 or more. IRS may also assess this penalty of 2% to 10% if you are a semiweekly schedule depositor and your tax liability (line 11) shown on Form 943 was $2,500 or more and you did any of the following.

  • Completed line 17 of Form 943 instead of Form 943-A.

  • Failed to attach a properly completed Form 943-A.

  • Completed Form 943-A incorrectly, for example, by entering tax deposits instead of tax liabilities in the numbered spaces.

  IRS figures the penalty by allocating your total tax liability on line 11 of Form 943 equally throughout the tax period. Your deposits and payments may not be counted as timely because IRS does not know the actual dates of your tax liabilities.

  You can avoid the penalty by reviewing your return before filing it. Follow these steps before filing your
Form 943.

  • If you are a monthly schedule depositor, report your tax liabilities (not your deposits) in the monthly entry spaces on line 17 of Form 943.

  • If you are a semiweekly schedule depositor, report your tax liabilities (not your deposits) on Form 943-A in the lines that represent the dates you paid your employees.

  • Verify that your total liability shown on line 17 of Form 943 or on line M of Form 943-A equals your tax liability shown on line 11 of Form 943.

  • Do not show negative amounts on line 17 of Form 943 or Form 943-A. If a prior period adjustment results in a decrease in your tax liability, reduce your liability for the day you discovered the error by the tax decrease resulting from the error, but not below zero. Apply any remaining decrease to subsequent liabilities.

  • For prior period errors discovered after December 31, 2008, do not adjust your tax liabilities reported on line 17 of Form 943 or on Form 943-A.

Employers of Both Farm and Nonfarm Workers

If you employ both farm and nonfarm workers, you must treat employment taxes for the farmworkers (Form 943 taxes) separately from employment taxes for the nonfarm workers (Form 941 and 944 taxes). Form 943 taxes and Form 941/944 taxes are not combined for purposes of applying any of the deposit schedule rules.

If a deposit is due, deposit the Form 941/944 taxes and the Form 943 taxes with separate FTD coupons, or by making separate EFTPS deposits. For example, if you are a monthly schedule depositor for both Forms 941/944 and 943 taxes and your tax liability at the end of June is $1,500 reportable on Form 941/944 and $1,200 reportable on Form 943, deposit both amounts by July 15. Use one FTD coupon to deposit the $1,500 of Form 941/944 taxes and another FTD coupon to deposit the $1,200 of Form 943 taxes.

8. Form 943

You must file Form 943 for each calendar year beginning with the first year that you pay $2,500 or more for farmwork or you employ a farmworker who meets the $150 test explained in section 4. Do not report these wages on
Form 941 or Form 944.

After you file your first return, each year the IRS will send you a Form 943 preaddressed with your name, address, and EIN. If you do not receive the preaddressed form, request a blank form from the IRS. If you use a blank form, show your name and EIN exactly as they appeared on previous returns.

Household employees.   If you file Form 943 and pay wages to household workers, you may include the wages and taxes of these workers on Form 943. If you choose not to report these wages and taxes on Form 943, report the wages of these workers separately on Schedule H (Form 1040), Household Employment Taxes. You must have an EIN to file Schedule H (Form 1040). See section 1 for details. If you report the wages on Form 943, include the taxes when you figure deposit requirements or make deposits. If you include household employee wages and taxes on Schedule H (Form 1040), do not include the household employee taxes when you figure deposit requirements or make Form 943 deposits. See Publication 926 for more information about household workers.

  If household employee wages and taxes are included on Form 943, you must also include FUTA tax for the employees on Form 940. See section 10 for more information.

Penalties.   For each month or part of a month that a return is not filed when required (disregarding any extensions of the filing deadline), there is a failure-to-file penalty of 5% of the unpaid tax due with that return. The maximum penalty is 25% of the tax due. Also, for each month or part of a month that the tax is paid late (disregarding any extensions of the payment deadline), there is a failure-to-pay penalty of 0.5% per month of the amount of tax. For individual filers only, the failure-to-pay penalty is reduced from 0.5% per month to 0.25% per month if an installment agreement is in effect. You must have filed your return on or before the due date of the return to qualify for the reduced penalty. The maximum amount of the failure-to-pay penalty is also 25% of the tax due. If both penalties apply in any month, the failure-to-file penalty is reduced by the amount of the failure-to-pay penalty. The penalties will not be charged if you have reasonable cause for failing to file or pay. If you receive a penalty notice, you can provide an explanation of why you believe reasonable cause exists.

   Note. In addition to any penalties, interest accrues from the due date of the tax on any unpaid balance.

  If federal income, social security, or Medicare taxes that must be withheld are not withheld or are not paid, you may be personally liable for the trust fund recovery penalty. See Trust fund recovery penalty in section 7.

  Use of a reporting agent or other third-party payroll service provider does not relieve an employer of the responsibility to ensure that tax returns are filed and all taxes are paid or deposited correctly and on time.

9. Reporting Adjustments on Form 943

There are two types of adjustments: current year adjustments and prior year adjustments to correct errors. See the Instructions for Form 943 and the Instructions for Form 943-X for more information on how to report these adjustments.

Current Year Adjustments

In certain cases, amounts reported as social security and Medicare taxes on lines 3 and 5 of Form 943 must be adjusted to arrive at your correct tax liability. The most common situation involves differences in cents totals due to rounding. Other situations when current year adjustments may be necessary include third-party sick pay, group-term life insurance for former employees, and the uncollected employee share of social security and Medicare taxes on tips. See Publication 15 (Circular E) for more information on these adjustments.

If you withhold an incorrect amount of federal income tax from an employee, you may adjust the amount withheld in later pay periods during the same year to compensate for the error.

Prior Year Adjustments

If you discover an error on a previously filed Form 943 after December 31, 2008, make the correction using Form 943-X. (Do not use Form 941c.) For errors discovered prior to January 1, 2009, see Prior Year Adjustments (Errors Discovered Before January 1, 2009) in the 2009 Publication 51 (Circular A). File a separate Form 943-X for each prior year you are correcting. File Form 943-X separately. Do not attach Form 943-X to your current period Form 943. You must explain your error on Form 943-X, indicate when the error was discovered, and provide the applicable certifications.

When you discover that you underreported tax on a previously filed return, you must file Form 943-X no later than the due date of the return for the period during which you discovered the error. Pay the amount you owe when you file. For example, you discover on June 15, 2010, that you underreported $10,000 of social security and Medicare wages on your 2009 Form 943. You owe $1,530 on the 2009 Form 943. To qualify for an interest-free adjustment, you must file Form 943-X by January 31, 2011, and pay $1,530 when you file. For more information, see the Instructions for Form 943-X or visit the IRS website at www.irs.gov and enter keywords Correcting Employment Taxes.

Form 843.   Do not use Form 843, Claim for Refund and Request for Abatement, to request a refund or abatement of overreported social security or Medicare taxes. Instead, request your refund or abatement of taxes on Form 943-X. However, use Form 843 when requesting a refund or abatement of assessed interest or penalties.

Federal income tax withholding adjustments.   You cannot adjust the amount reported as federal income tax withheld for a prior year return, even if you withheld the wrong amount. However, you may adjust prior year federal income tax withholding to correct an administrative error. An administrative error occurs if the amount you entered on Form 943 is not the amount that you actually withheld. Examples include mathematical or transposition errors. In these cases, you should adjust the return to show the amount actually withheld.

  The administrative error adjustment corrects only the amount reported on Form 943 to agree with the actual amount withheld from wages in that year.

  You may also need to correct Forms W-2 for the prior year (if they do not show the actual withholding) by filing Form W-2c and Form W-3c. Forms W-2c may be created and submitted to SSA over the Internet. For more information, visit SSA's Employer W-2 Filing Instructions & Information webpage at www.socialsecurity.gov/employer.

