Federal Employer's Tax Guide
Extracted from PDF file 2020-federal-publication-15.pdf, last modified February 2021
Employer's Tax GuideDepartment of the Treasury Internal Revenue Service Contents What's New . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Reminders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Publication 15 Cat. No. 10000W Calendar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 (Circular E), Employer's Tax Guide Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 For use in 2021 1. Employer Identification Number (EIN) . . . . . . . 12 2. Who Are Employees? . . . . . . . . . . . . . . . . . . . . 12 3. Family Employees . . . . . . . . . . . . . . . . . . . . . . 14 4. Employee's Social Security Number (SSN) . . . 15 5. Wages and Other Compensation . . . . . . . . . . . 16 6. Tips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 7. Supplemental Wages . . . . . . . . . . . . . . . . . . . . 20 8. Payroll Period . . . . . . . . . . . . . . . . . . . . . . . . . . 21 9. Withholding From Employees' Wages . . . . . . . 22 10. Required Notice to Employees About the Earned Income Credit (EIC) . . . . . . . . . . . . . . 27 11. Depositing Taxes . . . . . . . . . . . . . . . . . . . . . . 27 12. Filing Form 941 or Form 944 . . . . . . . . . . . . . . 33 13. Reporting Adjustments to Form 941 or Form 944 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 14. Federal Unemployment (FUTA) Tax . . . . . . . . 38 15. Special Rules for Various Types of Services and Payments . . . . . . . . . . . . . . . . . 41 16. Third-Party Payer Arrangements . . . . . . . . . . 46 How To Get Tax Help . . . . . . . . . . . . . . . . . . . . . . 47 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Future Developments For the latest information about developments related to Pub. 15, such as legislation enacted after it was published, go to IRS.gov/Pub15. At the time this publication went to print, Congress was considering changes to coronavirus (COVID-19) tax relief. If new legislation impacts this publication, updates will be posted to IRS.gov/Pub15. You may also go to IRS.gov/ Coronavirus for the latest information about COVID-19 tax relief. Also check for recent developments that impact your employment tax return by going to the Recent Developments section on IRS.gov/Form941 or IRS.gov/ Form944. Get forms and other information faster and easier at: • IRS.gov (English) • IRS.gov/Spanish (Español) • IRS.gov/Chinese (中文) Feb 04, 2021 • IRS.gov/Korean (한국어) • IRS.gov/Russian (Pусский) • IRS.gov/Vietnamese (TiếngViệt) What's New Coronavirus (COVID-19) related employment tax credits and other tax relief. • The Families First Coronavirus Response Act (FFCRA), enacted on March 18, 2020, and amended by the COVID-related Tax Relief Act of 2020, provides certain employers with tax credits that reimburse them for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19. Qualified sick and family leave wages and the related credits for qualified sick and family leave wages are only reported on employment tax returns with respect to wages paid for leave taken in quarters beginning after March 31, 2020, and before April 1, 2021, unless extended by future legislation. If you paid qualified sick and family leave wages in 2021 for 2020 leave, you will claim the credit on your 2021 employment tax return. Under the FFCRA, certain employers with fewer than 500 employees provide paid sick and family leave to employees unable to work or telework. The FFCRA required such employers to provide leave to such employees after March 31, 2020, and before January 1, 2021. The COVID-related Tax Relief Act of 2020 extends the periods for which employers providing such leave that otherwise meets the requirements of the FFCRA may continue to claim tax credits to wages paid for leave taken before April 1, 2021, although the requirement that employers provide the leave still expired on December 31, 2020. For more information about the credit for qualified sick and family leave wages, including the changes to the credits made under the COVID-related Tax Relief Act of 2020, and to see if future legislation extends the dates that the credit may be claimed, go to IRS.gov/PLC. Also check the Recent Developments section on IRS.gov/Form941 or IRS.gov/Form944. • The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted on March 27, 2020, and amended by the Taxpayer Certainty and Disaster Tax Relief Act of 2020, provides eligible employers with an employee retention credit if they keep employees on their payroll, despite experiencing economic hardship related to COVID-19. The employee retention credit is claimed on your employment tax return. The employee retention credit was extended to 2021 for qualified wages paid to employees between January 1, 2021, and June 30, 2021. The employee retention credit was previously available for qualified wages paid to employees between March 13, 2020, and December 31, 2020. Different rules apply for qualified wages paid after December 31, 2020. For more information about the employee retention credit, and to see if future legislation extends the dates that the credit may be claimed, go to IRS.gov/ERC. Also check the Recent Developments section on IRS.gov/ Form941 or IRS.gov/Form944. security taxes. The deferred amount is reported on your 2020 employment tax return. The deferred amount of the employer share of social security tax is only available for deposits due on or after March 27, 2020, and before January 1, 2021, as well as deposits and payments due after January 1, 2021, that are required for wages paid on or after March 27, 2020, and before January 1, 2021. One-half of the deferred amount of the employer share of social security tax is due by December 31, 2021, and the remainder is due by December 31, 2022. Any payments or deposits you make before December 31, 2021, are first applied against your payment due on December 31, 2021, and then applied against your payment due on December 31, 2022. Because both December 31, 2021, and December 31, 2022, are nonbusiness days, payments made on the next business day will be considered timely. For more information about the deferral of employment tax deposits, go to IRS.gov/ETD and see the Instructions for Form 941 or the Instructions for Form 944, available at IRS.gov/Form941 and IRS.gov/ Form944, respectively. • The Presidential Memorandum on Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster, issued on August 8, 2020, directs the Secretary of the Treasury to defer the withholding, deposit, and payment of the employee share of social security tax on wages paid during the period from September 1, 2020, through December 31, 2020. The deferral of the withholding and payment of the employee share of social security tax was available for employees whose social security wages paid for a biweekly pay period were less than $4,000, or the equivalent threshold amount for other pay periods. The COVID-related Tax Relief Act of 2020 defers the due date for the withholding and payment of the employee share of social security tax until the period beginning on January 1, 2021, and ending on December 31, 2021. For more information about the deferral of employee social security tax, see Notice 2020-65, 2020-38 I.R.B. 567, available at IRS.gov/irb/2020-38_IRB#NOT-2020-65, Notice 2021-11, and the Instructions for Form 941 or the Instructions for Form 944. For information about how to report the deferred amount of the employee share of social security tax on Form W-2 and Form W2c for 2020, see IRS.gov/FormW2 and the 2021 General Instructions for Forms W-2 and W-3 (available in early 2021). Notice 2021-11 modifies Notice 2020-65. No- TIP tice 2020-65 provides that the due date for the de- ferred amount of the employee share of social security tax is April 30, 2021. However, the COVID-related Tax Relief Act of 2020, enacted on December 27, 2020, defers the due date for the deferred amount of the employee share of social security tax to December 31, 2021. Therefore, Notice 2020-65 was modified