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Www Irs Govefile

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Www Irs Govefile

Www irs govefile Publication 600 - Main Contents Table of Contents Actual Expenses Optional Sales Tax Tables Instructions for the State and Local General Sales Tax Deduction WorksheetWhat if you lived in more than one state? What if you lived in more than one locality? What if your local general sales tax rate changed during 2006? What if you lived in more than one locality in the same state during 2006? Actual Expenses Generally, you can deduct the actual state and local general sales taxes (including compensating use taxes) you paid in 2006 if the tax rate was the same as the general sales tax rate. Www irs govefile However, sales taxes on food, clothing, medical supplies, and motor vehicles are deductible as a general sales tax even if the tax rate was less than the general sales tax rate. Www irs govefile If you paid sales tax on a motor vehicle at a rate higher than the general sales tax rate, you can deduct only the amount of tax that you would have paid at the general sales tax rate on that vehicle. Www irs govefile Motor vehicles include cars, motorcycles, motor homes, recreational vehicles, sport utility vehicles, trucks, vans, and off-road vehicles. Www irs govefile Also include any state and local general sales taxes paid for a leased motor vehicle. Www irs govefile Do not include sales taxes paid on items used in your trade or business. Www irs govefile To deduct your actual expenses, enter the amount on Schedule A, line 5, and enter “ST” on the dotted line to the left of the line 5 entry space. Www irs govefile You must keep your actual receipts showing general sales taxes paid to use this method. Www irs govefile Refund of general sales taxes. Www irs govefile   If you received a refund of state or local general sales taxes in 2006 for amounts paid in 2006, reduce your actual 2006 state and local general sales taxes by this amount. Www irs govefile If you received a refund of state or local general sales taxes in 2006 for prior year purchases, do not reduce your 2006 state and local general sales taxes by this amount. Www irs govefile But if you deducted your actual state and local general sales taxes in the earlier year and the deduction reduced your tax, you may have to include the refund in income on Form 1040, line 21. Www irs govefile See Recoveries in Pub. Www irs govefile 525 for details. Www irs govefile Optional Sales Tax Tables Instead of using your actual expenses, you can use the tables on pages 5 through 7 to figure your state and local general sales tax deduction. Www irs govefile You may also be able to add the state and local general sales taxes paid on certain specified items. Www irs govefile To figure your state and local general sales tax deduction using the tables, complete the worksheet below. Www irs govefile If your filing status is married filing separately, both you and your spouse elect to deduct sales taxes, and your spouse elects to use the optional sales tax tables, you also must use the tables to figure your state and local general sales tax deduction. Www irs govefile State and Local General Sales Tax Deduction Worksheet (See the instructions that begin on page 3. Www irs govefile ) Before you begin: See the instructions for line 1 on page 3 if: You lived in more than one state during 2006, or You had any nontaxable income in 2006. Www irs govefile   1. Www irs govefile Enter your state general sales taxes from the applicable table on page 5 or 6 (see page 3 of the instructions) 1. Www irs govefile $     Next. Www irs govefile If, for all of 2006, you lived only in Connecticut, the District of Columbia, Hawaii, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, Mississippi, New Jersey, Rhode Island, Virginia, or West Virginia, skip lines 2 through 5, enter -0- on line 6, and go to line 7. Www irs govefile Otherwise, go to line 2       2. Www irs govefile Did you live in Alaska, Arizona, Arkansas (Texarkana only), California (Los Angeles County only), Colorado, Georgia, Illinois, Louisiana, New York State, or North Carolina in 2006?         No. Www irs govefile Enter -0-                   Yes. Www irs govefile Enter your local general sales taxes from the applicable table on page 7 (see page 3 of the instructions)     2. Www irs govefile $       3. Www irs govefile Did your locality impose a local general sales tax in 2006? Residents of California, Nevada, and Texarkana, Arkansas, see page 3 of the instructions             No. Www irs govefile Skip lines 3 through 5, enter -0- on line 6, and go to line 7             Yes. Www irs govefile Enter your local general sales tax rate, but omit the percentage sign. Www irs govefile For example, if your local general sales tax rate was 2. Www irs govefile 5%, enter 2. Www irs govefile 5. Www irs govefile If your local general sales tax rate changed or you lived in more than one locality in the same state during 2006, see page 3 of the instructions. Www irs govefile (If you do not know your local general sales tax rate, contact your local government. Www irs govefile ) 3. Www irs govefile . Www irs govefile       4. Www irs govefile Did you enter -0- on line 2 above?             