Social security and Medicare tax adjustments.   Correct prior year social security and Medicare tax errors by making an adjustment on Form 943-X.

  If you withheld no tax or less than the correct amount, you may correct the mistake by withholding the tax from a later payment to the same employee.

  If you withheld employee tax when no tax is due or if you withheld more than the correct amount, you must repay or reimburse the employee.

Collecting underwithheld taxes from employees.   If you withheld no federal income, social security, or Medicare taxes or less than the correct amount from an employee's wages, you can make it up from future pay to that employee. But you are the one who owes the underpayment. Reimbursement is a matter for settlement between you and the employee. Underwithheld federal income tax must be recovered from the employee on or before the last day of the calendar year.

Refunding amounts incorrectly withheld from employees.   If you withheld more than the correct amount of federal income, social security, or Medicare taxes from wages paid, give the employee any excess. The excess federal income tax withholding must be reimbursed to the employee before the end of the calendar year. Keep in your records the employee's written receipt showing the date and amount of the repayment. If you do not have a receipt, you must report and pay each excess amount when you file Form 943 for the year in which you withheld too much tax.

Filing corrections to Forms W-2 and W-3.   When adjustments are made to correct social security and Medicare taxes because of a change in the wage totals reported for a previous year, you also may need to file Forms W-2c and Form W-3c. Forms W-2c may be created and submitted to SSA over the Internet. For more information, visit SSA's Employer W-2 Filing Instructions & Information webpage at www.socialsecurity.gov/employer.

For additional information about the new procedure for adjusting employment taxes, get the Instructions for Form 943-X or visit the IRS website at www.irs.gov and enter keywords Correcting Employment Taxes. Also see Treasury Decision 9405, 2008-32 I.R.B. 293, available at
http://www.irs.gov/irb/2008-32_IRB/ar13.html.

Note. Continue to make current period adjustments for fractions of cents, sick pay, tips, and group-term life insurance on your Form 943.

10. Federal Unemployment (FUTA) Tax

The Federal Unemployment Tax Act (FUTA), with state unemployment systems, provides for payments of unemployment compensation to workers who have lost their jobs. Most employers pay both a federal and a state unemployment tax. A list of state unemployment agencies, including web addresses and phone numbers, is available in the Instructions for Form 940. Only the employer pays FUTA tax; it is not withheld from the employees' wages. For more information, see the Instructions for Form 940.

For 2010, you must file Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, if you:

  • Paid cash wages of $20,000 or more to farmworkers in any calendar quarter in 2009 or 2010, or

  • Employed 10 or more farmworkers during at least some part of a day (whether or not at the same time) during any 20 or more different weeks in 2009 or 20 or more different weeks in 2010.

To determine whether you meet either test above, you must count wages paid to aliens admitted on a temporary basis to the United States to perform farmwork, also known as “H-2(A)” visa workers. However, wages paid to “H-2(A)” visa workers are not subject to the FUTA tax.

Generally, farmworkers supplied by a crew leader are considered employees of the farm operator for purposes of the FUTA tax unless (a) the crew leader is registered under the Migrant and Seasonal Agricultural Worker Protection Act, or (b) substantially all of the workers supplied by the crew leader operate or maintain tractors, harvesting or crop-dusting machines, or other machines provided by the crew leader. Therefore, if (a) or (b) applies, the farmworkers are generally employees of the crew leader.

You must deposit FUTA tax with an authorized financial institution. If you are subject to the electronic deposit requirements, you must use EFTPS. See section 7 for more information on deposits. The deposit rules for FUTA tax are different from those for income, social security, and Medicare taxes. See Deposit rules for FUTA tax , later.

FUTA tax rate.   For 2009 and 2010, the FUTA tax rate is 6.2% on the first $7,000 of cash wages you pay to each employee. You may receive a credit of up to 5.4% of FUTA wages for the state unemployment tax that you pay. If your state tax rate (experience rate) is less than 5.4%, you are still allowed the full 5.4% credit. Therefore, your net FUTA tax rate may be as low as 0.8% (.008). FUTA tax applies, however, even if you are exempt from state unemployment tax or your employees are ineligible for unemployment compensation benefits. Form 940 takes state credits into account.

Successor employer.   If you have acquired a business from someone else, you may be able to claim a special credit as a successor employer. See the Instructions for Form 940.

Deposit rules for FUTA tax.   Generally, deposit FUTA tax quarterly. To figure your FUTA tax, multiply .008 times the amount of wages paid to each employee during the quarter. This amount may need to be adjusted, however, depending on your entitlement to the credit for state unemployment contributions. See the Instructions for Form 940. When an employee's wages reach $7,000, do not figure any additional FUTA tax for that employee. If the FUTA tax for the quarter (plus any undeposited FUTA tax from prior quarters) is more than $500, deposit the FUTA tax with an authorized financial institution, or by using EFTPS as explained in section 7, by the last day of the month following the end of the quarter. If the amount is $500 or less, you do not have to deposit it, but you must add it to the amount of tax for the next quarter to determine whether a deposit is required for that quarter. To help ensure proper crediting to your account, write your EIN, “Form 940,” and the tax period the deposit applies to on your check or money order.

  If your liability for the fourth quarter (plus any undeposited amount from any earlier quarter) is over $500, deposit the entire amount by the due date of Form 940 (January 31). If it is $500 or less, you can make a deposit, pay the tax with a major credit card, debit card, or pay the tax with a check or money order with your Form 940 by January 31. Federal tax deposits cannot be paid by credit or debit cards.

Filing Form 940.   By January 31, file Form 940. If you make deposits on time in full payment of the tax due for the year, you have 10 additional days to file.

  Once you have filed a Form 940, you will receive a preaddressed form near the end of each calendar year. If you do not receive a form, request one by calling 1-800-829-4933 in time to receive it and file when due. Alternatively, you may download a copy of Form 940 and Instructions for Form 940 from the IRS website at
www.irs.gov.

11. Records You Should Keep

Every employer subject to employment taxes must keep all related records available for inspection for at least 4 years after the due date for the return period to which the records relate, or the date the taxes are paid, whichever is later. You may keep the records in whatever form you choose.

Keep a record of the following information.

  • Your EIN.

  • Names, addresses, social security numbers, and occupations of employees.

  • Dates of employees' employment.

  • Amounts and dates of all cash wages, annuity, and pension payments.

  • Fair market value and dates of all noncash payments.

  • Periods for which employees were paid while absent due to sickness or injury, and the amount and weekly rate of payments you or third-party payers made to them.

  • Dates and amounts of tax deposits that you made and acknowledgment numbers for deposits made by EFTPS.

  • Fringe benefits provided, including substantiation.

Keep copies of the following documents.

  • Forms W-4 (Formulario W-4(SP)), W-4P, and W-4S.

  • Forms W-5 (Formulario W-5(SP)).

  • Forms W-2, including employee copies of any
    Forms W-2 that were returned to you as undeliverable.

  • Returns that you filed.

If a crew leader furnished you with farmworkers, you must keep a record of the name, permanent mailing address, and EIN of the crew leader. If the crew leader has no permanent mailing address, record his or her present address.

12. Reconciling Wage Reporting Forms

When there are discrepancies between amounts reported on Form 943 filed with the IRS and Forms W-2 and W-3 filed with the SSA, the IRS must contact you to resolve the discrepancies.