by Notice 2021-11 to reflect the new due date. Substitute "December 31, 2021" for the due date of "April 30, 2021" provided • The CARES Act also allows employers to defer the deposit and payment of the employer share of social Page 2 Publication 15 (2021) in previously published instructions. Notice 2021-11 is expected to be published in Internal Revenue Bulletin 2021-06. Social security and Medicare tax for 2021. The rate of social security tax on taxable wages, except for qualified sick leave wages and qualified family leave wages, is 6.2% each for the employer and employee or 12.4% for both. Qualified sick leave wages and qualified family leave wages aren't subject to the employer share of social security tax; therefore, the tax rate on these wages is 6.2%. The social security wage base limit is $142,800. The Medicare tax rate is 1.45% each for the employee and employer, unchanged from 2020. There is no wage base limit for Medicare tax. Social security and Medicare taxes apply to the wages of household workers you pay $2,300 or more in cash wages for 2021. Social security and Medicare taxes apply to election workers who are paid $2,000 or more in cash or an equivalent form of compensation in 2021. New Form 1099-NEC. There is a new Form 1099-NEC to report nonemployee compensation paid in 2020. The 2020 Form 1099-NEC is due February 1, 2021. Disaster tax relief. Disaster tax relief is available for those impacted by disasters. For more information about disaster relief, go to IRS.gov/DisasterTaxRelief. New payroll tax credit for certain tax-exempt organizations affected by qualified disasters. Section 303(d) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 allows for a new payroll tax credit for certain tax-exempt organizations affected by certain qualified disasters. At the time this publication went to print, it was anticipated that the credit will be claimed on new Form 5884-D. Check IRS.gov to see if additional guidance is provided related to claiming this credit. Reminders 2021 withholding tables. The Percentage Method and Wage Bracket Method withholding tables, the employer instructions on how to figure employee withholding, and the amount to add to a nonresident alien employee's wages for figuring income tax withholding are included in Pub. 15-T, Federal Income Tax Withholding Methods, available at IRS.gov/Pub15T. You may also use the Income Tax Withholding Assistant for Employers at IRS.gov/ITWA to help you figure federal income tax withholding. Moving expense reimbursement. P.L. 115-97 suspends the exclusion for qualified moving expense reimbursements from your employee's income for tax years beginning after 2017 and before 2026. However, the exclusion is still available in the case of a member of the U.S. Armed Forces on active duty who moves because of a permanent change of station due to a military order. The exclusion applies only to reimbursement of moving expenses that the member could deduct if he or she had paid or incurred them without reimbursement. See Moving Expenses in Pub. 3, Armed Forces' Tax Guide, for the Publication 15 (2021) definition of what constitutes a permanent change of station and to learn which moving expenses are deductible. Withholding on supplemental wages. P.L. 115-97 lowered the withholding rates on supplemental wages for tax years beginning after 2017 and before 2026. See section 7 for the withholding rates. Backup withholding. P.L. 115-97 lowered the backup withholding rate to 24% for tax years beginning after 2017 and before 2026. For more information on backup withholding, see Backup withholding, later. Qualified small business payroll tax credit for increasing research activities. For tax years beginning after 2015, a qualified small business may elect to claim up to $250,000 of its credit for increasing research activities as a payroll tax credit against the employer share of social security tax. The payroll tax credit election must be made on or before the due date of the originally filed income tax return (including extensions). The portion of the credit used against the employer share of social security tax is allowed in the first calendar quarter beginning after the date that the qualified small business filed its income tax return. The election and determination of the credit amount that will be used against the employer share of social security tax are made on Form 6765, Credit for Increasing Research Activities. The amount from Form 6765, line 44, must then be reported on Form 8974, Qualified Small Business Payroll Tax Credit for Increasing Research Activities. Form 8974 is used to determine the amount of the credit that can be used in the current quarter. The amount from Form 8974, line 12, is reported on Form 941 or Form 944. For more information about the payroll tax credit, see Notice 2017-23, 2017-16 I.R.B. IRS.gov/irb/ 1100, available at 2017-16_IRB#NOT-2017-23, and IRS.gov/ ResearchPayrollTC. Also see the line 16 instructions in the Instructions for Form 941 (line 13 instructions in the Instructions for Form 944). Certification program for professional employer organizations (PEOs). The Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 required the IRS to establish a voluntary certification program for PEOs. PEOs handle various payroll administration and tax reporting responsibilities for their business clients and are typically paid a fee based on payroll costs. To become and remain certified under the certification program, certified professional employer organizations (CPEOs) must meet various requirements described in sections 3511 and 7705 and related published guidance. Certification as a CPEO may affect the employment tax liabilities of both the CPEO and its customers. A CPEO is generally treated for employment tax purposes as the employer of any individual who performs services for a customer of the CPEO and is covered by a contract described in section 7705(e)(2) between the CPEO and the customer (CPEO contract), but only for wages and other compensation paid to the individual by the CPEO. To become a CPEO, the organization must apply through the IRS Online Registration System. For more information or to apply to become a CPEO, go to IRS.gov/CPEO. Also see Revenue Procedure 2017-14, 2017-3 I.R.B. 426, available at IRS.gov/irb/ 2017-03_IRB#RP-2017-14. Page 3 Outsourcing payroll duties. Generally, as an employer, you’re responsible to ensure that tax returns are filed and deposits and payments are made, even if you contract with a third party to perform these acts. You remain responsible if the third party fails to perform any required action. Before 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, go to IRS.gov/ OutsourcingPayrollDuties for helpful information on this topic. If a CPEO pays wages and other compensation to an individual performing services for you, and the services are covered by a contract described in section 7705(e)(2) between you and the CPEO (CPEO contract), then the CPEO is generally treated as the employer, but only for wages and other compensation paid to the individual by the CPEO. However, with respect to certain employees covered by a CPEO contract, you may also be treated as an employer of the employees and, consequently, may also be liable for federal employment taxes imposed on wages and other compensation paid by the CPEO to such employees. For more information on the different types of third-party payer arrangements, see section 16. Aggregate Form 941 filers. Approved section 3504 agents and CPEOs must complete Schedule R (Form 941), Allocation Schedule for Aggregate Form 941 Filers, when filing an aggregate Form 941. Aggregate Forms 941 are filed by agents approved by the IRS under section 3504 of the Internal Revenue Code. To request approval to act as an agent for an employer, the agent files Form 2678 with the IRS. Aggregate Forms 941 are also filed by CPEOs approved by the IRS under section 7705. CPEOs file Form 8973, Certified Professional Employer Organization/Customer Reporting Agreement, to notify the