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COBRA premium assistance credit extended. The credit for COBRA premium assistance payments has been extended. It now applies to premiums paid for employees terminated before March 1, 2010 and to premiums paid for 15 months. See COBRA premium assistance credit on page 7 of Publication 15 (Circular E) for 2010. You can get Circular E at www.irs.gov.
Employers can choose to file Form 941-SS instead of Form 944-SS for 2010. Beginning with tax year 2010, employers that would otherwise be required to file Form 944-SS can notify the IRS if they want to file quarterly Form 941-SS instead of annual Form 944-SS. See Revenue Procedure 2009-51 for more information.
FUTA tax rate for 2010. The 6.2% FUTA tax rate has been extended through the first six months of calendar year 2011.
Social security and Medicare taxes for 2010. Do not withhold social security tax after an employee reaches $106,800 in social security wages, which remains unchanged from 2009. There is no limit on the amount of wages subject to Medicare tax. Social security and Medicare taxes apply to the wages of household workers you pay $1,700 or more in cash. Social security and Medicare taxes apply to election workers who are paid $1,500 or more.
Verifying social security numbers. Starting in fall 2009, the Social Security Administration (SSA) will no longer manually verify Social Security numbers (SSNs) over the telephone. SSA now offers an automated telephone service, Telephone Number Employer Verification (TNEV), that lets employers and authorized reporting agents verify up to 10 employee names and SSNs. For more information, see section 3, Employee's Social Security Number (SSN) for details.
Change of address. If you changed your business mailing address or business location, notify the IRS by filing Form 8822, Change of Address. Do not mail Form 8822 with your employment tax return.
Commonwealth of the Northern Mariana Islands (CNMI) income taxes. The U.S. Treasury Department and the (CNMI) Division of Revenue and Taxation entered into a new agreement under 5 USC 5517 in December 2006. Under this agreement, all federal employers with personnel resident in CNMI (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. 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.
Credit card and debit card payments. You can use your American Express® Card, Discover® Card, MasterCard®, Visa® card or debit card to pay the balance due shown on Form 944-SS, Forms 941-SS, Form 943, or Form 940. To pay by credit card or debit card, call toll-free or visit the website of any service provider listed below and follow the instructions. A convenience fee will be charged by the service provider based on the amount you are paying. Fees vary between the providers. You will be told what the fee is during the transaction and you will have the option to either continue or cancel the transaction. You can also find out what the fee will be by calling the provider’s toll-free automated customer service number or by visiting the provider’s website shown below. You may not use a credit card or debit card to pay taxes that are required to be deposited.
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 from your bank account while e-filing. Visit the IRS website at www.irs.gov for more information on filing electronically.
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.
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:
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 in accordance with section 8. Farm employers must keep a record of the name, permanent address, and EIN of each crew leader. See Farm Crew Leaders on page 5.
Reporting discrepancies between Forms 941-SS or Forms 944-SS and Forms W-2. Use Schedule D (Form 941) to explain certain wage, tax, and payment discrepancies between Forms 941-SS (or Forms 944-SS), and Forms W-2 that were caused by acquisitions, statutory mergers, or consolidations. For more information, get the Instructions for Schedule D (Form 941).
Web-based application for an EIN. You can apply for an employer identification number (EIN) online by visiting the IRS website at www.irs.gov/smallbiz.
Contacting your Taxpayer Advocate. The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should.You can contact TAS by calling toll-free 1-877-777-4778 (U.S. Virgin Islands only) or TTY/TTD 1-800-829-4059 to see if you are eligible for assistance. You can also call or write to your local taxpayer advocate, whose phone number and address are listed in your local telephone directory and in Publication 1546, The Taxpayer Advocate Service, Your Voice at the IRS. You can file Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), or ask an IRS employee to complete it on your behalf. For more information, go to www.irs.gov/advocate.
Tax Help. You can call the IRS at 1-800-829-4933 (U.S. Virgin Islands only) or 215-516-2000 (toll call), for federal employment tax information, including assistance with completing Form 941-SS (or Form 944-SS). Call 1-800-829-4059 if you are a TTY/TDD user. All employers can get in-depth information about payroll tax topics by visiting the IRS website at www.irs.gov and clicking on the “Businesses” tab.For a complete listing of free IRS tax services, get Publication 910, IRS Guide To Free Tax Services. See How To Get Forms and Publications on page 4 for ordering information.
The following are important dates and responsibilities. Also see Publication 509, Tax Calendars.
By January 31.
By February 28. File wage and tax statements with the Social Security Administration (SSA). File Copy A of Forms W-2AS, W-2CM, W-2GU, or Form W-2VI, and Form W-3SS, Transmittal of Wage and Tax Statements, with the Social Security Administration (SSA). For electronically filed returns, see By March 31 below.
By March 31. File electronic Forms W-2AS, W-2CM, W-2GU, or Form W-2VI with the SSA. You cannot file electronically using W-2 Online; however, you can transmit an electronic file over the Internet through SSA's Business Service Online (BSO) upload feature. See Social Security's Employer Reporting Instructions and Information website at
www.ssa.gov/bso/bsowelcome.htm for more information.
By April 30, July 31, October 31, and January 31.