To help reduce discrepancies:

  1. Report bonuses as wages and as social security and Medicare wages on Forms W-2 and 943;

  2. Report social security and Medicare wages and taxes separately on Forms W-2, W-3, and 943;

  3. Report social security taxes on Form W-2 in the box for social security tax withheld (box 4), not as social security wages;

  4. Report Medicare taxes on Form W-2 in the box for Medicare tax withheld (box 6), not as Medicare wages;

  5. Make sure that social security wages for each employee do not exceed the annual social security wage base; and

  6. Do not report noncash wages that are not subject to social security or Medicare taxes as social security or Medicare wages.

To reduce the discrepancies between amounts reported on Forms W-2, W-3, and 943:

  1. Be sure that the amounts on Form W-3 are the total amounts from Forms W-2, excluding any amounts from Forms W-2 that were marked void, and

  2. Reconcile Form W-3 with your Form 943 by comparing amounts reported for the following items.

  • Federal income tax withholding, social security wages, and Medicare wages.

  • Social security and Medicare taxes. The amounts shown on Form 943, including current year adjustments, should be approximately twice the amounts shown on Form W-3.

  • Advance earned income credit (EIC).

Amounts reported on Forms W-2, W-3, and 943 may not match for valid reasons. If they do not match, you should determine that the reasons are valid. Keep your reconciliation so that you will have a record of why amounts did not match in case there are inquiries from the IRS or the SSA.

13. Federal Income Tax Withholding Methods

There are several methods to figure federal income tax withholding for employees. The most common are the wage bracket method and the percentage method.

Wage Bracket Method

Under the wage bracket method, find the proper table (on pages 28 through 47) for your payroll period and the employee's marital status as shown on his or her Form W-4. Then, based on the number of withholding allowances claimed on the Form W-4 and the amount of wages, find the amount of federal income tax to withhold. If your employee is claiming more than 10 withholding allowances, see below.

If you cannot use the wage bracket tables because wages exceed the amount shown in the last bracket of the table, use the percentage method of withholding described later. Be sure to reduce wages by the amount of total withholding allowances (shown in the table below) before using the percentage method tables on pages 26 and 27.

Adjusting wage bracket withholding for employees claiming over 10 withholding allowances.   To adapt the wage bracket tables for employees who are claiming over 10 allowances, follow these steps.

  1. Multiply the number of withholding allowances that is over 10 by the allowance value for the payroll period. The allowance values are in the Percentage Method—2010 Amount for One Withholding Allowance table below.

  2. Subtract the result from the employee's wages.

  3. On this amount, find and withhold the tax in the column for 10 allowances.

  This is a voluntary method. If you use the wage bracket tables, you may continue to withhold the amount in the “10” column when your employee has more than 10 allowances, using the method above. You can also use the other methods described below.

Percentage Method

If you do not want to use the wage bracket tables on pages 28 through 47 to figure how much federal income tax to withhold, you can use the percentage method based on the table on this page and the appropriate rate table. This method works for any number of withholding allowances the employee claims and any amount of wages.

Use these steps to figure the federal income tax to withhold under the percentage method.

  1. Multiply one withholding allowance (see table below) by the number of allowances the employee claims.

  2. Subtract that amount from the employee's wages.

  3. Determine the amount to withhold from the appropriate table on page 26 or 27.

Percentage Method—2010 Amount for One Withholding Allowance

Payroll Period One Withholding Allowance
Weekly $70.19
Biweekly 140.38
Semimonthly 152.08
Monthly 304.17
Quarterly 912.50
Semiannually 1,825.00
Annually 3,650.00
Daily or Miscellaneous (each day of the payroll period) 14.04

Example.

An unmarried employee is paid $600 weekly. This employee has a Form W-4 in effect claiming two withholding allowances. Using the percentage method, figure the federal income tax withholding as follows:

1. Total wage payment   $600.00
2. One allowance $70.19  
3. Allowances claimed on Form W-4
2		  
4. Multiply line 2 by line 3   $140.38
5. Amount subject to withholding (subtract line 4 from line 1)   $459.62
6. Tax to be withheld on $459.62 from Table 1—single person, page 26   $47.34

.

To figure the federal income tax to withhold, you may reduce the last digit of the wages to zero, or figure the wages to the nearest dollar.

Annual income tax withholding.   Figure the federal income tax to withhold on annual wages under the Percentage Method for an annual payroll period. Then prorate the tax back to the payroll period.

Example.

A married person claims four withholding allowances. She is paid $1,000 a week. Multiply the weekly wages by 52 weeks to figure the annual wage of $52,000. Subtract $14,600 (the value of four withholding allowances annually) for a balance of $37,400. Using column (b) of
Table 7—Annual Payroll Period on page 27, the annual federal income tax withholding is $3,010.00. Divide the annual amount by 52. The weekly federal income tax to withhold is $57.88.

Alternative Methods of Federal Income Tax Withholding

Rather than the Percentage Method or Wage Bracket Method described earlier, you can use an alternative method to withhold federal income tax. Section 9 of
Publication 15-A describes these alternative methods.

Rounding.   If you use the percentage method or alternative methods for federal income tax withholding, you may round the tax for the pay period to the nearest dollar. The wage bracket tables are already rounded for you.

  If rounding is used, it must be used consistently. Round withheld federal tax amounts to the nearest whole dollar by (a) dropping amounts under 50 cents, and (b) increasing amounts from 50 to 99 cents to the next higher dollar. For example, $2.30 becomes $2, and $2.80 becomes $3.

14. Advance Earned Income Credit (EIC) Payment Methods

To figure the advance EIC payment, you may use either the Wage Bracket Method or the Percentage Method as explained later. With either method, the number of withholding allowances that an employee claims on Form W-4 is not used in figuring the advance EIC payment. Nor does it matter that the employee has claimed exemption from income tax withholding on Form W-4. See section 6 for an explanation of the advance EIC.

Wage Bracket Method

If you use the wage bracket tables on pages 50 through 56, figure the advance EIC payment as follows.

Find the employee's gross wages before any deductions using the appropriate table. There are different tables for (a) single or head of household, (b) married without spouse filing certificate, and (c) married with both spouses filing certificates. Find the amount of the advance EIC payment shown in the appropriate table for the amount of wages paid.

Percentage Method

If you do not want to use the wage bracket tables to figure how much to include in an employee's wages for the advance EIC payment, you can use the percentage computation based on the appropriate rate table.

Find the employee's gross wages before any deductions in the appropriate table on page 48 or 49. There are different tables for (a) single or head of household, (b) married without spouse filing certificate, and (c) married with both spouses filing certificates. Find the amount of the advance EIC payment shown in the appropriate table for the amount of wages paid.

Rounding.   The wage bracket tables for advance EIC payments have been rounded to whole dollar amounts.

  If you use the percentage method for advance EIC payments, the payments may be rounded to the nearest dollar. The rules for rounding discussed in section 13 also apply to advance EIC payments.

