Publication 80 - Introductory Material


Future Developments

For the latest information about developments related to Publication 80 (Circular SS), such as legislation enacted after it was published, go to www.irs.gov/pub80.

What's New

Social security and Medicare tax for 2014. The social security tax rate is 6.2% each for the employee and employer, unchanged from 2013. The social security wage base limit is $117,000.The Medicare tax rate is 1.45% each for the employee and employer, unchanged from 2013. There is no wage base limit for Medicare tax.Social security and Medicare taxes apply to the wages of household workers you pay $1,900 or more in cash or an equivalent form of compensation. Social security and Medicare taxes apply to election workers who are paid $1,600 or more in cash or an equivalent form of compensation.

Change of responsible party. . Beginning January 1, 2014, any entity with an employer identification number (EIN) must file Form 8822-B, Change of Address or Responsible Party—Business, to report the latest change to its responsible party. Form 8822-B must be filed within 60 days of the change. If the change in the identity of your responsible party occurred before 2014, and you have not previously notified the IRS of the change, file Form 8822-B before March 1, 2014, reporting only the most recent change. For a definition of “responsible party”, see the Form 8822-B instructions.

Same-sex marriage. For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. For more information, see Revenue Ruling 2013-17, 2013-38 I.R.B. 201, available at www.irs.gov/irb/2013-38_IRB/ar07.html. Notice 2013-61 provides special administrative procedures for employers to make claims for refund or adjustments of overpayments of social security and Medicare taxes with respect to certain same-sex spouse benefits before expiration of the period of limitations. Notice 2013-61, 2013-44 I.R.B. 432, is available at www.irs.gov/irb/2013-44_IRB/ar10.html.

Reminders

Additional Medicare Tax withholding. In addition to withholding Medicare tax at 1.45%, you must withhold a 0.9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Additional Medicare Tax is only imposed on the employee. There is no employer share of Additional Medicare Tax. All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Employment and Payments , in section 12. For more information on Additional Medicare Tax, visit IRS.gov and enter “Additional Medicare Tax” in the search box.

Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans. The work opportunity tax credit is available for eligible unemployed veterans who begin work on or after November 22, 2011, and before January 1, 2014. Qualified tax-exempt organizations that hire eligible unemployed veterans can claim the work opportunity tax credit against their payroll tax liability using Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. For more information, visit IRS.gov and enter “work opportunity tax credit” in the search box.

Outsourcing payroll duties. Employers are responsible to ensure that tax returns are filed and deposits and payments are made, even if the employer contracts with a third party to perform these acts. The employer remains responsible if the third party fails to perform any required action. If you choose to outsource any of your payroll and related tax duties (that is, withholding, reporting, and paying over social security, Medicare, FUTA, and income taxes) to a third-party payer such as a payroll service provider or reporting agent, visit IRS.gov and enter “outsourcing payroll duties” in the search box for helpful information on this topic.

Residents of the Philippines working in the Commonwealth of the Northern Mariana Islands (CNMI). The IRS will not assert that an employer has understated liability for social security and Medicare taxes because they failed to treat services performed before January 1, 2015, in the CNMI by a resident of the Philippines as employment as defined under Internal Revenue Code section 3121(b). For more information, see Announcement 2012-43, 2012-51 I.R.B. 723, available at www.irs.gov/irb/2012-51_IRB/ar15.html.

CNMI government employees now subject to social security and Medicare taxes. Beginning in the fourth calendar quarter of 2012, CNMI government employees are subject to social security and Medicare taxes.

COBRA premium assistance credit. The credit for COBRA premium assistance payments applies to premiums paid for employees involuntarily terminated between September 1, 2008 and May 31, 2010, and to premiums paid for up to 15 months. See COBRA premium assistance credit in Publication 15 (Circular E), Employer's Tax Guide. You can get Publication 15 (Circular E) at IRS.gov.

You must receive written notice from the IRS to file Form 944. If you have been filing Forms 941-SS and believe your employment taxes for the calendar year will be $1,000 or less, and you would like to file Form 944, Employer's ANNUAL Federal Tax Return, instead of Forms 941-SS, you must contact the IRS to request to file Form 944. You must receive written notice from the IRS to file Form 944 instead of Forms 941-SS before you may file this form. For more information on requesting to file Form 944 visit IRS.gov and enter “file employment taxes annually” in the search box.