IRS that they’ve started or ended a service contract with a client or customer. Other third-party payers that file aggregate Forms 941, such as non-certified PEOs, must complete and file Schedule R (Form 941) if they have clients that are claiming the qualified small business payroll tax credit for increasing research activities, the credit for qualified sick and family leave wages, or the employee retention credit, or clients that deferred the employer or employee share of social security tax. Aggregate Form 940 filers. Approved section 3504 agents and CPEOs must complete Schedule R (Form 940), Allocation Schedule for Aggregate Form 940 Filers, when filing an aggregate Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. Aggregate Forms 940 can be filed by agents acting on behalf of home care service recipients who receive home care services through a program administered by a federal, state, or local government. To request approval to act as an agent on behalf of home care service recipients, the agent files Form 2678 with the IRS. Aggregate Forms 940 are also filed by CPEOs approved by the IRS under section 7705. CPEOs file Form 8973 to notify the IRS that they’ve started or ended a service contract with a client or customer. Page 4 Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans. Qualified tax-exempt organizations that hire eligible unemployed veterans may be able to claim the work opportunity tax credit against their payroll tax liability using Form 5884-C. For more information, go to IRS.gov/WOTC. Medicaid waiver payments. Notice 2014-7 provides that certain Medicaid waiver payments are excludable from income for federal income tax purposes. See Notice 2014-7, 2014-4 I.R.B. 445, available at IRS.gov/irb/ 2014-04_IRB#NOT-2014-7. For more information, including questions and answers related to Notice 2014-7, go to IRS.gov/MedicaidWaiverPayments. No federal income tax withholding on disability payments for injuries incurred as a direct result of a terrorist attack directed against the United States. Disability payments for injuries incurred as a direct result of a terrorist attack directed against the United States (or its allies) aren't included in income. Because federal income tax withholding is only required when a payment is includible in income, no federal income tax should be withheld from these payments. See Pub. 907, Tax Highlights for Persons With Disabilities. Voluntary withholding on dividends and other distributions by an Alaska Native Corporation (ANC). A shareholder of an ANC may request voluntary income tax withholding on dividends and other distributions paid by an ANC. A shareholder may request voluntary withholding by giving the ANC a completed Form W-4V. For more information, see Notice 2013-77, 2013-50 I.R.B. 632, available at IRS.gov/irb/2013-50_IRB#NOT-2013-77. Definition of marriage. A marriage of two individuals is recognized for federal tax purposes if the marriage is recognized by the state, possession, or territory of the United States in which the marriage is entered into, regardless of legal residence. Two individuals who enter into a relationship that is denominated as marriage under the laws of a foreign jurisdiction are recognized as married for federal tax purposes if the relationship would be recognized as marriage under the laws of at least one state, possession, or territory of the United States, regardless of legal residence. Individuals who have entered into a registered domestic partnership, civil union, or other similar relationship that isn't denominated as a marriage under the law of the state, possession, or territory of the United States where such relationship was entered into aren't lawfully married for federal tax purposes, regardless of legal residence. Severance payments. Severance payments are wages subject to social security and Medicare taxes, income tax withholding, and FUTA tax. You must receive written notice from the IRS to file Form 944. If you’ve been filing Forms 941 (or Forms 941-SS, Employer's QUARTERLY Federal Tax Return—American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands, or Formularios 941-PR, Planilla para la Declaración Federal TRIMESTRAL del Patrono), and believe your employment taxes for the calendar year will be $1,000 or less, and you would like to file Form 944 instead of Forms 941, you must contact the IRS during the first calendar quarter of the tax Publication 15 (2021) year to request to file Form 944. You must receive written notice from the IRS to file Form 944 instead of Forms 941 before you may file this form. For more information on requesting to file Form 944, including the methods and deadlines for making a request, see the Instructions for Form 944. Employers can request to file Forms 941 instead of Form 944. If you received notice from the IRS to file Form 944 but would like to file Forms 941 instead, you must contact the IRS during the first calendar quarter of the tax year to request to file Forms 941. You must receive written notice from the IRS to file Forms 941 instead of Form 944 before you may file these forms. For more information on requesting to file Forms 941, including the methods and deadlines for making a request, see the Instructions for Form 944. Correcting Form 941 or 944. If you discover an error on a previously filed Form 941, make the correction using Form 941-X. If you discover an error on a previously filed Form 944, make the correction using Form 944-X. Forms 941-X and 944-X are filed separately from Forms 941 and 944. Forms 941-X and 944-X are used by employers to claim refunds or abatements of employment taxes, rather than Form 843. See section 13 for more information. Zero wage return. If you haven't filed a “final” Form 940 and "final" Form 941 or 944, or aren't a “seasonal” employer (Form 941 only), you must continue to file a Form 940 and Form 941 or 944, even for periods during which you paid no wages. The IRS encourages you to file your “zero wage” Form 940 and Form 941 or 944 electronically. Go to IRS.gov/EmploymentEfile for more information on electronic filing. Federal tax deposits must be made by electronic funds transfer (EFT). You must use EFT to make all federal tax deposits. Generally, an EFT is made using the Electronic Federal Tax Payment System (EFTPS). If you don't 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 the 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 11. To get more information about EFTPS or to enroll in EFTPS, go to EFTPS.gov, or call 800-555-4477 or 800-733-4829 (TDD). Additional information about EFTPS is also available in Pub. 966. Pub. 5146 explains employment tax examinations and appeal rights. Pub. 5146 provides employers with information on how the IRS selects employment tax returns to be examined, what happens during an exam, and what options an employer has in responding to the results of an exam, including how to appeal the results. Pub. 5146 also includes information on worker classification issues and tip exams. Publication 15 (2021) Electronic Filing and Payment Businesses can enjoy the benefits of filing and paying their federal taxes electronically. Whether you rely on a tax professional or handle your own taxes, the IRS offers you convenient programs to make filing and payment easier. Spend less time worrying about taxes and more time running your business. Use e-file and EFTPS to your benefit. • For e-file, go to IRS.gov/EmploymentEfile for additional information. A fee may be charged to file electronically. • For EFTPS, go to EFTPS.gov or call EFTPS Customer Service at 800-555-4477 or 800-733-4829 (TDD). • For electronic filing of Forms W-2, Wage and Tax Statement, go to SSA.gov/employer. You may be required to file Forms W-2 electronically. For details, see the General Instructions for Forms W-2 and W-3. If you’re filing your tax return or paying your federal taxes electronically, a valid EIN is required at CAUTION the time the return is filed or the payment is made. If a valid EIN isn't provided, the return or payment won't be