15. How Do Employment Taxes Apply to Farmwork?

Type of employment Income Tax Withholding, Social Security, and Medicare Federal Unemployment Tax
Farm Employment Includes:    
1. Cultivating soil; raising or harvesting any agricultural or horticultural commodity; the care of livestock, poultry, bees, fur-bearing animals, or wildlife. Taxable if $150 test or $2,500 test is met. See section 4. Taxable if either test in section 10 is met.
2. Work on a farm if major farm duties are in management or maintenance, etc., of farm tools or equipment or salvaging timber, or clearing brush or other debris, left by hurricane.
3. Work in connection with the production and harvesting of turpentine and other oleoresinous products.
4. Cotton ginning.
5. Operating or maintenance of ditches, reservoirs, canals, or waterways used only for supplying or storing water for farming purposes and not owned or operated for profit.
6. Processing, packaging, etc., any commodity in its unmanufactured state if employed by farm operator who produced over half of commodity processed or by group of up to 20 unincorporated farm operators if they produced all the commodity.
7. Hatching poultry on a farm.*
8. Production or harvesting of maple syrup.
Farm Employment Does Not Include:    
1. Handling or processing commodities after delivery to terminal market for commercial canning or freezing. Taxable under general employment rules. Farm rules do not apply. Taxable under general FUTA rules. Farm rules do not apply.
2. Operating or maintenance of ditches, canals, reservoirs or waterways not meeting tests in (5) above.
3. Processing, packaging, delivering, etc., any commodity in its unmanufactured state if group of farm operators do not meet the tests in (6) above.
4. Household employment.    
Special Employment Situations:    
1. Services not in the course of employer's trade or business on farm operated for profit (cash payments only). Taxable if $150 test or $2,500 test is met (see section 4), unless performed by parent employed by child. Taxable only if $50 or more is paid in a quarter and employee works on 24 or more different days in current or prior quarter.
2. Workers admitted under section 101(a)(15)(H)(ii)(a) of the Immigration and Nationality Act on a temporary basis to perform agricultural labor (“H-2(A)” workers). Exempt. Exempt.
3. Family employment. Exempt for employer's child under age 18, but counted for $150 test or $2,500 test. Taxable for spouse of employer. Exempt if services performed by employer's parent or spouse or by employer's child under age 21.
*Hatching poultry off the farm is not considered farmwork for income tax withholding, social security, and Medicare. It is considered farmwork for federal unemployment tax.

Tables for Percentage Method of Withholding

(For Wages Paid in 2010)
TABLE 1—WEEKLY Payroll Period
 
(a) SINGLE person (including head of household)— (b) MARRIED person—
If the amount of wages (after subtracting withholding allowances) is: The amount of income tax
to withhold is: 		If the amount of wages (after subtracting withholding allowances) is:   The amount of income
tax to withhold is:
Not over $116 $0   Not over $264 $0  
Over— But not over— of excess over— Over— But not over— of excess over—
$116 —$200   10% —$116 $264 —$471   10% —$264
$200 —$693   $8.40 plus 15% —$200 $471 —$1,457   $20.70 plus 15% —$471
$693 —$1,302   $82.35 plus 25% —$693 $1,457 —$1,809   $168.60 plus 25% —$1,457
$1,302 —$1,624   $234.60 plus 27% —$1,302 $1,809 —$2,386   $256.60 plus 27% —$1,809
$1,624 —$1,687   $321.54 plus 30% —$1,624 $2,386 —$2,789   $412.39 plus 25% —$2,386
$1,687 —$3,344   $340.44 plus 28% —$1,687 $2,789 —$4,173   $513.14 plus 28% —$2,789
$3,344 —$7,225   $804.40 plus 33% —$3,344 $4,173 —$7,335   $900.66 plus 33% —$4,173
$7,225 $2,085.13 plus 35% —$7,225 $7,335 $1,944.12 plus 35% —$7,335
TABLE 2—BIWEEKLY Payroll Period
     
(a) SINGLE person (including head of household)—   (b) MARRIED person—
If the amount of wages (after subtracting withholding
allowances) is: 		The amount of income tax
to withhold is: 		If the amount of wages (after subtracting withholding
allowances) is: 		The amount of income
tax to withhold is: 		 
Not over $233 $0   Not over $529 $0  
Over— But not over— of excess over— Over— But not over— of excess over—
$233 —$401   10% —$233 $529 —$942   10% —$529
$401 —$1,387   $16.80 plus 15% —$401 $942 —$2,913   $41.30 plus 15% —$942
$1,387 —$2,604   $164.70 plus 25% —$1,387 $2,913 —$3,617   $336.95 plus 25% —$2,913
$2,604 —$3,248   $468.95 plus 27% —$2,604 $3,617 —$4,771   $512.95 plus 27% —$3,617
$3,248 —$3,373   $642.83 plus 30% —$3,248 $4,771 —$5,579   $824.53 plus 25% —$4,771
$3,373 —$6,688   $680.33 plus 28% —$3,373 $5,579 —$8,346   $1,026.53 plus 28% —$5,579
$6,688 —$14,450   $1,608.53 plus 33% —$6,688 $8,346 —$14,669   $1,801.29 plus 33% —$8,346
$14,450 $4,169.99 plus 35% —$14,450 $14,669 $3,887.88 plus 35% —$14,669
TABLE 3—SEMIMONTHLY Payroll Period
     
(a) SINGLE person (including head of household)— (b) MARRIED person—
If the amount of wages (after subtracting withholding allowances) is: The amount of income tax
to withhold is: 		If the amount of wages (after subtracting withholding allowances) is:   The amount of income
tax to withhold is:
Not over $252 $0   Not over $573 $0  
Over— But not over— of excess over— Over— But not over— of excess over—
$252 —$434   10% —$252 $573 —$1,021   10% —$573
$434 —$1,502   $18.20 plus 15% —$434 $1,021 —$3,156   $44.80 plus 15% —$1,021
$1,502 —$2,821   $178.40 plus 25% —$1,502 $3,156 —$3,919   $365.05 plus 25% —$3,156
$2,821 —$3,519   $508.15 plus 27% —$2,821 $3,919 —$5,169   $555.80 plus 27% —$3,919
$3,519 —$3,654   $696.61 plus 30% —$3,519 $5,169 —$6,044   $893.30 plus 25% —$5,169
$3,654 —$7,246   $737.11 plus 28% —$3,654 $6,044 —$9,042   $1,112.05 plus 28% —$6,044
$7,246 —$15,654   $1,742.87 plus 33% —$7,246 $9,042 —$15,892   $1,951.49 plus 33% —$9,042
$15,654   $4,517.51 plus 35% —$15,654 $15,892   $4,211.99 plus 35% —$15,892
TABLE 4—MONTHLY Payroll Period
 
(a) SINGLE person (including head of household)— (b) MARRIED person—
If the amount of wages (after subtracting withholding allowances) is: The amount of income tax
to withhold is: 		If the amount of wages (after subtracting withholding
allowances) is: 		The amount of income
tax to withhold is:
Not over $504 $0   Not over $1,146 $0  
Over— But not over— of excess over— Over— But not over— of excess over—
$504 —$869   10% —$504 $1,146 —$2,042   10% —$1,146
$869 —$3,004   $36.50 plus 15% —$869 $2,042 —$6,313   $89.60 plus 15% —$2,042
$3,004 —$5,642   $356.75 plus 25% —$3,004 $6,313 —$7,838   $730.25 plus 25% —$6,313
$5,642 —$7,038   $1,016.25 plus 27% —$5,642 $7,838 —$10,338   $1,111.50 plus 27% —$7,838
$7,038 —$7,308   $1,393.17 plus 30% —$7,038 $10,338 —$12,088   $1,786.50 plus 25% —$10,338
$7,308 —$14,492   $1,474.17 plus 28% —$7,308 $12,088 —$18,083   $2,224.00 plus 28% —$12,088
$14,492 —$31,308   $3,485.69 plus 33% —$14,492 $18,083 —$31,783   $3,902.60 plus 33% —$18,083
$31,308 $9,034.97 plus 35% —$31,308 $31,783 $8,423.60 plus 35% —$31,783

Tables for Percentage Method of Withholding (continued)