No. Www irs govefile Skip lines 4 and 5 and go to line 6             Yes. Www irs govefile Enter your state general sales tax rate (shown in the table heading for your state), but omit the percentage sign. Www irs govefile For example, if your state general sales tax rate is 6%, enter 6. Www irs govefile 0 4. Www irs govefile . Www irs govefile       5. Www irs govefile Divide line 3 by line 4. Www irs govefile Enter the result as a decimal (rounded to at least three places) 5. Www irs govefile . Www irs govefile       6. Www irs govefile Did you enter -0- on line 2 above?             No. Www irs govefile Multiply line 2 by line 3   6. Www irs govefile $     Yes. Www irs govefile Multiply line 1 by line 5. Www irs govefile If you lived in more than one locality in the same state during 2006, see page 4 of the instructions           7. Www irs govefile Enter your state and local general sales taxes paid on specified items, if any (see page 4 of the instructions) 7. Www irs govefile $   8. Www irs govefile Deduction for general sales taxes. Www irs govefile Add lines 1, 6, and 7. Www irs govefile Enter the result here and the total from all your state and local general sales tax deduction worksheets, if you completed more than one, on Schedule A, line 5. Www irs govefile Be sure to enter “ST” on the dotted line to the left of the entry space 8. Www irs govefile $     Instructions for the State and Local General Sales Tax Deduction Worksheet Line 1. Www irs govefile    If you lived in the same state for all of 2006, enter the applicable amount, based on your 2006 income and exemptions, from the optional state sales tax table for your state on page 5 or 6. Www irs govefile Read down the “At least-But less than” columns for your state and find the line that includes your 2006 income. Www irs govefile If married filing separately, do not include your spouse's income. Www irs govefile Your 2006 income is the amount shown on your Form 1040, line 38, plus any nontaxable items, such as the following. Www irs govefile Tax-exempt interest. Www irs govefile Veterans' benefits. Www irs govefile Nontaxable combat pay. Www irs govefile Workers' compensation. Www irs govefile Nontaxable part of social security and railroad retirement benefits. Www irs govefile Nontaxable part of IRA, pension, or annuity distributions. Www irs govefile Do not include rollovers. Www irs govefile Public assistance payments. Www irs govefile The exemptions column refers to the number of exemptions claimed on Form 1040, line 6d. Www irs govefile Do not include any additional exemptions you listed on Form 8914 for individuals displaced by Hurricane Katrina. Www irs govefile What if you lived in more than one state?    If you lived in more than one state during 2006, look up the table amount for each state using the above rules. Www irs govefile If there is no table for your state, the table amount is considered to be zero. Www irs govefile Multiply the table amount for each state you lived in by a fraction. Www irs govefile The numerator of the fraction is the number of days you lived in the state during 2006 and the denominator is the total number of days in the year (365). Www irs govefile Enter the total of the prorated table amounts for each state on line 1. Www irs govefile However, if you also lived in a locality during 2006 that imposed a local general sales tax, do not enter the total on line 1. Www irs govefile Instead, complete a separate worksheet for each state you lived in and enter the prorated amount for that state on line 1. Www irs govefile Example. Www irs govefile You lived in State A from January 1 through August 31, 2006 (243 days), and in State B from September 1 through December 31, 2006 (122 days). Www irs govefile The table amount for State A is $500. Www irs govefile The table amount for State B is $400. Www irs govefile You would figure your state general sales tax as follows. Www irs govefile State A: $500 x 243/365 = $333   State B: $400 x 122/365 = 134   Total = $467   If none of the localities in which you lived during 2006 imposed a local general sales tax, enter $467 on line 1 of your worksheet. Www irs govefile Otherwise, complete a separate worksheet for State A and State B. Www irs govefile Enter $333 on line 1 of the State A worksheet and $134 on line 1 of the State B worksheet. Www irs govefile Line 2. Www irs govefile   If you checked the “No” box, enter -0- on line 2, and