processed. This may result in penalties. See section 1 for information about applying for an EIN. ! Electronic funds withdrawal (EFW). If you file your employment tax return electronically, you can e-file and use EFW to pay the balance due in a single step using tax preparation software or through a tax professional. However, don't use EFW to make federal tax deposits. For more information on paying your taxes using EFW, go to IRS.gov/EFW. Credit or debit card payments. You can pay the balance due shown on your employment tax return by credit or debit card. Your payment will be processed by a payment processor who will charge a processing fee. Don't use a credit or debit card to make federal tax deposits. For more information on paying your taxes with a credit or debit card, go to IRS.gov/PayByCard. Online payment agreement. You may be eligible to apply for an installment agreement online if you can’t pay the full amount of tax you owe when you file your employment tax return. For more information, see the instructions for your employment tax return or go to IRS.gov/OPA. Forms in Spanish You can provide Formulario W-4(SP), Certificado de Retenciones del Empleado, in place of Form W-4, Employee's Withholding Certificate, to your Spanish-speaking employees. For more information, see Pub. 17(SP), El Impuesto Federal sobre los Ingresos (Para Personas Físicas). For nonemployees, such as independent contractors, Formulario W-9(SP), Solicitud y Certificación del Número de Identificación del Contribuyente, may be used in place of Form W-9, Page 5 Request for Certification. Taxpayer Identification Number and Hiring New Employees Eligibility for employment. You must verify that each new employee is legally eligible to work in the United States. This includes completing the U.S. Citizenship and Immigration Services (USCIS) Form I-9, Employment Eligibility Verification. You can get Form I-9 at USCIS.gov/ Forms. For more information, visit the USCIS website at USCIS.gov/I-9-Central or call 800-375-5283 or 800-767-1833 (TTY). You may use the Social Security Number Verification Service (SSNVS) at SSA.gov/employer/ssnv.htm to verify that an employee name matches an SSN. A person may have a valid SSN but not be authorized to work in the United States. You may use E-Verify at e-verify.gov to confirm the employment eligibility of newly hired employees. New hire reporting. You’re required to report any new employee to a designated state new hire registry. A new employee is an employee who hasn't previously been employed by you or was previously employed by you but has been separated from such prior employment for at least 60 consecutive days. Many states accept a copy of Form W-4 with employer information added. Visit the Office of Child Support Enforcement website at acf.hhs.gov/programs/css/ employers for more information. W-4 request. Ask each new employee to complete the 2021 Form W-4. See section 9. Name and social security number (SSN). Record each new employee's name and SSN from his or her social security card. Any employee without a social security card should apply for one. See section 4. answer questions about reporting on Forms W-2, W-3, 1099, and other information returns. If you have questions related to reporting on information returns, call 866-455-7438 (toll free), 304-263-8700 (toll call), or 304-579-4827 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability). The center can also be reached by email at [email protected] Don't include tax identification numbers (TINs) or attachments in email correspondence because electronic mail isn't secure. Federal Income Tax Withholding Withhold federal income tax from each wage payment or supplemental unemployment compensation plan benefit payment according to the employee's Form W-4 and the correct withholding table in Pub. 15-T. If you're paying supplemental wages to an employee, see section 7. If you have nonresident alien employees, see Withholding income taxes on the wages of nonresident alien employees in section 9. See section 8 of Pub. 15-A, Employer’s Supplemental Tax Guide, for information about withholding on pensions (including distributions from tax-favored retirement plans), annuities, and individual retirement arrangements (IRAs). Information Returns You must file Forms W-2 to report wages paid to employees. You may also be required to file information returns to report certain types of payments made during the year. For example, you must file Form 1099-NEC, Nonemployee Compensation, to report payments of $600 or more to persons not treated as employees (for example, independent contractors) for services performed for your trade or business. For details about filing Forms 1099 and for information about required electronic filing, see the General Instructions for Certain Information Returns for general information, and the separate, specific instructions for each information return you file (for example, the Instructions for Forms 1099-MISC and 1099-NEC). Generally, don't use Forms 1099 to report wages and other compensation you paid to employees; report these on Form W-2. See the General Instructions for Forms W-2 and W-3 for details about filing Form W-2 and for information about required electronic filing. Information reporting customer service site. The IRS operates an information return customer service site to Page 6 Publication 15 (2021) Nonpayroll Income Tax Withholding Nonpayroll federal income tax withholding (reported on Forms 1099 and Form W-2G, Certain Gambling Winnings) must be reported on Form 945, Annual Return of Withheld Federal Income Tax. Separate deposits are required for payroll (Form 941 or Form 944) and nonpayroll (Form 945) withholding. Nonpayroll items include the following. • Pensions (including distributions from tax-favored retirement plans, for example, section 401(k), section 403(b), and governmental section 457(b) plans), annuities, and IRA distributions. • • • • Military retirement. Gambling winnings. Indian gaming profits. Certain government payments on which the recipient elected voluntary income tax withholding. • Dividends and other distributions by an ANC on which the recipient elected voluntary income tax withholding. • Payments subject to backup withholding. For details on depositing and reporting nonpayroll income tax withholding, see the Instructions for Form 945. Distributions from nonqualified pension plans and deferred compensation plans. Because distributions to participants from some nonqualified pension plans and deferred compensation plans (including section 457(b) plans of tax-exempt organizations) are treated as wages and are reported on Form W-2, income tax withheld must be reported on Form 941 or Form 944, not on Form 945. However, distributions from such plans to a beneficiary or estate of a deceased employee aren't wages and are reported on Forms 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.; income tax withheld must be reported on Form 945. Backup withholding. You must generally withhold 24% of certain taxable payments if the payee fails to furnish you with his or her correct taxpayer identification number (TIN). This withholding is referred to as “backup withholding.” Payments subject to backup withholding include interest, dividends, patronage dividends, rents, royalties, commissions, nonemployee compensation, payments made in settlement of payment card or third-party network transactions, and certain other payments you make in the course of your trade or business. In addition, transactions by brokers and barter exchanges and certain payments made by fishing boat operators are subject to backup withholding. Employer Responsibilities Employer Responsibilities: The following list provides a brief summary of your basic responsibilities. Because the individual circumstances for each employer can vary greatly, responsibilities for withholding, depositing, and reporting employment taxes can differ. Each item in this list has a page reference to a more detailed discussion in this publication. New Employees: Page Verify work eligibility of new employees . . . . . . . 