File Form 941-SS, Employer's QUARTERLY Federal Tax Return (American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands), with the Internal Revenue Service. 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 instructed to file Form 944-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. If any date shown above 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. For any due date, you will meet the “file” or “furnish” requirement if the form is properly addressed and mailed First-Class or sent by an IRS-designated delivery service on or before the due date. See Private delivery services on page 2.
This publication is for employers whose principal place of business is in the U.S. Virgin Islands, Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands, or who have employees who are subject to income tax withholding for any of these jurisdictions. Employers and employees in these areas are generally subject to social security and Medicare taxes under the Federal Insurance Contributions Act (FICA). This publication summarizes employer responsibilities to collect, pay, and report these taxes.
Whenever the term “United States” is used in this publication, it includes the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands.
This publication also provides employers in the U.S. Virgin Islands with a summary of their responsibilities in connection with the tax under the Federal Unemployment Tax Act, known as FUTA tax. See section 11.
Except as shown in the table in section 12, social security, Medicare, and FUTA taxes apply to every employer who pays taxable wages to employees or who has employees who report tips.
This publication does not include information relating to the self-employment tax (for social security and Medicare of self-employed persons). See Publication 570, Tax Guide for Individuals With Income From U.S. Possessions, if you need this information.
This publication also does not include information relating to income tax withholding. In the U.S. Virgin Islands, Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands, contact your local tax department for information about income tax withholding. See Publication 15 (Circular E), Employer's Tax Guide, for information on U.S. federal income tax withholding.
If you are an employer in the Commonwealth of the Northern Mariana Islands, contact the Division of Revenue and Taxation at 670-664-1000 to get Form W-2CM and the instructions for completing and filing that form.
U.S. Virgin Islands employers can order forms and publications 24 hours a day, 7 days a week, toll free, by calling 1-800-TAX-FORM (1-800-829-3676). Others may call 215-516-2000 (toll call).
Generally, employees are defined either under common law or under special statutes for certain situations.
There are also some special definitions of employees for social security, Medicare, and FUTA taxes. While the following persons may not be common law employees, they are considered employees for social security and Medicare purposes if the conditions under Tests below are met.
An agent (or commission) driver who delivers food or beverages (other than milk) or picks up and delivers laundry or dry cleaning for someone else.
A full-time life insurance salesperson who sells primarily for one company.
A homeworker who works by the guidelines of the person for whom the work is done, with materials furnished by and returned to that person or to someone that person designates.
A traveling or city salesperson (other than an agent-driver 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 items for resale or used as supplies 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.
Withhold social security and Medicare taxes from statutory employees' wages if all three of the following tests apply.
You are an employer of farmworkers if you are a crew leader. 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.
An employer identification number (EIN) is a nine-digit number that the IRS issues. Its format is 00-0000000. It is used to identify the tax accounts of employers and certain other organizations and entities that have no employees. Use your EIN on all of the items that you send to the IRS and SSA for your business.
If you do not have an EIN, request one on Form SS-4, Application for Employer Identification Number. Form SS-4 contains information on how to apply for an EIN by mail, fax, or telephone. You can also apply online at
www.irs.gov/smallbiz.
If you do not have an EIN by the time a return is due and you are filing a paper return, enter “Applied For” and the date that 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.
You should have only one EIN. If you have more than one, write to the IRS office where you file your returns using the “without a payment” address in the Instructions for Form 941-SS, Instructions for Form 944-SS, or Instructions for Form 943. Or call the IRS Business & Specialty Tax Line (toll free) at 1-800-829-4933 (U.S. Virgin Islands only) or 215-516-2000 (toll call). TTY/TDD users in the U.S. Virgin Islands may call 1-800-829-4059 (toll free). 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.
An employee's social security number (SSN) consists of nine digits separated as follows: 000-00-0000. You must get each employee's name and SSN and enter them on the employee's wage and tax statement, Form W-2AS, W-2CM, W-2GU, or Form W-2VI. If you do not report the employee's correct name and SSN, you may owe a penalty unless you have reasonable cause. See Publication 1586, Reasonable Cause Regulations and Requirements for Missing and Incorrect Name/TINs for information on the requirement to solicit the employee's SSN.
The SSA offers employers and authorized reporting agents three methods for verifying employee SSNs. Some verification methods require registration. For more information, call 1-800-772-6270.
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.
Generally, all wages are subject to social security and Medicare tax (and FUTA tax for U.S. Virgin Islands employers). However, wages subject to social security tax and FUTA tax are limited by a wage base amount that you pay to each employee for the year. The wage base for social security tax is $106,800 for 2010. After you pay $106,800 to an employee in 2010, including tips, do not withhold social security tax on any amount that you later pay to the employee for the year. The wage base for FUTA tax is $7,000 for 2010. All wages are subject to Medicare tax. The wages may be in cash or in other forms, such as an automobile for personal use. Wages include salaries, vacation allowances, bonuses, commissions, and fringe benefits. It does not matter how payments are measured or paid.
See the table in section 12 for exceptions to social security, Medicare, and FUTA taxes on wages. See sections 5 and 6 for a discussion of how the rules apply to tips and farmworkers.
Social security and Medicare taxes apply to most payments of sick pay, including payments by third parties such as insurance companies. Special rules apply to the reporting of third-party sick pay. For details, see Publication 15-A.