(For Wages Paid in 2010)
TABLE 5—QUARTERLY Payroll Period
 
(a) SINGLE person (including head of household)— (b) MARRIED person—
If the amount of wages (after subtracting withholding allowances) is: The amount of income tax
to withhold is: 		If the amount of wages (after subtracting withholding allowances) is:   The amount of income
tax to withhold is:
Not over $1,513 $0   Not over $3,438 $0  
Over— But not over— of excess over— Over— But not over— of excess over—
$1,513 —$2,606   10% —$1,513 $3,438 —$6,125   10% —$3,438
$2,606 —$9,013   $109.30 plus 15% —$2,606 $6,125 —$18,938   $268.70 plus 15% —$6,125
$9,013 —$16,925   $1,070.35 plus 25% —$9,013 $18,938 —$23,513   $2,190.65 plus 25% —$18,938
$16,925 —$21,113   $3,048.35 plus 27% —$16,925 $23,513 —$31,013   $3,334.40 plus 27% —$23,513
$21,113 —$21,925   $4,179.11 plus 30% —$21,113 $31,013 —$36,263   $5,359.40 plus 25% —$31,013
$21,925 —$43,475   $4,422.71 plus 28% —$21,925 $36,263 —$54,250   $6,671.90 plus 28% —$36,263
$43,475 —$93,925   $10,456.71 plus 33% —$43,475 $54,250 —$95,350   $11,708.26 plus 33% —$54,250
$93,925 $27,105.21 plus 35% —$93,925 $95,350 $25,271.26 plus 35% —$95,350
TABLE 6—SEMIANNUAL Payroll Period
 
(a) SINGLE person (including head of household)— (b) MARRIED person—
If the amount of wages (after subtracting withholding allowances) is: The amount of income tax
to withhold is: 		If the amount of wages (after subtracting withholding
allowances) is: 		The amount of income
tax to withhold is:
Not over $3,025 $0   Not over $6,875 $0  
Over— But not over— of excess over— Over— But not over— of excess over—
$3,025 —$5,213   10% —$3,025 $6,875 —$12,250   10% —$6,875
$5,213 —$18,025   $218.80 plus 15% —$5,213 $12,250 —$37,875   $537.50 plus 15% —$12,250
$18,025 —$33,850   $2,140.60 plus 25% —$18,025 $37,875 —$47,025   $4,381.25 plus 25% —$37,875
$33,850 —$42,225   $6,096.85 plus 27% —$33,850 $47,025 —$62,025   $6,668.75 plus 27% —$47,025
$42,225 —$43,850   $8,358.10 plus 30% —$42,225 $62,025 —$72,525   $10,718.75 plus 25% —$62,025
$43,850 —$86,950   $8,845.60 plus 28% —$43,850 $72,525 —$108,500   $13,343.75 plus 28% —$72,525
$86,950 —$187,850   $20,913.60 plus 33% —$86,950 $108,500 —$190,700   $23,416.75 plus 33% —$108,500
$187,850 $54,210.60 plus 35% —$187,850 $190,700 $50,542.75 plus 35% —$190,700
TABLE 7—ANNUAL Payroll Period
 
(a) SINGLE person (including head of household)— (b) MARRIED person—
If the amount of wages (after subtracting withholding allowances) is: The amount of income tax
to withhold is: 		If the amount of wages (after subtracting withholding
allowances) is: 		The amount of income
tax to withhold is:
Not over $6,050 $0   Not over $13,750 $0  
Over— But not over— of excess over— Over— But not over— of excess over—
$6,050 —$10,425   10% —$6,050 $13,750 —$24,500   10% —$13,750
$10,425 —$36,050   $437.50 plus 15% —$10,425 $24,500 —$75,750   $1,075.00 plus 15% —$24,500
$36,050 —$67,700   $4,281.25 plus 25% —$36,050 $75,750 —$94,050   $8,762.50 plus 25% —$75,750
$67,700 —$84,450   $12,193.75 plus 27% —$67,700 $94,050 —$124,050   $13,337.50 plus 27% —$94,050
$84,450 —$87,700   $16,716.25 plus 30% —$84,450 $124,050 —$145,050   $21,437.50 plus 25% —$124,050
$87,700 —$173,900   $17,691.25 plus 28% —$87,700 $145,050 —$217,000   $26,687.50 plus 28% —$145,050
$173,900 —$375,700   $41,827.25 plus 33% —$173,900 $217,000 —$381,400   $46,833.50 plus 33% —$217,000
$375,700 $108,421.25 plus 35% —$375,700 $381,400 $101,085.50 plus 35% —$381,400
TABLE 8—DAILY or MISCELLANEOUS Payroll Period
 
(a) SINGLE person (including head of household)— (b) MARRIED person—
If the amount of wages (after subtracting withholding allowances) divided by the number of days in the payroll period is: The amount of income tax
to withhold per day is: 		If the amount of wages (after subtracting withholding allowances) divided by the number of days in the payroll period is: The amount of income
tax to withhold per day is:
Not over $23.30 $0   Not over $52.90 $0  
Over— But not over— of excess over— Over— But not over— of excess over—
$23.30 —$40.10   10% —$23.30 $52.90 —$94.20   10% —$52.90
$40.10 —$138.70   $1.68 plus 15% —$40.10 $94.20 —$291.30   $4.13 plus 15% —$94.20
$138.70 —$260.40   $16.47 plus 25% —$138.70 $291.30 —$361.70   $33.70 plus 25% —$291.30
$260.40 —$324.80   $46.90 plus 27% —$260.40 $361.70 —$477.10   $51.30 plus 27% —$361.70
$324.80 —$337.30   $64.29 plus 30% —$324.80 $477.10 —$557.90   $82.46 plus 25% —$477.10
$337.30 —$668.80   $68.04 plus 28% —$337.30 $557.90 —$834.60   $102.66 plus 28% —$557.90
$668.80 —$1,445.00   $160.86 plus 33% —$668.80 $834.60 —$1,466.90   $180.14 plus 33% —$834.60
$1,445.00 $417.01 plus 35% —$1,445.00 $1,466.90 $388.80 plus 35% —$1,466.90

SINGLE Persons—WEEKLY Payroll Period (For Wages Paid Through December 2010)