6 Record employees' names and SSNs from social security cards . . . . . . . . . . . . . . . . . . . . 6 Ask employees for Form W-4 . . . . . . . . . . . . . . 6 Each Payday: Withhold federal income tax based on each employee's Form W-4 . . . . . . . . . . . . . . . . . . . 22 Withhold employee's share of social security and Medicare taxes . . . . . . . . . . . . . . . . . . . . 25 Deposit: • Withheld income tax • Withheld and employer social security taxes • Withheld and employer Medicare taxes . . . . . 27 Note: Due date of deposit generally depends on your deposit schedule (monthly or semiweekly). Quarterly (By April 30, July 31, October 31, and January 31): Deposit FUTA tax if undeposited amount is over $500 . . . . . . . . . . . . . . . . . . . . . . . . . . 39 File Form 941 (pay tax with return if not required to deposit) . . . . . . . . . . . . . . . . . . . . . 33 Publication 15 (2021) Annually (see Calendar for due dates): Page File Form 944 if required (pay tax with return if not required to deposit) . . . . . . . . . . . . . . . . . . . . . 33 Remind employees to submit a new Form W-4 if they need to change their withholding . . . . . . . . . . 22 Ask for a new Form W-4 from employees claiming exemption from income tax withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Reconcile Forms 941 (or Form 944) with Forms W-2 and W-3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Furnish each employee a Form W-2 . . . . . . . . . . . . 10 File Copy A of Forms W-2 and the transmittal Form W-3 with the SSA . . . . . . . . . . . . . . . . . . . . . 10 Furnish each other payee a Form 1099 (for example, Form 1099-NEC) . . . . . . . . . . . . . . . . . . . . . . . . . 10 File Forms 1099 and the transmittal Form 1096 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 10 File Form 940 . . . . . . . . . . . . . . . . . . . . . . . . . . . . File Form 945 for any nonpayroll income tax withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Page 7 Backup withholding doesn't apply to wages, pensions, annuities, IRAs (including simplified emCAUTION ployee pension (SEP) and SIMPLE retirement plans), section 404(k) distributions from an employee stock ownership plan (ESOP), medical savings accounts (MSAs), health savings accounts (HSAs), long-term-care benefits, or real estate transactions. ! • Documentation to substantiate the amount of any employer or employee share of social security tax that you deferred and paid. Change of Business Name You can use Form W-9 or Formulario W-9(SP) to request payees to furnish a TIN. Form W-9 or Formulario W-9(SP) must be used when payees must certify that the number furnished is correct, or when payees must certify that they’re not subject to backup withholding or are exempt from backup withholding. The Instructions for the Requester of Form W-9 or Formulario W-9(SP) includes a list of types of payees who are exempt from backup withholding. For more information, see Pub. 1281, Backup Withholding for Missing and Incorrect Name/TIN(s). Notify the IRS immediately if you change your business name. Write to the IRS office where you file your returns, using the Without a payment address provided in the instructions for your employment tax return, to notify the IRS of any business name change. See Pub. 1635 to see if you need to apply for a new EIN. Recordkeeping Notify the IRS immediately if you change your business address or responsible party. Complete and mail Form 8822-B to notify the IRS of a business address or responsible party change. For a definition of “responsible party,” see the Instructions for Form SS-4. Keep all records of employment taxes for at least 4 years. These should be available for IRS review. Your records should include the following information. • Your EIN. • Amounts and dates of all wage, annuity, and pension payments. Change of Business Address or Responsible Party Filing Addresses • Any employee copies of Forms W-2 and W-2c Generally, your filing address for Form 940, 941, 943, 944, 945, or CT-1 depends on the location of your residence or principal place of business and whether or not you’re including a payment with your return. There are separate filing addresses for these returns if you’re a tax-exempt organization or government entity. See the separate instructions for Form 940, 941, 943, 944, 945, or CT-1 for the filing addresses. • Dates of employment for each employee. • Periods for which employees and recipients were paid Private Delivery Services • • • • Amounts of tips reported to you by your employees. Records of allocated tips. The fair market value of in-kind wages paid. Names, addresses, SSNs, and occupations of employees and recipients. returned to you as undeliverable. while absent due to sickness or injury and the amount and weekly rate of payments you or third-party payers made to them. • Copies of employees' and recipients' income tax withholding certificates (Forms W-4, W-4P, W-4(SP), W-4S, and W-4V). • Dates and amounts of tax deposits you made and acknowledgment numbers for deposits made by EFTPS. • Copies of returns filed and confirmation numbers. • Records of fringe benefits and expense reimbursements provided to your employees, including substantiation. • Documentation to substantiate any credits claimed. You can use certain private delivery services (PDSs) designated by the IRS to meet the “timely mailing as timely filing” rule for tax returns. Go to IRS.gov/PDS for the current list of PDSs. The PDS can tell you how to get written proof of the mailing date. For the IRS mailing address to use if you're using a PDS, go to IRS.gov/PDSstreetAddresses. Select the mailing address listed on the webpage that is in the same state as the address to which you would mail returns filed without a payment, as shown in the instructions for your employment tax return. ! CAUTION PDSs can't 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. For more information on substantiation requirements, go to IRS.gov/PLC and IRS.gov/ERC. Page 8 Publication 15 (2021) 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. E-News for Payroll Professionals The IRS has a subscription-based email service for payroll professionals. Subscribers will receive periodic updates from the IRS. The updates may include information regarding recent legislative changes affecting federal payroll reporting, IRS news releases and special announcements pertaining to the payroll industry, new employment tax procedures, and other information specifically affecting federal payroll tax returns. To subscribe, go to IRS.gov/ENewsPayroll. Telephone Help Tax questions. You can call the IRS Business and Specialty Tax Line with your employment tax questions at 800-829-4933. Help for people with disabilities. You may call 800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability) with any employment tax questions. You may also use this number for assistance with unresolved tax problems. Additional information. Go to IRS.gov/ EmploymentTaxes for additional employment tax information. For information about employer responsibilities under the Affordable Care Act, go to IRS.gov/ACA. For information about COVID-19 tax relief, go to IRS.gov/ Coronavirus. Ordering Employer Tax Forms, Instructions, and Publications You can view, download, or print most of the forms, instructions, and publications you may need at IRS.gov/ Forms. Otherwise, you can go to IRS.gov/OrderForms to place an order and have them mailed to you. The IRS will process your order as soon as possible. Don't resubmit requests you've already sent us. You can get forms, instructions, and publications faster online. Instead of ordering paper Forms W-2 and W-3, consider filing them electronically using the SSA's free e-file service. Visit the SSA's Employer W-2 Filing Instructions & Information webpage at SSA.gov/employer to register for Business Services Online. You’ll be able to Publication 15 (2021) create Forms W-2 online and submit them to the SSA by typing your wage information into easy-to-use fill-in fields. In addition, you can print out completed copies of Forms W-2 to file with state or local governments, distribute to your employees, and keep for your records. Form W-3 will be created for you based on your Forms W-2. Photographs of Missing Children The IRS is a proud partner with the National Center for Missing & Exploited Children® (NCMEC). 