go to line 3. Www irs govefile If you checked the “Yes” box and lived in the same locality for all of 2006, enter the applicable amount, based on your 2006 income and exemptions, from the optional local sales tax table for your locality on page 7. Www irs govefile Read down the “At least-But less than” columns for your locality and find the line that includes your 2006 income. Www irs govefile See the line 1 instructions on this page to figure your 2006 income. Www irs govefile The exemptions column refers to the number of exemptions claimed on Form 1040, line 6d. Www irs govefile Do not include any additional exemptions you listed on Form 8914 for individuals displaced by Hurricane Katrina. Www irs govefile What if you lived in more than one locality?   If you lived in more than one locality during 2006, look up the table amount for each locality using the above rules. Www irs govefile If there is no table for your locality, the table amount is considered to be zero. Www irs govefile Multiply the table amount for each locality you lived in by a fraction. Www irs govefile The numerator of the fraction is the number of days you lived in the locality during 2006 and the denominator is the total number of days in the year (365). Www irs govefile If you lived in more than one locality in the same state and the local general sales tax rate was the same for each locality, enter the total of the prorated table amounts for each locality in that state on line 2. Www irs govefile Otherwise, complete a separate worksheet for lines 2 through 6 for each locality and enter each prorated table amount on line 2 of the applicable worksheet. Www irs govefile Example. Www irs govefile You lived in Locality 1 from January 1 through August 31, 2006 (243 days), and in Locality 2 from September 1 through December 31, 2006 (122 days). Www irs govefile The table amount for Locality 1 is $100. Www irs govefile The table amount for Locality 2 is $150. Www irs govefile You would figure the amount to enter on line 2 as follows. Www irs govefile Note that this amount may not equal your local sales tax deduction, which is figured on line 6 of the worksheet. Www irs govefile Locality 1: $100 x 243/365 = $67   Locality 2: $150 x 122/365 = 50   Total = $117   Line 3. Www irs govefile   If you lived in California, check the “No” box if your combined state and local general sales tax rate is 7. Www irs govefile 25%. Www irs govefile Otherwise, check the “Yes” box and include on line 3 only the part of the combined rate that is more than 7. Www irs govefile 25%. Www irs govefile   If you lived in Nevada, check the “No” box if your combined state and local general sales tax rate is 6. Www irs govefile 5%. Www irs govefile Otherwise, check the “Yes” box and include on line 3 only the part of the combined rate that is more than 6. Www irs govefile 5%. Www irs govefile   If you lived in Texarkana, Arkansas, check the “Yes” box and enter “4. Www irs govefile 0” on line 3. Www irs govefile Your local general sales tax rate of 4. Www irs govefile 0% includes the additional 1. Www irs govefile 0% Arkansas state sales tax rate for Texarkana and the 1. Www irs govefile 5% sales tax rate for Miller County. Www irs govefile What if your local general sales tax rate changed during 2006?    If you checked the “Yes” box and your local general sales tax rate changed during 2006, figure the rate to enter on line 3 as follows. Www irs govefile Multiply each tax rate for the period it was in effect by a fraction. Www irs govefile The numerator of the fraction is the number of days the rate was in effect during 2006 and the denominator is the total number of days in the year (365). Www irs govefile Enter the total of the prorated tax rates on line 3. Www irs govefile Example. Www irs govefile Locality 1 imposed a 1% local general sales tax from January 1 through September 30, 2006 (273 days). Www irs govefile The rate increased to 1. Www irs govefile 75% for the period from October 1 through December 31, 2006 (92 days). Www irs govefile You would enter “1. Www irs govefile 189” on line 3, figured as follows. Www irs govefile January 1 - September 30: 1. Www irs govefile 00 x 273/365 = 0. Www irs govefile 748   October 1 - December 31: 1. Www irs govefile 75 x 92/365 = 0. Www irs govefile 441   Total = 1. Www irs govefile 189   What if you lived in more than one locality in the same state during 2006?    