And the wages are– And the number of withholding allowances claimed is—
At least But less than 0 1 2 3 4 5 6 7 8 9 10
The amount of income tax to be withheld is—
$0 $120 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
120 125 1 0 0 0 0 0 0 0 0 0 0
125 130 1 0 0 0 0 0 0 0 0 0 0
130 135 2 0 0 0 0 0 0 0 0 0 0
135 140 2 0 0 0 0 0 0 0 0 0 0
140 145 3 0 0 0 0 0 0 0 0 0 0
145 150 3 0 0 0 0 0 0 0 0 0 0
150 155 4 0 0 0 0 0 0 0 0 0 0
155 160 4 0 0 0 0 0 0 0 0 0 0
160 165 5 0 0 0 0 0 0 0 0 0 0
165 170 5 0 0 0 0 0 0 0 0 0 0
170 175 6 0 0 0 0 0 0 0 0 0 0
175 180 6 0 0 0 0 0 0 0 0 0 0
180 185 7 0 0 0 0 0 0 0 0 0 0
185 190 7 0 0 0 0 0 0 0 0 0 0
190 195 8 1 0 0 0 0 0 0 0 0 0
195 200 8 1 0 0 0 0 0 0 0 0 0
200 210 9 2 0 0 0 0 0 0 0 0 0
210 220 11 3 0 0 0 0 0 0 0 0 0
220 230 12 4 0 0 0 0 0 0 0 0 0
230 240 14 5 0 0 0 0 0 0 0 0 0
240 250 15 6 0 0 0 0 0 0 0 0 0
250 260 17 7 0 0 0 0 0 0 0 0 0
260 270 18 8 1 0 0 0 0 0 0 0 0
270 280 20 9 2 0 0 0 0 0 0 0 0
280 290 21 11 3 0 0 0 0 0 0 0 0
290 300 23 12 4 0 0 0 0 0 0 0 0
300 310 24 14 5 0 0 0 0 0 0 0 0
310 320 26 15 6 0 0 0 0 0 0 0 0
320 330 27 17 7 0 0 0 0 0 0 0 0
330 340 29 18 8 1 0 0 0 0 0 0 0
340 350 30 20 9 2 0 0 0 0 0 0 0
350 360 32 21 11 3 0 0 0 0 0 0 0
360 370 33 23 12 4 0 0 0 0 0 0 0
370 380 35 24 14 5 0 0 0 0 0 0 0
380 390 36 26 15 6 0 0 0 0 0 0 0
390 400 38 27 17 7 0 0 0 0 0 0 0
400 410 39 29 18 8 1 0 0 0 0 0 0
410 420 41 30 20 9 2 0 0 0 0 0 0
420 430 42 32 21 11 3 0 0 0 0 0 0
430 440 44 33 23 12 4 0 0 0 0 0 0
440 450 45 35 24 14 5 0 0 0 0 0 0
450 460 47 36 26 15 6 0 0 0 0 0 0
460 470 48 38 27 17 7 0 0 0 0 0 0
470 480 50 39 29 18 8 1 0 0 0 0 0
480 490 51 41 30 20 9 2 0 0 0 0 0
490 500 53 42 32 21 10 3 0 0 0 0 0
500 510 54 44 33 23 12 4 0 0 0 0 0
510 520 56 45 35 24 13 5 0 0 0 0 0
520 530 57 47 36 26 15 6 0 0 0 0 0
530 540 59 48 38 27 16 7 0 0 0 0 0
540 550 60 50 39 29 18 8 1 0 0 0 0
550 560 62 51 41 30 19 9 2 0 0 0 0
560 570 63 53 42 32 21 10 3 0 0 0 0
570 580 65 54 44 33 22 12 4 0 0 0 0
580 590 66 56 45 35 24 13 5 0 0 0 0
590 600 68 57 47 36 25 15 6 0 0 0 0
600 610 69 59 48 38 27 16 7 0 0 0 0
610 620 71 60 50 39 28 18 8 1 0 0 0
620 630 72 62 51 41 30 19 9 2 0 0 0
630 640 74 63 53 42 31 21 10 3 0 0 0
640 650 75 65 54 44 33 22 12 4 0 0 0
650 660 77 66 56 45 34 24 13 5 0 0 0
660 670 78 68 57 47 36 25 15 6 0 0 0
670 680 80 69 59 48 37 27 16 7 0 0 0
680 690 81 71 60 50 39 28 18 8 1 0 0
690 700 83 72 62 51 40 30 19 9 2 0 0
700 710 85 74 63 53 42 31 21 10 3 0 0
710 720 88 75 65 54 43 33 22 12 4 0 0
720 730 90 77 66 56 45 34 24 13 5 0 0
$730 $740 $93 $78 $68 $57 $46 $36 $25 $15 $6 $0 $0
740 750 95 80 69 59 48 37 27 16 7 0 0
750 760 98 81 71 60 49 39 28 18 8 1 0
760 770 100 83 72 62 51 40 30 19 9 2 0
770 780 103 85 74 63 52 42 31 21 10 3 0
780 790 105 88 75 65 54 43 33 22 12 4 0
790 800 108 90 77 66 55 45 34 24 13 5 0
800 810 110 93 78 68 57 46 36 25 15 6 0
810 820 113 95 80 69 58 48 37 27 16 7 0
820 830 115 98 81 71 60 49 39 28 18 8 1
830 840 118 100 83 72 61 51 40 30 19 9 2
840 850 120 103 85 74 63 52 42 31 21 10 3
850 860 123 105 88 75 64 54 43 33 22 12 4
860 870 125 108 90 77 66 55 45 34 24 13 5
870 880 128 110 93 78 67 57 46 36 25 15 6
880 890 130 113 95 80 69 58 48 37 27 16 7
890 900 133 115 98 81 70 60 49 39 28 18 8
900 910 135 118 100 83 72 61 51 40 30 19 9
910 920 138 120 103 85 73 63 52 42 31 21 10
920 930 140 123 105 88 75 64 54 43 33 22 12
930 940 143 125 108 90 76 66 55 45 34 24 13
940 950 145 128 110 93 78 67 57 46 36 25 15
950 960 148 130 113 95 79 69 58 48 37 27 16
960 970 150 133 115 98 81 70 60 49 39 28 18
970 980 153 135 118 100 83 72 61 51 40 30 19
980 990 155 138 120 103 85 73 63 52 42 31 21
990 1000 158 140 123 105 88 75 64 54 43 33 22
1000 1010 160 143 125 108 90 76 66 55 45 34 24
1010 1020 163 145 128 110 93 78 67 57 46 36 25
1020 1030 165 148 130 113 95 79 69 58 48 37 27
1030 1040 168 150 133 115 98 81 70 60 49 39 28
1040 1050 170 153 135 118 100 83 72 61 51 40 30
1050 1060 173 155 138 120 103 85 73 63 52 42 31
1060 1070 175 158 140 123 105 88 75 64 54 43 33
1070 1080 178 160 143 125 108 90 76 66 55 45 34
1080 1090 180 163 145 128 110 93 78 67 57 46 36
1090 1100 183 165 148 130 113 95 79 69 58 48 37
1100 1110 185 168 150 133 115 98 81 70 60 49 39
1110 1120 188 170 153 135 118 100 82 72 61 51 40
1120 1130 190 173 155 138 120 103 85 73 63 52 42
1130 1140 193 175 158 140 123 105 87 75 64 54 43
1140 1150 195 178 160 143 125 108 90 76 66 55 45
1150 1160 198 180 163 145 128 110 92 78 67 57 46
1160 1170 200 183 165 148 130 113 95 79 69 58 48
1170 1180 203 185 168 150 133 115 97 81 70 60 49
1180 1190 205 188 170 153 135 118 100 82 72 61 51
1190 1200 208 190 173 155 138 120 102 85 73 63 52
1200 1210 210 193 175 158 140 123 105 87 75 64 54
1210 1220 213 195 178 160 143 125 107 90 76 66 55
1220 1230 215 198 180 163 145 128 110 92 78 67 57
1230 1240 218 200 183 165 148 130 112 95 79 69 58
1240 1250 220 203 185 168 150 133 115 97 81 70 60
                         
$1250 and over Use Table 1(a) for a SINGLE person on page 26. Also see the instructions on page 23.
                         

MARRIED Persons—WEEKLY Payroll Period (For Wages Paid Through December 2010)