Determine the value of noncash pay (such as goods, lodging, and meals) by its fair market value. However, see Fringe Benefits below. Except for farmworkers and household employees, this kind of pay may be subject to social security, Medicare, and FUTA taxes.
Back pay, including retroactive wage increases (but not amounts paid as liquidated damages), is taxed as ordinary wages in the year paid. For information on reporting back pay to the Social Security Administration, see
Publication 957, Reporting Back Pay and Special Wage Payments to the Social Security Administration.
Generally, fringe benefits are includible in the gross income of an employee and are subject to employment taxes. Examples of fringe benefits include the use of an automobile, aircraft flights that you provide, free or discounted commercial airline flights, vacations, discounts on property or services, memberships in country clubs or other social clubs, and tickets to entertainment or sporting events. In general, the amount included in the employee's income is the excess of the fair market value of the benefit over the sum of any amount paid for it by the employee and any amount excluded by law. For more information, see Publication 15-B, Employer's Tax Guide to Fringe Benefits.
You can choose to treat taxable noncash fringe benefits (including personal use of an automobile provided by you) as paid by the pay period, quarter, or on any other basis that you choose, but they must be treated as paid at least annually. You do not have to make a formal choice of payment dates or notify the IRS. You do not have to use the same basis for all employees. You may change methods as often as you like, as long as all benefits provided in a calendar year are treated as paid no later than December 31 of the calendar year. However, see Special accounting rule for fringe benefits provided during November and December below. You can treat the value of a single taxable noncash fringe benefit as paid on one or more dates in the same calendar year, even if the employee gets the entire benefit at one time. However, once you elect the payment dates, you must report the taxes on your return in the same tax period in which you treated them as paid. This election does not apply to a fringe benefit where real property or investment personal property is transferred.
You add the value of fringe benefits to regular wages for a payroll period and figure social security and Medicare taxes on the total. If you withhold less than the required amount of social security and Medicare taxes from the employee in a calendar year but report and pay the proper amount, you may recover the taxes from the employee.
Once you choose payment dates for taxable noncash fringe benefits, you must deposit taxes in the same deposit period that you treat the fringe benefits as paid. You may make a reasonable estimate of the value of the fringe benefits. In general, the value of taxable noncash fringe benefits provided in a calendar year must be determined by January 31 of the following year. You may claim a refund of overpayments or elect to have any overpayment applied to the next employment tax return. If deposits are underpaid, see Deposit Penalties in section 8.
Tips that your employee receives are generally subject to social security and Medicare withholding. Your employee must report cash tips to you by the 10th of the month after the month that the tips are received. The report should include tips that you paid to the employee from charge receipts. Also include tips that the employee received directly from customers and other employees, and indirectly (for example, tip splitting). The report should not include tips that the employee paid out to other employees. No report is required for months when tips are less than $20. Your employees report tips on Form 4070, Employee's Report of Tips to Employer, or on a similar statement. They may also use Form 4070A, Employee's Daily Record of Tips, to keep a record of their tips. Both forms are printed in Publication 1244, Employee's Daily Record of Tips and Report of Tips to Employer, available from the IRS.
The statement must be signed by the employee and must show the following:
If, by the 10th of the month after the month you received an employee's report on tips, you do not have enough employee funds available to deduct the employee social security and Medicare tax, you no longer have to collect it.
The tests described below apply only to services that are defined as agricultural labor (farmwork). Farmworkers are your employees if they:
A “share farmer” working for you is not your employee. However, the share farmer may be subject to self-employment tax. In general, share farming is an arrangement in which certain commodity products are shared between the farmer and the owner (or tenant) of the land. For details, see Regulations section 31.3121(b)(16)-1.
All cash wages that you pay to any employee for farmwork are subject to social security and Medicare taxes if either of the following two tests is met.
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 even if you pay $2,500 or more in that year to all of your farmworkers if the farmworker:
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.
For wages paid in 2010, the social security tax rate is 6.2% and the Medicare tax rate is 1.45% for both the employer and the employee. Multiply each wage payment by these percentages to figure the tax to withhold from employees. For example, the social security tax on a wage payment of $355 would be $22.01 ($355 × .062) each. The Medicare tax would be $5.15 ($355 × .0145) each. Employers match these amounts and report both the employee and employer shares on Form 941-SS, 944-SS, or Form 943 (farm employment). See section 5 for information on tips.
Deduct the employee tax from each wage payment. If you are not sure that the wages that you pay to a farmworker during the year will be taxable, you may either deduct the tax when you make the payments or wait until the $2,500 test or the $150 test explained in section 6 has been met.
If you pay your employee's social security and Medicare taxes without deducting them from the employee's pay, you must include the amount of the payments in the employee's wages for social security and Medicare taxes. This increase in the employee's wage payment for your payment of the employee's social security and Medicare taxes is also subject to employee social security and Medicare taxes. This again increases the amount of the additional taxes that you must pay.
You must deposit social security and Medicare taxes if your tax liability (line 8 of Form 941-SS, line 7 of Form 944-SS, or line 11 of Form 943) is $2,500 or more for the tax return period. You make the deposits either electronically or with paper coupons. These methods are discussed later.
Employers who have been instructed to file Form 944-SS can pay their tax liability due for the fourth quarter with Form 944-SS, if their fourth quarter tax liability is less than $2,500. Employers must have deposited any tax liability due for the first, second, and third quarters, according to the deposit rules, in order to avoid failure-to-deposit penalties for deposits due during those quarters.