Federal employers in the CNMI. The U.S. Treasury Department and the CNMI Division of Revenue and Taxation entered into an agreement under 5 USC 5517 in December 2006. Under this agreement, all federal employers (including the Department of Defense) are required to withhold CNMI income taxes (rather than federal income taxes) and deposit the CNMI taxes with the CNMI Treasury for employees who are subject to CNMI taxes and whose regular place of federal employment is in the CNMI. Federal employers are also required to file quarterly and annual reports with the CNMI Division of Revenue and Taxation. For questions, contact the CNMI Division of Revenue and Taxation.

Change of address. Use Form 8822-B to notify the IRS of an address change. Do not mail Form 8822-B with your employment tax return.

Federal tax deposits must be made by electronic funds transfer. You must use electronic funds transfer to make all federal tax deposits. Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. EFTPS is a free service provided by the Department of Treasury. Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. For more information on making federal tax deposits, see How To Deposit in section 8.For more information about EFTPS or to enroll in EFTPS, visit the EFTPS website at www.eftps.gov or call 1-800-555-4477 (U.S. Virgin Islands only) or 303-967-5916 (toll call) or 1-800-733-4829 (TDD). Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax Payment System: A Guide To Getting Started.

Electronic filing and payment. Using electronic options can make filing a return and paying your federal tax easier. Use the Electronic Federal Tax Payment System (EFTPS) to make deposits or pay in full, whether you rely on a tax professional or prepare your own taxes. You can use IRS e-file to file certain returns. If there is a balance due on the return, you can e-file and e-pay in a single step by authorizing an electronic funds withdrawal (EFW) from your bank account while e-filing. Do not use EFW to pay taxes that are required to be deposited. Visit the IRS website at www.irs.gov/efile for more information on filing electronically. For more information on paying your taxes using EFW, visit the IRS website at www.irs.gov/e-pay. A fee may be charged to file electronically.

  • For EFTPS, visit www.eftps.gov or call EFTPS Customer Service at 1-800-555-4477 (U.S. Virgin Islands only) or 303-967-5916 (toll call).

  • For electronic filing of Forms W-2AS, W-2CM, W-2GU, W-2VI, Wage and Tax Statements; W-3SS, Transmittal of Wage and Tax Statements; and W-2c, Corrected Wage and Tax Statement, visit www.socialsecurity.gov/employer.

If you are filing your tax return or paying your federal taxes electronically, a valid EIN is required. If a valid EIN is not provided, the return or payment will not be processed. This may result in penalties and delays in processing your return or payment.

Electronic option for filing Forms W-2AS, W-2CM, W-2GU, or W-2VI. Employers in American Samoa, the CNMI, Guam, and the U.S. Virgin Islands can now use the Social Security Administration's W-2 Online service to create, save, print, and submit up to 50 Forms W-2AS, W-2CM, W-2GU, or W-2VI at a time over the Internet. Form W-3SS will be generated automatically based on your Forms W-2AS, W-2CM, W-2GU, or W-2VI. For more information, visit Social Security Administration's SSA website at www.ssa.gov/bso/bsowelcome.htm.

Credit or debit card payments. For information on paying your taxes with a credit or debit card, visit the IRS website at www.irs.gov/e-pay. However, do not use credit or debit cards to make federal tax deposits.

Hiring new employees. Record the number and name from each new employee's social security card. An employee who does not have a social security card should apply for one on Form SS-5, Application for a Social Security Card. See section 3.

Reporting discrepancies between Forms 941-SS (or Form 944) and Forms W-2. File Schedule D (Form 941), Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations, to explain certain wage, tax, and payment discrepancies between Forms 941-SS (or Form 944), and Forms W-2 that were caused by acquisitions, statutory mergers, or consolidations. For more information, see the Instructions for Schedule D (Form 941).

Apply for an employer identification number (EIN) online. You can apply for an EIN online by visiting IRS.gov and clicking on the Apply for an EIN Online link under Tools.