And the wages are– And the number of withholding allowances claimed is—
At least But less than 0 1 2 3 4 5 6 7 8 9 10
The amount of income tax to be withheld is—
$0 $270 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
270 280 1 0 0 0 0 0 0 0 0 0 0
280 290 2 0 0 0 0 0 0 0 0 0 0
290 300 3 0 0 0 0 0 0 0 0 0 0
300 310 4 0 0 0 0 0 0 0 0 0 0
310 320 5 0 0 0 0 0 0 0 0 0 0
320 330 6 0 0 0 0 0 0 0 0 0 0
330 340 7 0 0 0 0 0 0 0 0 0 0
340 350 8 1 0 0 0 0 0 0 0 0 0
350 360 9 2 0 0 0 0 0 0 0 0 0
360 370 10 3 0 0 0 0 0 0 0 0 0
370 380 11 4 0 0 0 0 0 0 0 0 0
380 390 12 5 0 0 0 0 0 0 0 0 0
390 400 13 6 0 0 0 0 0 0 0 0 0
400 410 14 7 0 0 0 0 0 0 0 0 0
410 420 15 8 1 0 0 0 0 0 0 0 0
420 430 16 9 2 0 0 0 0 0 0 0 0
430 440 17 10 3 0 0 0 0 0 0 0 0
440 450 18 11 4 0 0 0 0 0 0 0 0
450 460 19 12 5 0 0 0 0 0 0 0 0
460 470 20 13 6 0 0 0 0 0 0 0 0
470 480 21 14 7 0 0 0 0 0 0 0 0
480 490 23 15 8 1 0 0 0 0 0 0 0
490 500 24 16 9 2 0 0 0 0 0 0 0
500 510 26 17 10 3 0 0 0 0 0 0 0
510 520 27 18 11 4 0 0 0 0 0 0 0
520 530 29 19 12 5 0 0 0 0 0 0 0
530 540 30 20 13 6 0 0 0 0 0 0 0
540 550 32 21 14 7 0 0 0 0 0 0 0
550 560 33 23 15 8 1 0 0 0 0 0 0
560 570 35 24 16 9 2 0 0 0 0 0 0
570 580 36 26 17 10 3 0 0 0 0 0 0
580 590 38 27 18 11 4 0 0 0 0 0 0
590 600 39 29 19 12 5 0 0 0 0 0 0
600 610 41 30 20 13 6 0 0 0 0 0 0
610 620 42 32 21 14 7 0 0 0 0 0 0
620 630 44 33 23 15 8 1 0 0 0 0 0
630 640 45 35 24 16 9 2 0 0 0 0 0
640 650 47 36 26 17 10 3 0 0 0 0 0
650 660 48 38 27 18 11 4 0 0 0 0 0
660 670 50 39 29 19 12 5 0 0 0 0 0
670 680 51 41 30 20 13 6 0 0 0 0 0
680 690 53 42 32 21 14 7 0 0 0 0 0
690 700 54 44 33 23 15 8 1 0 0 0 0
700 710 56 45 35 24 16 9 2 0 0 0 0
710 720 57 47 36 26 17 10 3 0 0 0 0
720 730 59 48 38 27 18 11 4 0 0 0 0
730 740 60 50 39 29 19 12 5 0 0 0 0
740 750 62 51 41 30 20 13 6 0 0 0 0
750 760 63 53 42 32 21 14 7 0 0 0 0
760 770 65 54 44 33 23 15 8 1 0 0 0
770 780 66 56 45 35 24 16 9 2 0 0 0
780 790 68 57 47 36 26 17 10 3 0 0 0
790 800 69 59 48 38 27 18 11 4 0 0 0
800 810 71 60 50 39 29 19 12 5 0 0 0
810 820 72 62 51 41 30 20 13 6 0 0 0
820 830 74 63 53 42 32 21 14 7 0 0 0
830 840 75 65 54 44 33 23 15 8 1 0 0
840 850 77 66 56 45 35 24 16 9 2 0 0
850 860 78 68 57 47 36 26 17 10 3 0 0
860 870 80 69 59 48 38 27 18 11 4 0 0
870 880 81 71 60 50 39 29 19 12 5 0 0
880 890 83 72 62 51 41 30 20 13 6 0 0
890 900 84 74 63 53 42 32 21 14 7 0 0
900 910 86 75 65 54 44 33 23 15 8 1 0
910 920 87 77 66 56 45 35 24 16 9 2 0
920 930 89 78 68 57 47 36 26 17 10 3 0
930 940 90 80 69 59 48 38 27 18 11 4 0
940 950 92 81 71 60 50 39 29 19 12 5 0
950 960 93 83 72 62 51 41 30 20 13 6 0
                         
$960 $970 $95 $84 $74 $63 $53 $42 $32 $21 $14 $7 $0
970 980 96 86 75 65 54 44 33 23 15 8 1
980 990 98 87 77 66 56 45 35 24 16 9 2
990 1000 99 89 78 68 57 47 36 26 17 10 3
1000 1010 101 90 80 69 59 48 38 27 18 11 4
1010 1020 102 92 81 71 60 50 39 29 19 12 5
1020 1030 104 93 83 72 62 51 41 30 20 13 6
1030 1040 105 95 84 74 63 53 42 32 21 14 7
1040 1050 107 96 86 75 65 54 44 33 23 15 8
1050 1060 108 98 87 77 66 56 45 35 24 16 9
1060 1070 110 99 89 78 68 57 47 36 26 17 10
1070 1080 111 101 90 80 69 59 48 38 27 18 11
1080 1090 113 102 92 81 71 60 50 39 29 19 12
1090 1100 114 104 93 83 72 62 51 41 30 20 13
1100 1110 116 105 95 84 74 63 53 42 32 21 14
1110 1120 117 107 96 86 75 65 54 44 33 22 15
1120 1130 119 108 98 87 77 66 56 45 35 24 16
1130 1140 120 110 99 89 78 68 57 47 36 25 17
1140 1150 122 111 101 90 80 69 59 48 38 27 18
1150 1160 123 113 102 92 81 71 60 50 39 28 19
1160 1170 125 114 104 93 83 72 62 51 41 30 20
1170 1180 126 116 105 95 84 74 63 53 42 31 21
1180 1190 128 117 107 96 86 75 65 54 44 33 22
1190 1200 129 119 108 98 87 77 66 56 45 34 24
1200 1210 131 120 110 99 89 78 68 57 47 36 25
1210 1220 132 122 111 101 90 80 69 59 48 37 27
1220 1230 134 123 113 102 92 81 71 60 50 39 28
1230 1240 135 125 114 104 93 83 72 62 51 40 30
1240 1250 137 126 116 105 95 84 74 63 53 42 31
1250 1260 138 128 117 107 96 86 75 65 54 43 33
1260 1270 140 129 119 108 98 87 77 66 56 45 34
1270 1280 141 131 120 110 99 89 78 68 57 46 36
1280 1290 143 132 122 111 101 90 80 69 59 48 37
1290 1300 144 134 123 113 102 92 81 71 60 49 39
1300 1310 146 135 125 114 104 93 83 72 62 51 40
1310 1320 147 137 126 116 105 95 84 74 63 52 42
1320 1330 149 138 128 117 107 96 86 75 65 54 43
1330 1340 150 140 129 119 108 98 87 77 66 55 45
1340 1350 152 141 131 120 110 99 89 78 68 57 46
1350 1360 153 143 132 122 111 101 90 80 69 58 48
1360 1370 155 144 134 123 113 102 92 81 71 60 49
1370 1380 156 146 135 125 114 104 93 83 72 61 51
1380 1390 158 147 137 126 116 105 95 84 74 63 52
1390 1400 159 149 138 128 117 107 96 86 75 64 54
                         
$1400 and over Use Table 1(b) for a MARRIED person on page 26. Also see the instructions on page 23.
                         