Complete a separate worksheet for lines 2 through 6 for each locality in your state if you lived in more than one locality in the same state during 2006 and either of the following applies. Www irs govefile Each locality did not have the same local general sales tax rate. Www irs govefile You lived in Texarkana, AR, or Los Angeles County, CA. Www irs govefile   To figure the amount to enter on line 3 of the worksheet for each locality in which you lived (except a locality for which you used the table on page 7 to figure your local general sales tax deduction), multiply the local general sales tax rate by a fraction. Www irs govefile The numerator of the fraction is the number of days you lived in the locality during 2006 and the denominator is the total number of days in the year (365). Www irs govefile Example. Www irs govefile You lived in Locality 1 from January 1 through August 31, 2006 (243 days), and in Locality 2 from September 1 through December 31, 2006 (122 days). Www irs govefile The local general sales tax rate for Locality 1 is 1%. Www irs govefile The rate for Locality 2 is 1. Www irs govefile 75%. Www irs govefile You would enter “0. Www irs govefile 666” on line 3 for the Locality 1 worksheet and “0. Www irs govefile 585” for the Locality 2 worksheet, figured as follows. Www irs govefile Locality 1: 1. Www irs govefile 00 x 243/365 = 0. Www irs govefile 666   Locality 2: 1. Www irs govefile 75 x 122/365 = 0. Www irs govefile 585   Line 6. Www irs govefile   If you lived in more than one locality in the same state during 2006, you should have completed line 1 only on the first worksheet for that state and separate worksheets for lines 2 through 6 for any other locality within that state in which you lived during 2006. Www irs govefile If you checked the “Yes” box on line 6 of any of those worksheets, multiply line 5 of that worksheet by the amount that you entered on line 1 for that state on the first worksheet. Www irs govefile Line 7. Www irs govefile    Enter on line 7 any state and local general sales taxes paid on the following specified items. Www irs govefile If you are completing more than one worksheet, include the total for line 7 on only one of the worksheets. Www irs govefile A motor vehicle (including a car, motorcycle, motor home, recreational vehicle, sport utility vehicle, truck, van, and off-road vehicle). Www irs govefile Also include any state and local general sales taxes paid for a leased motor vehicle. Www irs govefile If the state sales tax rate on these items is higher than the general sales tax rate, only include the amount of tax you would have paid at the general sales tax rate. Www irs govefile An aircraft or boat, if the tax rate was the same as the general sales tax rate. Www irs govefile A home (including a mobile home or prefabricated home) or substantial addition to or major renovation of a home, but only if the tax rate was the same as the general sales tax rate and any of the following applies. Www irs govefile Your state or locality imposes a general sales tax directly on the sale of a home or on the cost of a substantial addition or major renovation. Www irs govefile You purchased the materials to build a home or substantial addition or to perform a major renovation and paid the sales tax directly. Www irs govefile Under your state law, your contractor is considered your agent in the construction of the home or substantial addition or the performance of a major renovation. Www irs govefile The contract must state that the contractor is authorized to act in your name and must follow your directions on construction decisions. Www irs govefile In this case, you will be considered to have purchased any items subject to a sales tax and to have paid the sales tax directly. Www irs govefile   Do not include sales taxes paid on items used in your trade or business. Www irs govefile If you received a refund of state or local general sales taxes in 2006, see Refund of general sales taxes on page 1. Www irs govefile Prev  Up  Next   Home   More Online Publications
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The Www Irs Govefile

Www irs govefile Publication 15 - Main Content Table of Contents 1. Www irs govefile Employer Identification Number (EIN) 2. Www irs govefile Who Are Employees?Relief provisions. Www irs govefile Business Owned and Operated by Spouses 3. Www irs govefile Family Employees 4. Www irs govefile Employee's Social Security Number (SSN)Registering for SSNVS. Www irs govefile 5. Www irs govefile Wages and Other CompensationAccountable plan. Www irs govefile Nonaccountable plan. Www irs govefile Per diem or other fixed allowance. Www irs govefile 50% test. Www irs govefile Health Savings Accounts and medical savings accounts. Www irs govefile Nontaxable fringe benefits. Www irs govefile When fringe benefits are treated as paid. Www irs govefile Valuation of fringe benefits. Www irs govefile Withholding on fringe benefits. Www irs govefile Depositing taxes on fringe benefits. Www irs govefile 6. Www irs govefile TipsOrdering rule. Www irs govefile 7. Www irs govefile Supplemental Wages 8. Www irs govefile Payroll Period 9. Www irs govefile Withholding From Employees' WagesIncome Tax Withholding Social Security and Medicare Taxes Part-Time Workers 10. Www irs govefile