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 The following is a list of important dates and responsibilities. The dates listed here haven’t been adjusted for Saturdays, Sundays, and legal holidays (see the TIP next). Pub. 509, Tax Calendars (for use in 2021), adjusts the dates for Saturdays, Sundays, and legal holidays. See section 11 for information about depositing taxes reported on Forms 941, 944, and 945. See section 14 for information about depositing FUTA tax. Due dates for forms required for health coverage reporting aren't listed here. For these dates, see Pub. 509. If any date shown next for filing a return, furnish- TIP ing a form, or depositing taxes falls on a Saturday, Sunday, or legal holiday, the due date is the next business day. The term "legal holiday" means any legal holiday in the District of Columbia. A statewide legal holiday delays a filing due date only if the IRS office where you’re required to file is located in that state. However, a statewide legal holiday doesn't delay the due date of federal tax deposits. See Deposits Due on Business Days Only in section 11. For any filing due date, you’ll 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 PDS on or before the due date. See Private Delivery Services under Reminders, earlier, for more information. Fiscal year taxpayers. The due dates listed next apply whether you use a calendar or a fiscal year. By January 31 File Form 941 or Form 944. File Form 941 for the fourth quarter of the previous calendar year and deposit any undeposited income, social security, and Medicare taxes. You may pay these taxes with Form 941 if your total tax liability for the quarter (Form 941, line 12) is less than $2,500. File Form 944 for the previous calendar Page 9 year instead of Form 941 if the IRS has notified you in writing to file Form 944. Pay any undeposited income, social security, and Medicare taxes with your Form 944. You may pay these taxes with Form 944 if your total tax liability for the year (Form 944, line 9) is less than $2,500. For additional rules on when you can pay your taxes with your return, see Payment with return in section 11. If you timely deposited all taxes when due, you may file by February 10. File Form 940. File Form 940 to report any FUTA tax. However, if you deposited all of the FUTA tax when due, you may file by February 10. See section 14 for more information on FUTA tax. Furnish Forms 1099 and W-2. Furnish each employee a completed 2020 Form W-2. Furnish a 2020 Form 1099-NEC to payees for nonemployee compensation. Most Forms 1099 must be furnished to payees by January 31, but some can be furnished by February 15. For more information, see the Guide to Information Returns chart in the General Instructions for Certain Information Returns. File Form W-2. File with the SSA Copy A of all 2020 paper and electronic Forms W-2 with Form W-3, Transmittal of Wage and Tax Statements. For more information on reporting Form W-2 information to the SSA electronically, visit the SSA’s Employer W-2 Filing Instructions & Information webpage at SSA.gov/ employer. If filing electronically, via the SSA's Form W-2 Online service, the SSA will generate Form W-3 data from the electronic submission of Form(s) W-2. File Form 1099-NEC reporting nonemployee compensation. File with the IRS Copy A of all 2020 paper and electronic Forms 1099-NEC with Form 1096, Annual Summary and Transmittal of U.S. Information Returns. For information on filing information returns electronically with the IRS, see Pub. 1220, Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G. File Form 945. File Form 945 to report any nonpayroll federal income tax withheld. If you deposited all taxes when due, you may file by February 10. See Nonpayroll Income Tax Withholding under Reminders, earlier, for more information. By February 15 Request a new Form W-4 from exempt employees. Ask for a new Form W-4 from each employee who claimed exemption from income tax withholding last year. On February 16 Forms W-4 claiming exemption from withholding expire. Any Form W-4 claiming exemption from withholding for the previous year has now expired. Begin withholding for any employee who previously claimed exemption from withholding but hasn't given you a new Page 10 Form W-4 for the current year. If the employee doesn't give you a new Form W-4, withhold tax as if he or she had checked the box for Single or Married filing separately in Step 1(c) and made no entries in Step 2, Step 3, or Step 4 of the 2021 Form W-4. See section 9 for more information. If the employee gives you a new Form W-4 claiming exemption from withholding after February 15, you may apply the exemption to future wages, but don't refund taxes withheld while the exempt status wasn't in place. By February 28 File paper 2020 Forms 1099 and 1096. File Copy A of all paper 2020 Forms 1099, except Forms 1099-NEC, with Form 1096 with the IRS. For electronically filed returns, see By March 31, later. File paper Form 8027. File paper Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips, with the IRS. See section 6. For electronically filed returns, see By March 31 next. By March 31 File electronic 2020 Forms 1099 and 8027. File electronic 2020 Forms 1099, except Forms 1099-NEC, with the IRS. Also file electronic Form 8027 with the IRS. For information on filing information returns electronically with the IRS, see Pub. 1220 and Pub. 1239, Specifications for Electronic Filing of Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips. By April 30, July 31, October 31, and January 31 Deposit FUTA taxes. 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 14 for more information. File Form 941. File Form 941 and deposit any undeposited income, social security, and Medicare taxes. You may pay these taxes with Form 941 if your total tax liability for the quarter (Form 941, line 12) is less than $2,500. If you timely deposited all taxes when due, you may file by May 10, August 10, November 10, or February 10, respectively. Don't file Form 941 for these quarters if you have been notified to file Form 944 and you didn't request and receive written notice from the IRS to file quarterly Forms 941. Before December 1 New Forms W-4. Remind employees to submit a new Form W-4 if their filing status, other income, deductions, or credits have changed or will change for the next year. If you deferred the employer share of social se- TIP curity tax under the CARES Act, one-half is due by December 31, 2021, and the remainder is due Publication 15 (2021) by December 31, 2022. Any payments or deposits you make before December 31, 2021, are first applied against your payment due on December 31, 2021, and then applied against your payment due on December 31, 2022. If you deferred the employee share of social security taxes under Notice 2020-65, you must withhold and pay the deferred taxes ratably from wages paid between January 1, 2021, and December 31, 2021. Because both December 31, 2021, and December 31, 2022, are nonbusiness days, payments made on the next business day will be considered timely. For more information and payment instructions, see the Instructions for Form 941, or the Instructions for Form 944, IRS.gov/ETD, Notice 2020-65, and Notice 2021-11. For information about how to report the deferred amount of the employee share of social security tax on Form W-2 and Form W-2c for 2020, see IRS.gov/FormW2 and the 2021 General Instructions for Forms W-2 and W-3 (available in early 2021). Introduction This publication explains your tax responsibilities as an employer. It explains the requirements for withholding, depositing, reporting, paying, and correcting employment taxes. It