Only monthly schedule depositors 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.Under the rules discussed below, the only difference between farm and nonfarm workers' employment tax deposit rules is the lookback period. Therefore, farm and nonfarm workers are discussed together except where noted.
Depending on your total taxes reported during a lookback period (discussed below), you are 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 you pay your employees or how often you are required to make deposits. The terms identify which set of rules that you must follow when a tax liability arises (for example, when you have a payday).
You will need to determine your deposit schedule for a calendar year based on the total employment taxes reported on line 8 of Form 941-SS, line 8 of Form 941, or line 9 of Form 943 for your lookback period (defined below). If you filed both Forms 941-SS and 941 during the lookback period, combine the tax liabilities for these returns for purposes of determining your deposit schedule. Determine your deposit schedule for Form 943 separately from Forms 941-SS and 941.
The lookback period for Form 941-SS (or Form 941) consists of four quarters beginning July 1 of the second preceding year and ending June 30 of the prior year. These four quarters are your lookback period even if you did not report any taxes for any of the quarters. For 2010, the lookback period is July 1, 2008, through June 30, 2009.
The lookback period for Form 944-SS (or Form 944) is the second calendar year preceding the current calendar year. For example, the lookback period for calendar year 2010 is calendar year 2008. In addition, for employers who filed Form 944-SS (or Form 944) for 2008 or 2009 and will file Form 941-SS (or Form 941) for 2010, the lookback period for 2010 is the second calendar year preceding the current calendar year, that is, 2008.
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.
If your total tax reported for the lookback period is $50,000 or less, you are a monthly schedule depositor for the current year. You must deposit taxes on wage payments made during a calendar month by the 15th day of the following month.
Your tax liability for any quarter 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 calendar year of your business (but see the $100,000 Next-Day Deposit Rule on page 10).
If your total tax reported for the lookback period is more than $50,000, you are a semiweekly schedule depositor for the current year. If you are a semiweekly schedule depositor, you must deposit on Wednesday and/or Friday, depending on what day of the week that you make wage payments, as follows.
Semiweekly depositors are generally not required to deposit twice a week if their payments were in the same semiweekly period unless the $100,000 Next- Day Deposit Rule on page 10 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 on the following Wednesday. If you made no additional payments on Saturday through Tuesday, no deposit is due on Friday.
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.
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 on Wednesday, October 6, 2010 (three banking days from the end of the semiweekly deposit period).
| 2009 Lookback Period | |
|---|---|
| 3rd Quarter 2007 | $12,000 |
| 4th Quarter 2007 | 12,000 |
| 1st Quarter 2008 | 12,000 |
| 2nd Quarter 2008 | 12,000 |
| $48,000 |
| 2010 Lookback Period | |
|---|---|
| 3rd Quarter 2008 | $12,000 |
| 4th Quarter 2008 | 12,000 |
| 1st Quarter 2009 | 12,000 |
| 2nd Quarter 2009 | 15,000 |
| $51,000 |
If a deposit due date falls on a day that is not a banking day, the deposit is considered timely if it is made by the close of 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 a banking holiday, 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 at least 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 for payments made on Friday and the following Monday is a banking holiday, the deposit normally due on Wednesday may be made on Thursday (allowing 1 banking day to make the deposit).
The examples below illustrate the procedure for determining the deposit date under the two different deposit schedules.
Green, Inc. is a seasonal employer and a monthly schedule depositor. It pays wages each Friday. During January 2010, it paid wages but did not pay any wages during February. Green, Inc. must deposit the combined tax liabilities for the January paydays by February 16. Green, Inc. does not have a deposit requirement for February (that is, due by March 15) because no wages were paid in February and, therefore, it did not have a tax liability for February.
Blue Co., a semiweekly schedule depositor, pays wages on the last day of the month. Blue Co. will deposit only once a month because it pays wages only once a month, but the deposit will be made under the semiweekly deposit schedule as follows. Blue Co.'s tax liability for the February 26, 2010, (Friday) payday must be deposited by March 3, 2010 (Wednesday).
If you accumulate taxes of $100,000 or more on any day during a deposit period, you must deposit 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 taxes after the end of a deposit period. For example, if a semiweekly schedule depositor has accumulated taxes of $95,000 on Tuesday and $10,000 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 by Friday and $10,000 must be deposited by the following
Wednesday.
However, 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 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 normal semiweekly
deposit schedule).
Elm, Inc. started business on January 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 January 13, 2010, Elm, Inc. paid wages for the first time and accumulated taxes of $60,000. On January 15 (Friday), Elm, Inc. paid wages and accumulated taxes of $50,000, for a total of $110,000. Because Elm, Inc. accumulated $110,000 on January 15, it must deposit $110,000 by January 19 (Tuesday), the next banking day.
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.
Makeup date for deposit shortfall:
For example, if a semiweekly schedule depositor filing Form 941-SS has a deposit shortfall during June 2010, the shortfall makeup date is July 16, 2010 (Friday). However, if the shortfall occurred on the October 6 (Wednesday) deposit date for a September 29 pay date, the return due date for the September 29 pay date (November 1, 2010), would come before the November 17 (Wednesday) shortfall makeup date. In this case, the shortfall must be deposited by November 1.