Dishonored payments. Any form of payment that is dishonored and returned from a financial institution is subject to a penalty. The penalty is $25 or 2% of the payment, whichever is more. However, the penalty on dishonored payments of $24.99 or less is an amount equal to the payment. For example, a dishonored payment of $18 is charged a penalty of $18.

Private delivery services. You can use certain private delivery services designated by the IRS to send tax returns or payments. The list includes only the following:

  • DHL Express (DHL): DHL Same Day Service.

  • Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First.

  • United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, and UPS Worldwide Express.

For the IRS mailing address to use if you are using a private delivery service, go to IRS.gov and enter “private delivery service” in the search box.Your private delivery service can tell you how to get written proof of the mailing date.

Private delivery services cannot deliver items to P.O. boxes. You must use the U.S. Postal Service to mail any item to an IRS P.O. box address.

Recordkeeping. Keep all records of employment taxes for 4 years. These should be available for IRS review.There is no required format for such records, but they should include your EIN; the amounts and dates of all wage payments (including fringe benefits) and tips reported; the names, addresses, and occupations of employees receiving such payments and their social security numbers; copies of returns filed; dates of employment; and the dates and amounts of deposits made. Farm employers must keep a record of the name, permanent address, and EIN of each crew leader. See Farm Crew Leaders in section 2.

Disregarded entities and qualified subchapter S subsidiaries (QSubs). Eligible single-owner disregarded entities and QSubs are treated as separate entities for employment tax purposes. Eligible single-member entities that have not elected to be taxed as corporations must report and pay employment taxes on wages paid to their employees using the entities' own names and EINs. See Regulations sections 1.1361-4(a)(7) and 301.7701-2(c)(2)(iv).

Photographs of missing children. The IRS is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

Calendar

 

If any date for filing a return, furnishing a form, or depositing taxes falls on a Saturday, Sunday, or legal holiday, the due date is the next business day. A statewide legal holiday delays a filing due date only if the IRS office where you are required to file is located in that state. However, a statewide legal holiday does not delay the due date of federal tax deposits. See Deposits on Business Days Only in section 8. For any filing due date, you will meet the “file” or “furnish” requirement if the envelope containing the return or form is properly addressed, contains sufficient postage, and is postmarked by the U.S. Postal Service on or before the due date, or sent by an IRS-designated delivery service on or before the due date. See Private delivery services under Reminders.

The following are important dates and responsibilities. Also see Publication 509, Tax Calendars.

By January 31. 

  • Furnish wage and tax statements to employees. Give each employee a completed Form W-2AS, W-2CM, W-2GU, or W-2VI. See section 10 for more information.

  • File Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, with the IRS. If you deposited all Form 943 taxes when due, you have 10 additional calendar days to file.

  • U.S. Virgin Islands employers only must file Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, with the IRS. Pay or deposit (if more than $500) any balance of the tax due. If you deposited the full amount of taxes when due, you have 10 additional calendar days to file.

  • File Form 944 with the IRS if you were notified by the IRS to file Form 944 instead of quarterly Forms 941-SS. If you deposited the full amount of taxes when due, you have 10 additional calendar days to file.

By February 28. File paper wage and tax statements with the Social Security Administration (SSA). File Copy A of Forms W-2AS, W-2CM, W-2GU, or W-2VI, and Form W-3SS with the Social Security Administration (SSA). For electronically filed returns, see By March 31 next.

By March 31. File electronic Forms W-2AS, W-2CM, W-2GU, or W-2VI with the SSA. Visit the SSA's Reporting Instructions & Information webpage at www.socialsecurity.gov/employer for more information.

By April 30, July 31, October 31, and January 31. File Form 941-SS with the IRS. If you deposited the full amount of taxes when due, you have 10 additional calendar days to file. Do not file Forms 941-SS for these quarters if you have been notified to file Form 944 and you did not request to file quarterly Forms 941-SS.Deposit FUTA tax for the quarter (including any amount carried over from other quarters) if over $500. If $500 or less, carry it over to the next quarter. See section 11 for more information.


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