explains the forms you must give to your employees, those your employees must give to you, and those you must send to the IRS and the SSA. References to “income tax” in this guide apply only to “federal” income tax. Contact your state or local tax department to determine their rules. When you pay your employees, you don't pay them all the money they earned. As their employer, you have the added responsibility of withholding taxes from their paychecks. The federal income tax and employees' share of social security and Medicare taxes that you withhold from your employees' paychecks are part of their wages that you pay to the U.S. Treasury instead of to your employees. Your employees trust that you pay the withheld taxes to the U.S. Treasury by making federal tax deposits. This is the reason that these withheld taxes are called trust fund taxes. If federal income, social security, or Medicare taxes that must be withheld aren't withheld or aren't deposited or paid to the U.S. Treasury, the trust fund recovery penalty may apply. See section 11 for more information. Additional employment tax information is available in Pubs. 15-A, 15-B, and 15-T. Pub. 15-A includes specialized information supplementing the basic employment tax information provided in this publication. Pub. 15-B, Employer's Tax Guide to Fringe Benefits, contains information about the employment tax treatment and valuation of various types of noncash compensation. Pub. 15-T includes the federal income tax withholding tables and instructions on how to use the tables. Most employers must withhold (except FUTA), deposit, report, and pay the following employment taxes. • Medicare tax. • FUTA tax. There are exceptions to these requirements. See section 15 for guidance. Railroad retirement taxes are explained in the Instructions for Form CT-1. Employment taxes for agricultural employers are explained in Pub. 51. If you have employees in the U.S. Virgin Islands, Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands, see Pub. 80. Comments and suggestions. We welcome your comments about this publication and your suggestions for future editions. You can send us comments through IRS.gov/ FormComments. Or you can write to: Internal Revenue Service Tax Forms and Publications 1111 Constitution Ave. NW, IR-6526 Washington, DC 20224 Although we can’t respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax forms, instructions, and publications. Do not send tax questions, tax returns, or payments to this address. Getting answers to your tax questions. If you have a tax question not answered by this publication, check IRS.gov and How To Get Tax Help at the end of this publication. Federal government employers. The information in this publication, including the rules for making federal tax deposits, applies to federal agencies. State and local government employers. Payments to employees for services in the employ of state and local government employers are generally subject to federal income tax withholding but not FUTA tax. Most elected and appointed public officials of state or local governments are employees under common law rules. See chapter 3 of Pub. 963, Federal-State Reference Guide. In addition, wages, with certain exceptions, are subject to social security and Medicare taxes. See section 15 for more information on the exceptions. If an election worker is employed in another capacity with the same government entity, see Revenue Ruling 2000-6 on page 512 of Internal Revenue Bulletin 2000-6 at IRS.gov/pub/irs-irbs/irb00-06.pdf. You can get information on reporting and social security coverage from your local IRS office. If you have any questions about coverage under a section 218 (Social Security Act) agreement, contact the appropriate state official. To find your State Social Security Administrator, visit the National Conference of State Social Security Administrators website at NCSSSA.org. • Income tax. • Social security tax. Indian tribal governments. See Pub. 4268 for employment tax information for Indian tribal governments. Publication 15 (2021) Page 11 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 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). 1. Employer Identification Number (EIN) If you’re required to report employment taxes or give tax statements to employees or annuitants, you need an EIN. The EIN is a nine-digit number 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 you send to the IRS and the SSA. For more information, see Pub. 1635. If you don’t have an EIN, you may apply for one online by visiting the IRS website at IRS.gov/EIN. You may also apply for an EIN by faxing or mailing Form SS-4 to the IRS. If the principal business was created or organized outside of the United States or U.S. territories, you may also apply for an EIN by calling 267-941-1099 (toll call). Don't use an SSN in place of an EIN. You should have only one EIN. If you have more than one and aren't sure which one to use, call 800-829-4933 or 800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability). Give the numbers you have, the name and address to which each was assigned, and the address of your main place of business. The IRS will tell you which number to use. For more information, see Pub. 1635. If you took over another employer's business (see Successor employer in section 9), don't use that employer's EIN. If you’ve applied for an EIN but don't have your EIN by the time a return is due, file a paper return and write “Applied For” and the date you applied for it in the space shown for the number. Always be sure the EIN on the form you file exactly matches the EIN the IRS assigned to your CAUTION business. Don't use your SSN or individual taxpayer identification number (ITIN) on forms that ask for an EIN. If you used an EIN (including a prior owner's EIN) on Form 941, or Form 944, that is different from the EIN reported on Form W-3, see Box h—Other EIN used this year in the General Instructions for Forms W-2 and W-3. The name and EIN on Form 945 must match the name and EIN on your information returns where federal income tax withholding is reported (for example, backup withholding reported on Form 1099-NEC). Filing a Form 945 with an incorrect EIN or using another business's EIN may result in penalties and delays in processing your return. ! Page 12 2. Who Are Employees? Generally, employees are defined either under common law or under statutes for certain situations. See Pub. 15-A for details on statutory employees and nonemployees. 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. See Pub. 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. Generally, people in business for themselves aren't employees. For example, doctors, lawyers, veterinarians, and others in an independent trade in which they offer their services to the public are usually not employees. If the business is incorporated, corporate officers who work in the business are employees of the corporation. If an employer-employee relationship exists, it doesn't matter what it is called. The employee may be called an agent or independent contractor. It also doesn't matter how payments are measured or paid, what they’re called, or if the employee works full or part time. Statutory employees. If someone who works for you isn't an employee under the common law rules discussed earlier, don't withhold federal income tax from his or her pay, unless backup withholding applies. Although the following persons may not be common law employees, they’re considered employees by statute for social security and Medicare tax purposes under certain conditions. • An agent or commission driver who delivers meat, vegetable, fruit, or bakery products; beverages (other than milk); laundry; or dry cleaning for someone else. • A full-time life insurance salesperson who sells primarily for one company. • A homeworker who works at home or off premises according to guidelines of the person for whom the work is done, with materials or goods furnished by and returned to that person or to someone that person designates. • A