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-SS or Form 944-SS taxes). Form 943 taxes and Form 941-SS (or Form 944-SS) taxes are not combined for purposes of applying any of the deposit rules.
If a deposit is due, deposit the Form 941-SS (or Form 944-SS) taxes and Form 943 taxes separately, as discussed below.
The two methods of depositing employment taxes are discussed next. See Payment with Return on page 8 for exceptions explaining when taxes may be paid with the tax return instead of being deposited.
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:
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. Be sure to tell your payroll provider about your EFTPS enrollment. Consider using EFTPS to make your other federal tax payments electronically.
For deposits made by EFTPS to be on time, you must initiate the transaction at least 1 business day before the date that the deposit is due.
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.
The IRS determines whether 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. 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 (including U.S. Territories) in a properly addressed, postage prepaid envelope at least 2 days before the due date. If you hand deliver your deposit to the depositary on the due date, be sure to deliver it before the depositary's daily cutoff deadline. 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.
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 check, bank receipt, or money order is your receipt.
Penalties may apply if you do not make required deposits on time, if you make deposits of 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 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 or timely deposited, the penalty rates are as follows.
| 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 that 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 8 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.
Cedar, Inc. is required to make a deposit of $1,000 on April 15 and $1,500 on May 15. It does not make the deposit on April 15. On May 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 May 15 deposit and the remaining $500 is applied to the April deposit. Accordingly, $500 of the April 15 liability remains undeposited. The penalty on this underdeposit will apply as explained above.
| Quarter | Due |
| Jan., Feb., Mar. | Apr. 30 |
| Apr., May, June | July 31 |
| July, Aug., Sept. | Oct. 31 |
| Oct., Nov., Dec. | Jan. 31 |
For each whole or part 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 generally 25% of the tax due. Also, for each whole or part 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 a 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.
Make current period adjustments for fractions of cents, sick pay, tips, and group-term life insurance on your Form 941-SS, Form 944-SS, or Form 943. See the Instructions for Form 941-SS, Form 944-SS, or Form 943, for information on how to report these adjustments.
If you withhold no social security tax, Medicare tax, or less than the correct amount of either tax from an employee's wages, you can make it up by withholding from later pay to that employee. However, you are responsible for the underpayment. Any reimbursement from the employee's own funds for amounts not collected must be agreed to by you and the employee. See Section 5 for special rules for tax on tips.
By January 31, furnish Copies B and C of Form W-2AS, W-2CM, W-2GU, or Form W-2VI to each employee. If an employee stops working for you during the year, furnish the statement at any time after employment ends but no later than January 31 of the next year. However, if the employee asks you for Form W-2, furnish it within 30 days of the request or the last wage payment, whichever is later.
By March 1, 2010 (or when filing a final return if you make final payments before the end of the year), send your completed forms to the following locations.
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. Only the employer pays FUTA tax; it is not withheld from your employees' wages. For more information, see the Instructions for Form 940.
You must file Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, if you are subject to FUTA tax under the following rules.
You are subject to FUTA tax in 2010 on the wages you pay employees who are not farmworkers or household workers if:
You are subject to FUTA tax only if you paid total cash wages of $1,000 or more (for all household workers) in any calendar quarter in 2009 or 2010.
You are subject to FUTA tax on the wages that you pay to farmworkers in 2010 if:
If (1) or (2) applies, the farmworkers are generally employees of the crew leader.
| The following table summarizes the treatment of special classes of employment and special types of payments. Employers who need more detailed information should consult their Internal Revenue Service representative or see the Employment Tax Regulations. | ||
| Special Classes of Employment and Special Types of Payments | Treatment Under Employment Taxes | |
| Social Security and Medicare | Federal Unemployment (U.S. Virgin Islands Only) | |
| Agricultural labor: | ||
| 1. Service on farm in connection with 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 in section 6 is met. | Taxable if either test in section 11 is met. |
| 2. Service in employ of owner or operator of farm if major part of the services are performed on farm, in management or maintenance, etc., of farm, tools, or equipment, or in salvaging timber, or clearing brush and other debris left by hurricane. | Taxable if $150 test or $2,500 test in section 6 is met. | Taxable if either test in section 11 is met. |
| 3. In connection with the production and harvesting of turpentine and other oleoresinous products. | Taxable if $150 test or $2,500 test in section 6 is met. | Taxable if either test in section 11 is met. |
| 4. Cotton ginning. | Taxable if $150 test or $2,500 test in section 6 is met. | Taxable if either test in section 11 is met. |
| 5. In connection with hatching of poultry. | Taxable (not farmwork if performed off farm).* | Taxable if either test in section 11 is met. |