SINGLE Persons—BIWEEKLY Payroll Period (For Wages Paid Through December 2010)

And the wages are– And the number of withholding allowances claimed is—
At least But less than 0 1 2 3 4 5 6 7 8 9 10
The amount of income tax to be withheld is—
$0 $240 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
240 245 1 0 0 0 0 0 0 0 0 0 0
245 250 1 0 0 0 0 0 0 0 0 0 0
250 260 2 0 0 0 0 0 0 0 0 0 0
260 270 3 0 0 0 0 0 0 0 0 0 0
270 280 4 0 0 0 0 0 0 0 0 0 0
280 290 5 0 0 0 0 0 0 0 0 0 0
290 300 6 0 0 0 0 0 0 0 0 0 0
300 310 7 0 0 0 0 0 0 0 0 0 0
310 320 8 0 0 0 0 0 0 0 0 0 0
320 330 9 0 0 0 0 0 0 0 0 0 0
330 340 10 0 0 0 0 0 0 0 0 0 0
340 350 11 0 0 0 0 0 0 0 0 0 0
350 360 12 0 0 0 0 0 0 0 0 0 0
360 370 13 0 0 0 0 0 0 0 0 0 0
370 380 14 0 0 0 0 0 0 0 0 0 0
380 390 15 1 0 0 0 0 0 0 0 0 0
390 400 16 2 0 0 0 0 0 0 0 0 0
400 410 17 3 0 0 0 0 0 0 0 0 0
410 420 19 4 0 0 0 0 0 0 0 0 0
420 430 20 5 0 0 0 0 0 0 0 0 0
430 440 22 6 0 0 0 0 0 0 0 0 0
440 450 23 7 0 0 0 0 0 0 0 0 0
450 460 25 8 0 0 0 0 0 0 0 0 0
460 470 26 9 0 0 0 0 0 0 0 0 0
470 480 28 10 0 0 0 0 0 0 0 0 0
480 490 29 11 0 0 0 0 0 0 0 0 0
490 500 31 12 0 0 0 0 0 0 0 0 0
500 520 33 14 0 0 0 0 0 0 0 0 0
520 540 36 16 2 0 0 0 0 0 0 0 0
540 560 39 18 4 0 0 0 0 0 0 0 0
560 580 42 21 6 0 0 0 0 0 0 0 0
580 600 45 24 8 0 0 0 0 0 0 0 0
600 620 48 27 10 0 0 0 0 0 0 0 0
620 640 51 30 12 0 0 0 0 0 0 0 0
640 660 54 33 14 0 0 0 0 0 0 0 0
660 680 57 36 16 2 0 0 0 0 0 0 0
680 700 60 39 18 4 0 0 0 0 0 0 0
700 720 63 42 21 6 0 0 0 0 0 0 0
720 740 66 45 24 8 0 0 0 0 0 0 0
740 760 69 48 27 10 0 0 0 0 0 0 0
760 780 72 51 30 12 0 0 0 0 0 0 0
780 800 75 54 33 14 0 0 0 0 0 0 0
800 820 78 57 36 16 2 0 0 0 0 0 0
820 840 81 60 39 18 4 0 0 0 0 0 0
840 860 84 63 42 21 6 0 0 0 0 0 0
860 880 87 66 45 24 8 0 0 0 0 0 0
880 900 90 69 48 27 10 0 0 0 0 0 0
900 920 93 72 51 30 12 0 0 0 0 0 0
920 940 96 75 54 33 14 0 0 0 0 0 0
940 960 99 78 57 36 16 2 0 0 0 0 0
960 980 102 81 60 39 18 4 0 0 0 0 0
980 1000 105 84 63 42 21 6 0 0 0 0 0
1000 1020 108 87 66 45 24 8 0 0 0 0 0
1020 1040 111 90 69 48 27 10 0 0 0 0 0
1040 1060 114 93 72 51 30 12 0 0 0 0 0
1060 1080 117 96 75 54 33 14 0 0 0 0 0
1080 1100 120 99 78 57 36 16 2 0 0 0 0
1100 1120 123 102 81 60 39 18 4 0 0 0 0
1120 1140 126 105 84 63 42 21 6 0 0 0 0
1140 1160 129 108 87 66 45 24 8 0 0 0 0
1160 1180 132 111 90 69 48 27 10 0 0 0 0
1180 1200 135 114 93 72 51 30 12 0 0 0 0
1200 1220 138 117 96 75 54 33 14 0 0 0 0
1220 1240 141 120 99 78 57 36 16 1 0 0 0
1240 1260 144 123 102 81 60 39 18 3 0 0 0
1260 1280 147 126 105 84 63 42 21 5 0 0 0
1280 1300 150 129 108 87 66 45 24 7 0 0 0
1300 1320 153 132 111 90 69 48 27 9 0 0 0
1320 1340 156 135 114 93 72 51 30 11 0 0 0
$1340 $1360 $159 $138 $117 $96 $75 $54 $33 $13 $0 $0 $0
1360 1380 162 141 120 99 78 57 36 15 1 0 0
1380 1400 166 144 123 102 81 60 39 18 3 0 0
1400 1420 171 147 126 105 84 63 42 21 5 0 0
1420 1440 176 150 129 108 87 66 45 24 7 0 0
1440 1460 181 153 132 111 90 69 48 27 9 0 0
1460 1480 186 156 135 114 93 72 51 30 11 0 0
1480 1500 191 159 138 117 96 75 54 33 13 0 0
1500 1520 196 162 141 120 99 78 57 36 15 1 0
1520 1540 201 165 144 123 102 81 60 39 18 3 0
1540 1560 206 170 147 126 105 84 63 42 21 5 0
1560 1580 211 175 150 129 108 87 66 45 24 7 0
1580 1600 216 180 153 132 111 90 69 48 27 9 0
1600 1620 221 185 156 135 114 93 72 51 30 11 0
1620 1640 226 190 159 138 117 96 75 54 33 13 0
1640 1660 231 195 162 141 120 99 78 57 36 15 1
1660 1680 236 200 165 144 123 102 81 60 39 18 3
1680 1700 241 205 170 147 126 105 84 63 42 21 5
1700 1720 246 210 175 150 129 108 87 66 45 24 7
1720 1740 251 215 180 153 132 111 90 69 48 27 9
1740 1760 256 220 185 156 135 114 93 72 51 30 11
1760 1780 261 225 190 159 138 117 96 75 54 33 13
1780 1800 266 230 195 162 141 120 99 78 57 36 15
1800 1820 271 235 200 165 144 123 102 81 60 39 18
1820 1840 276 240 205 170 147 126 105 84 63 42 21
1840 1860 281 245 210 175 150 129 108 87 66 45 24
1860 1880 286 250 215 180 153 132 111 90 69 48 27
1880 1900 291 255 220 185 156 135 114 93 72 51 30
1900 1920 296 260 225 190 159 138 117 96 75 54 33
1920 1940 301 265 230 195 162 141 120 99 78 57 36
1940 1960 306 270 235 200 165 144 123 102 81 60 39
1960 1980 311 275 240 205 170 147 126 105 84 63 42
1980 2000 316 280 245 210 175 150 129 108 87 66 45
2000 2020 321 285 250 215 180 153 132 111 90 69 48
2020 2040 326 290 255 220 185 156 135 114 93 72 51
2040 2060 331 295 260 225 190 159 138 117 96 75 54
2060 2080 336 300 265 230 195 162 141 120 99 78 57
2080 2100 341 305 270 235 200 165 144 123 102 81 60
                         
$2100 and over Use Table 2(a) for a SINGLE person on page 26. Also see the instructions on page 23.
                         

MARRIED Persons—BIWEEKLY Payroll Period (For Wages Paid Through December 2010)

And the wages are– And the number of withholding allowances claimed is—
At least But less than 0 1 2 3 4 5 6 7 8 9 10
The amount of income tax to be withheld is—
$0 $540 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
540 560 2 0 0 0 0 0 0 0 0 0 0
560 580 4 0 0 0 0 0 0 0 0 0 0
580 600 6 0 0 0 0 0 0 0 0 0 0
600 620 8 0 0 0 0 0 0 0 0 0 0
620 640 10 0 0 0 0 0 0 0 0 0 0
640 660 12 0 0 0 0 0 0 0 0 0 0
660 680 14 0 0 0 0 0 0 0 0 0 0
680 700 16 2 0 0 0 0 0 0 0 0 0
700 720 18 4 0 0 0 0 0 0 0 0 0
720 740 20 6 0 0 0 0 0 0 0 0 0
740 760 22 8 0 0 0 0 0 0 0 0 0
760 780 24 10 0 0 0 0 0 0 0 0 0
780 800 26 12 0 0 0 0 0 0 0 0 0
800 820 28 14