traveling or city salesperson (other than an agent or commission driver) who works full time (except for sideline sales activities) for one firm or person getting orders from customers. The orders must be for merchandise for resale or supplies for use in the customer's business. The customers must be retailers, wholesalers, contractors, or operators of hotels, restaurants, or other businesses dealing with food or lodging. For FUTA tax, an agent or commission driver and a traveling or city salesperson are considered statutory employees; however, a full-time life insurance salesperson and a homeworker aren't considered statutory employees. Publication 15 (2021) Statutory nonemployees. Direct sellers, qualified real estate agents, and certain companion sitters are, by law, considered nonemployees. They’re generally treated as self-employed for all federal tax purposes, including income and employment taxes. See Pub. 15-A for more information. H-2A agricultural workers. On Form W-2, don't check box 13 (Statutory employee), as H-2A workers aren't statutory employees. Treating employees as nonemployees. You’ll generally be liable for social security and Medicare taxes and withheld income tax if you don't deduct and withhold these taxes because you treated an employee as a nonemployee. You may be able to figure your liability using special section 3509 rates for the employee share of social security and Medicare taxes and federal income tax withholding. The applicable rates depend on whether you filed required Forms 1099. You can't recover the employee share of social security tax, Medicare tax, or income tax withholding from the employee if the tax is paid under section 3509. You’re liable for the income tax withholding regardless of whether the employee paid income tax on the wages. You continue to owe the full employer share of social security and Medicare taxes. The employee remains liable for the employee share of social security and Medicare taxes. See section 3509 for details. Also see the Instructions for Form 941-X or the Instructions for Form 944-X. Section 3509 rates aren't available if you intentionally disregard the requirement to withhold taxes from the employee or if you withheld income taxes but not social security or Medicare taxes. Section 3509 isn't available for reclassifying statutory employees. See Statutory employees, earlier. If the employer issued required information returns, the section 3509 rates are the following. • For social security taxes: employer rate of 6.2% plus 20% of the employee rate of 6.2%, for a total rate of 7.44% of wages. • For Medicare taxes: employer rate of 1.45% plus 20% of the employee rate of 1.45%, for a total rate of 1.74% of wages. • For Additional Medicare Tax: 0.18% (20% of the employee rate of 0.9%) of wages subject to Additional Medicare Tax. • For federal income tax withholding, the rate is 1.5% of wages. If the employer didn't issue required information returns, the section 3509 rates are the following. • For social security taxes: employer rate of 6.2% plus 40% of the employee rate of 6.2%, for a total rate of 8.68% of wages. • For Medicare taxes: employer rate of 1.45% plus 40% of the employee rate of 1.45%, for a total rate of 2.03% of wages. Publication 15 (2021) • For Additional Medicare Tax: 0.36% (40% of the employee rate of 0.9%) of wages subject to Additional Medicare Tax. • For federal income tax withholding, the rate is 3.0% of wages. Relief provisions. If you have a reasonable basis for not treating a worker as an employee, you may be relieved from having to pay employment taxes for that worker. To get this relief, you must file all required federal tax returns, including information returns, on a basis consistent with your treatment of the worker. You (or your predecessor) must not have treated any worker holding a substantially similar position as an employee for any periods beginning after 1977. See Pub. 1976, Do You Qualify for Relief Under Section 530. IRS help. If you want the IRS to determine whether a worker is an employee, file Form SS-8. Voluntary Classification Settlement Program (VCSP). Employers who are currently treating their workers (or a class or group of workers) as independent contractors or other nonemployees and want to voluntarily reclassify their workers as employees for future tax periods may be eligible to participate in the VCSP if certain requirements are met. File Form 8952 to apply for the VCSP. For more information, go to IRS.gov/VCSP. Business Owned and Operated by Spouses If you and your spouse jointly own and operate a business and share in the profits and losses, you may be partners in a partnership, whether or not you have a formal partnership agreement. See Pub. 541 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. For tax years beginning after 2006, the Small Business and Work Opportunity Tax Act of 2007 (Public Law 110-28) provides that a “qualified joint venture,” whose only members are spouses filing a joint income tax return, can elect not to be treated as a partnership for federal tax purposes. A qualified joint venture conducts a trade or business where: • The only members of the joint venture are spouses who file a joint income tax return, • Both spouses materially participate (see Material par- ticipation in the instructions for Schedule C (Form 1040), line G) in the trade or business (mere joint ownership of property isn't enough), • Both spouses elect to not be treated as a partnership, and • The business is co-owned by both spouses and isn't held in the name of a state law entity such as a partner
2021 Publication 15
More about the Federal Publication 15 Corporate Income Tax TY 2020
Publication 15 (Circular E) is a yearly IRS publication containing hundreds or pages worth of tax information for employers and business owners.
We last updated the Employer's Tax Guide in February 2021, so this is the latest version of Publication 15, fully updated for tax year 2020. You can download or print current or past-year PDFs of Publication 15 directly from TaxFormFinder. You can print other Federal tax forms here.
Other Federal Corporate Income Tax Forms:
|Form Code||Form Name|
|Form 1095-B||Health Coverage|
|1120-S (Schedule K-1)||Shareholder’s Share of Income, Deductions, Credits, etc.|
|Form 9452||Filing Assistance Program|
|1041 (Schedule D)||Capital Gains and Losses|
|Form 1120-H||U.S. Income Tax Return for Homeowners Associations|
The Internal Revenue Service usually releases income tax forms for the current tax year between October and January, although changes to some forms can come even later. We last updated Federal Publication 15 from the Internal Revenue Service in February 2021.
About the Corporate Income Tax
The IRS and most states require corporations to file an income tax return, with the exact filing requirements depending on the type of company.
Sole proprietorships or disregarded entities like LLCs are filed on Schedule C (or the state equivalent) of the owner's personal income tax return, flow-through entities like S Corporations or Partnerships are generally required to file an informational return equivilent to the IRS Form 1120S or Form 1065, and full corporations must file the equivalent of federal Form 1120 (and, unlike flow-through corporations, are often subject to a corporate tax liability).
Additional forms are available for a wide variety of specific entities and transactions including fiduciaries, nonprofits, and companies involved in other specific types of business.
Historical Past-Year Versions of Federal Publication 15
We have a total of six past-year versions of Publication 15 in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:
2021 Publication 15
2019 Publication 15
2018 Publication 15
2017 Publication 15
2016 Publication 15
2015 Publication 15
While we do our best to keep our list of Federal Income Tax Forms up to date and complete, we cannot be held liable for errors or omissions. Is the form on this page out-of-date or not working? Please let us know and we will fix it ASAP.