| 6. In operation or maintenance of ditches, canals, reservoirs, or waterways used only for supplying or storing water for farming purposes and not owned or operated for profit. | Taxable if $150 test or $2,500 test in section 6 is met. | Taxable if either test in section 11 is met. |
| 7. In processing, packaging, delivering, etc., any agricultural or horticultural commodity in its unmanufactured state: | ||
| a. In employ of farm operator. | If operator produced over half of commodity processed, taxable if $150 test or $2,500 test in section 6 is met; otherwise taxable (not farmwork).* | If employer produced over half of commodity processed, taxable if either test in section 11 is met; otherwise taxable (not farmwork). |
| b. In employ of unincorporated group of farm operators (never more than 20). | If group produced all commodity processed, taxable if $150 test or $2,500 test in section 6 is met; otherwise taxable (not farmwork).* | If employer produced over half of commodity processed, taxable if either test in section 11 is met; otherwise taxable (not farmwork). |
| c. In employ of other groups of farm operators (including cooperative organizations and commercial handlers). | Taxable (not farmwork).* | If employer produced over half of commodity processed, taxable if either test in section 11 is met; otherwise taxable (not farmwork). |
| 8. Handling or processing commodities after delivery to terminal market for commercial canning or freezing. | Taxable (not farmwork).* | Taxable (not farmwork). |
| Aliens: | ||
| 1. Resident | ||
| a. Service performed in U.S.** | Same as U.S. citizen; exempt if any part of service as crew member of foreign vessel or aircraft is performed outside U.S. | Same as U.S. citizen. |
| b. Service performed outside U.S.** | Taxable if: (a) working for an American employer or (b) an American employer by agreement with the IRS covers U.S. citizens and residents employed by its foreign affiliates, or subsidiary of an American employer. | Exempt unless on or in connection with an American vessel or aircraft and either performed under contract made in U.S. or alien is employed on such vessel or aircraft when it touches U.S. port. |
| * Wages for services not considered farmwork are reported on Form 941-SS or Form 944-SS. Other exemptions may apply. See sections 4 and 9. * * Benefits provided under cafeteria plans may qualify for exclusion from wages for social security, Medicare, and FUTA taxes. |
| Special Classes of Employment and Special Types of Payments | Treatment Under Employment Taxes | |
|---|---|---|
| Social Security and Medicare | Federal Unemployment (U.S. Virgin Islands Only) | |
| Aliens (continued): | ||
| 2. Nonresidents working in U.S.* | ||
| a. Workers lawfully 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. |
| b. Student, scholar, trainee, teacher, etc. as nonimmigrant alien under section 101(a)(15)(F),(J), (M), or (Q) or Philippine resident admitted to Guam or CNMI under section101(a)(15)(H)(ii) of the Immigration andNationality Act or parallel provision of immigration law in CNMI. | Exempt if service is performed for purposes specified in section 101(a)(15)(F), (H), (J), (M), or (Q) of the Immigration and Nationality Act or parallel provisions of immigration law in CNMI. However, these taxes may apply if the employee becomes a resident alien. | |
| c. Korean resident admitted to Guam under section 101(a)(15)(H)(ii) of the Immigration and Nationality Act. d. All other nonresidents working in U.S. * | Exempt if service is performed for purposes specified in section 101(a)(15)(H)(ii) of the Immigration and Nationality Act. However, these taxes may apply if the employee becomes a resident alien. Same as U.S. citizen; if any part of service as crew member of foreign vessel of aircraft is performed outside U.S. and employer is not American employer. | Exempt Same as U.S. citizen. |
| 3. Nonresident working on American vessel or aircraft outside U.S.* | Taxable if under contract made in U.S. or worker is employed on vessel or aircraft when it touches U.S. port. | |
| Deceased worker's wages: | ||
| 1. Paid to beneficiary or estate in calendar year of worker's death. | Taxable. | Taxable. |
| 2. Paid to beneficiary or estate after the year of worker's death. | Exempt. | Exempt. |
| Dependent care assistance programs (limited to $5,000; $2,500 if married filing separately). | Exempt to the extent that it is reasonable to believe that amounts will be excludable from gross income under Internal Revenue Code (IRC) section 129. | |
| Disabled worker's wages paid after the year in which worker became entitled to disability insurance benefits under the Social Security Act. | Exempt if worker did not perform any service for employer during period for which payment is made. | Taxable. |
| Domestic service in college clubs, fraternities, and sororities. | Exempt if paid to regular student; also exempt if employee is paid less than $100 in a year by an income-tax-exempt employer. | Taxable if employer paid total cash wages of $1,000 or more (for all household employees) in any calendar quarter in the current or preceding year. |
| Employee achievement awards. | Exempt to the extent it is reasonable to believe the amounts will be excludable from gross income under IRC section 74(c). | |
| Family employees: | ||
| 1. Child employed by parent (or by partnership in which each partner is a parent of the child). | Exempt until age 18. | Exempt until age 21. |
| 2. Child employed by parent for domestic work or not in the course of a trade or business. | Exempt until age 21. | Exempt until age 21. |
| 3. Parent employed by child. | Taxable if in course of the child's business. For household work in private home of child, see Pub. 926. | Exempt. |
| 4. Spouse employed by spouse. | Taxable if in course of spouse's business. | Exempt. |
| Federal employees: | ||
| 1. Members of uniformed services; Young Adult Conservation Corps, Job Corps, or National Volunteer Antipoverty Program; Peace Corps volunteers and volunteer leaders. | Taxable. | Exempt. |
| 2. All others. | Taxable if employee is covered by FERS or has a break in service of more than one year (unless the break in service was for temporary military or reserve duty). Others generally subject to Medicare tax. | Exempt unless worker is a seaman performing services on or in connection with American vessel owned by or chartered to the United States and operated by general agent of Secretary of Commerce. |
| * U.S. includes U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. |
| Special Classes of Employment and Special Types of Payments | Treatment Under Employment Taxes | |
|---|---|---|
| Social Security and Medicare | Federal Unemployment (U.S. Virgin Islands Only) | |
| Fishing and related activities, employment in connection with catching, harvesting, farming, etc.: | ||
| 1. Salmon or halibut. | Taxable unless 3 applies. | Taxable unless 3 applies. |
| 2. Other fish and other aquatic forms of animal and vegetable life. | Taxable unless 3 applies. | Exempt unless on vessel of more than 10 net tons and 3 does not apply. |
| 3. An arrangement with the owner or operator of the boat by which the individual receives a share of the boat's catch (or proceeds from the sale of the catch), the share depending on the boat's catch, and operating crew of the boat is normally fewer than 10 individuals.* | Exempt if any cash remuneration is: (a) $100 or less, (b) contingent on minimum catch, and (c) paid solely for additional duties (such as mate, engineer, or cook for which cash remuneration is traditional). | |
| Foreign governments and international organizations. | Exempt. | Exempt. |
| Foreign service by U.S. citizens: | ||
| 1. As U.S. Government employee. | Same as within U.S. | Exempt. See also Federal employees on page 18. |
| 2. For foreign affiliates or subsidiaries of American employers and other private employers. | Exempt unless (a) an American employer by agreement with the IRS covers U.S. citizens employed by its foreign affiliates or subsidiaries or (b) U.S. citizen works for American employer. | Exempt unless (a) on American vessel or aircraft and work is performed under contract made in U.S. or worker is employed on vessel when it touches U.S. port, or (b) U.S. citizen works for American employer (except in a contiguous country with which the U.S. has an agreement for unemployment compensation) or in the U.S. Virgin Islands. |
| Fringe benefits. | Taxable on excess of fair market value of the benefit over the sum of an amount paid for it by the employee and any amount excludable by law. However, optional special valuation rules may apply.** See Publication 15-B for details. | |
| Government employees (other than federal). U.S. Virgin Islands. American Samoa and political subdivisions. Guam and Commonwealth of Northern Mariana Islands and political subdivisions. | (See IRC section 3121(b)(7) or visit www.socialsecurity.gov. Taxable if covered by Section 218 Agreement with SSA. Taxable, unless employee covered by a retirement system. Exempt, except for certain temporary and intermittent employees. | Exempt. Exempt Exempt |
| Group-term life insurance costs. See Publication 15-B for details. | Exempt, except for the cost of premiums that provide more than $50,000 coverage. | Exempt. |
| Homeworkers (industrial, cottage-industry): | ||
| 1. Common law employees. | Taxable. | Taxable. |
| 2. Statutory employees. See section 1. | Taxable if paid $100 or more in cash in a year. | Exempt. |
| Hospital interns. | Taxable. | Exempt. |
| Household workers (domestic service in private homes). Also see Domestic service in college clubs, fraternities, and sororities on page 18. | Taxable if paid $1,700 or more in cash in 2010. Exempt if performed by an individual who is under age 18 during any part of the calendar year and the work is not the principal occupation of the employee. | Taxable if employee paid total cash wages of $1,000 or more (for all household employees) in any calendar quarter in the current or preceding year. |
| Insurance agents or solicitors: | ||
| 1. Full-time life insurance salesperson. | Taxable. | Taxable if employee under common law and not paid solely by commissions (applies to both 1 and 2). |
| 2. Other salesperson of life, casualty, etc., insurance. | Taxable only if employee under common law. | |
| Interest foregone on below-market loans related to compensation and deemed original issue discount. See IRC section 7872 and its regulations for details. | See Publication 15-A. | |
| Meals and lodging furnished free or at a discounted price to the employee. For household employees, agricultural labor, and service not in the course of the employer's trade or business, see Noncash payments on page 20 . | (a) Meals—Taxable unless furnished for employer's convenience and on the employer's premises. For information on the de minimis fringe exclusion, see IRC section 132(e). | |
| (b) Lodging—Taxable unless furnished on employer's premises, for the employer's convenience, and as condition of employment. | ||
| Ministers of churches performing duties as such. | Exempt. | Exempt. |
| * Income derived by Native Americans exercising fishing rights is generally exempt from employment taxes. | ||
| * * Benefits provided under cafeteria plans may qualify for exclusion from wages for social security, Medicare, and FUTA taxes. |
| Special Classes of Employment and Special Types of Payments | Treatment Under Employment Taxes | |
|---|---|---|
| Social Security and Medicare | Federal Unemployment (U.S. Virgin Islands Only) | |
| Moving expense reimbursement: | ||
| 1. Qualified expenses. | Exempt unless you have knowledge that the employee deducted the expenses in a prior year. | |
| 2. Nonqualified expenses. | Taxable. | Taxable. |
| Newspaper carrier under age 18 delivering directly to readers. | Exempt. | Exempt. |
| Newspaper and magazine vendors buying at fixed prices and retaining excess from sales to customers. | Exempt. | Exempt. |
| Noncash payments: | ||
| 1. For household work, agricultural labor, and service not in the course of the employer's trade or business. | Exempt. | Exempt. |
| 2. To certain retail commission salespersons ordinarily paid solely on a cash commission basis. | Taxable. | Taxable. |
| Nonprofit organizations: | ||
| 1. Religious, educational, charitable, etc., organizations described in IRC section 501(c)(3) exempt from income tax under IRC section 501(a). | Taxable if paid $100 or more in a year. (See Form 8274, Certification by Churches and Qualified Church-Controlled Organizations Electing Exemption From Employer Social Security and Medicare Taxes, for election out of social security and Medicare coverage for certain churches and church-controlled organizations.) | Exempt. |
| 2. Corporations organized under Act of Congress described in IRC section 501(c). | Taxable if employee is paid $100 or more in a year unless services excepted by IRC section 3121(b)(5) or (6). | Taxable if employee is paid $50 or more in a quarter unless services excepted by IRC section 3306(c)(6). |
| 3. Other organizations exempt under IRC section 501(a) (other than a pension, profit-sharing, or stock bonus plan described in IRC section 401(a)) or under IRC section 521. | Taxable if employee is paid $100 or more in a year. | Taxable if employee is paid $50 or more in a quarter. |
| Partners: Bona fide members of a partnership. | Exempt. | Exempt. |
| Patients employed by hospitals. | Taxable (exempt for state or local government hospitals). | Exempt. |
| Religious orders: Members who are instructed by the order to perform services: | ||
| 1. For the order, agency of the supervising church, or associated institution. | Exempt unless member has taken a vow of poverty and the religious order or its autonomous subdivision irrevocably elects coverage for entire active membership. | Exempt. |
| 2. For any organization other than those described in 1 above. | Taxable. | Taxable. |
| Retirement and pension plans: | See Publication 15-A for details and information on employer contributions to nonqualified deferred compensation arrangements. | |
| 1. Employer contributions to a qualified plan. | Exempt. | Exempt. |
| 2. Elective employee contributions and deferrals to a plan containing a qualified cash or deferred compensation arrangement (for example, 401(k)). | Taxable. | Taxable. |
| 3. Employee salary reduction contributions to a SIMPLE retirement account. | Taxable. | Taxable. |
| 4. Employer contributions to individual retirement accounts under a simplified employee pension (SEP) plan. | Exempt except for amounts contributed under a salary reduction SEP agreement. | |
| 5. Employer contributions to IRC section 403(b) annuity contracts. | Taxable if paid through a salary reduction agreement (written or otherwise). |
| Special Classes of Employment and Special Types of Payments | Treatment Under Employment Taxes | |
|---|---|---|
| Social Security and Medicare | Federal Unemployment (U.S. Virgin Islands Only) | |
| Retirement and pension plans: (continued) | ||
| 6. Distributions from qualified retirement and pension plans and section 403(b) annuities. | Exempt. | Exempt. |
| Salespersons: | ||
| 1. Common law employees. | Taxable. | Taxable. |
| 2. Statutory employees (referred to in section 1). | Taxable. | Taxable except for full-time life insurance sales agents. |
| 3. Statutory nonemployees (qualified real estate agents and direct sellers). | Exempt. Treated as self-employed individuals if substantially all payments directly related to sales or other output and services performed as nonemployees specified in written contract. Direct sellers must be in the business of selling consumer products other than in a permanent retail place of business. | |
| Scholarships and fellowship grants (includible in income under section 117(c)). | Taxability depends on the nature of the employment and the status of the organization. See Students below. | |
| Severance or dismissal pay. | Taxable. | Taxable. |
| Service not in the course of the employer's trade or business, other than on a farm operated for profit or for household employment in private homes. | Taxable if employee is paid $100 or more in cash in a year. | Taxable only if employee is paid $50 or more in cash in a quarter and works on 24 or more different days in that quarter or in the preceding quarter. |
| Sickness or injury payments under: | ||
| 1. Worker's compensation law. | Exempt. | Exempt. |
| 2. Certain employer plans. | Exempt after end of six calendar months after calendar month employee last worked for employer (applies to both 2 and 3). See Publication 15-A for details. | |
| 3. No employer plan. | ||
| Students: | ||
| 1. Student enrolled and regularly attending classes (generally, at least half time or equivalent) while pursuing course of study, performing services for: | ||
| a. Private school, college, or university. | Exempt. | Exempt. |
| b. Auxiliary nonprofit organization operated for and controlled by school, college, or university. | Exempt unless services are covered by a section 218 (Social Security Act) agreement. | Exempt. |
| c. Public school, college, or university. | Exempt unless services are covered by a section 218 (Social Security Act) agreement. | Exempt. |
| 2. Full-time student performing service for academic credit, combining academic instruction with work experience as an integral part of the program. | Taxable. | Exempt unless program was established for or on behalf of an employer or group of employers. |
| 3. Student nurse performing part-time services for nominal earnings at hospital as incidental part of training. | Exempt. | Exempt. |
| 4. Student employed by organized camps. | Taxable. | Exempt. |
| Supplemental unemployment compensation benefits. | Exempt under certain conditions. See Publication 15-A. | Exempt under certain conditions. See Publication 15-A. |
| Tips: | ||
| 1. If $20 or more in a month. | Taxable. | Taxable for all tips reported in writing to employer. |
| 2. If less than $20 in a month. | Exempt. | Exempt. |
| Worker's compensation. | Exempt. | Exempt. |
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