Required Notice to Employees About the Earned Income Credit (EIC) 11. Www irs govefile Depositing TaxesWhen To Deposit How To Deposit Deposit Penalties 12. Www irs govefile Filing Form 941 or Form 944 13. Www irs govefile Reporting Adjustments to Form 941 or Form 944Current Period Adjustments Prior Period Adjustments Wage Repayments 14. Www irs govefile Federal Unemployment (FUTA) TaxSuccessor employer. Www irs govefile Household employees. Www irs govefile When to deposit. Www irs govefile Household employees. Www irs govefile Electronic filing by reporting agents. Www irs govefile 16. Www irs govefile How To Use the Income Tax Withholding TablesWage Bracket Method Percentage Method Alternative Methods of Income Tax Withholding How To Get Tax Help 1. Www irs govefile Employer Identification Number (EIN) If you are required to report employment taxes or give tax statements to employees or annuitants, you need an EIN. Www irs govefile The EIN is a nine-digit number the IRS issues. Www irs govefile The digits are arranged as follows: 00-0000000. Www irs govefile It is used to identify the tax accounts of employers and certain others who have no employees. Www irs govefile Use your EIN on all of the items you send to the IRS and SSA. Www irs govefile For more information, see Publication 1635, Employer Identification Number: Understanding Your EIN. Www irs govefile If you do not have an EIN, you may apply for one online. Www irs govefile Go to the IRS. Www irs govefile gov and click on the Apply for an EIN Online link under Tools. Www irs govefile You may also apply for an EIN by calling 1-800-829-4933, or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. Www irs govefile Do not use an SSN in place of an EIN. Www irs govefile You should have only one EIN. Www irs govefile If you have more than one and are not sure which one to use, call 1-800-829-4933 or 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability). Www irs govefile Give the numbers you have, the name and address to which each was assigned, and the address of your main place of business. Www irs govefile The IRS will tell you which number to use. Www irs govefile If you took over another employer's business (see Successor employer in section 9), do not use that employer's EIN. Www irs govefile If you have applied for an EIN but do not 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. Www irs govefile 2. Www irs govefile Who Are Employees? Generally, employees are defined either under common law or under statutes for certain situations. Www irs govefile See Publication 15-A for details on statutory employees and nonemployees. Www irs govefile Employee status under common law. Www irs govefile   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. Www irs govefile This is so even when you give the employee freedom of action. Www irs govefile What matters is that you have the right to control the details of how the services are performed. Www irs govefile See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. Www irs govefile   Generally, people in business for themselves are not employees. Www irs govefile For example, doctors, lawyers, veterinarians, and others in an independent trade in which they offer their services to the public are usually not employees. Www irs govefile However, if the business is incorporated, corporate officers who work in the business are employees of the corporation. Www irs govefile   If an employer-employee relationship exists, it does not matter what it is called. Www irs govefile The employee may be called an agent or independent contractor. Www irs govefile It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time. Www irs govefile Statutory employees. Www irs govefile   If someone who works for you is not an employee under the common law rules discussed earlier, do not withhold federal income tax from his or her pay, unless backup withholding applies. Www irs govefile Although the following persons may not be common law employees, they are considered employees by statute for social security, Medicare, and FUTA tax purposes under certain conditions. Www irs govefile An agent (or commission) driver who delivers food, beverages (other than milk), laundry, or dry cleaning for someone else. Www irs govefile A full-time life insurance salesperson who sells primarily for one company. Www irs govefile A homeworker who works by 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. Www irs govefile 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. Www irs govefile The orders must be for merchandise for resale or supplies for use in the customer's business. Www irs govefile The customers must be retailers, wholesalers, contractors, or operators of hotels, restaurants, or other businesses dealing with food or lodging. Www irs govefile    Statutory nonemployees. Www irs govefile   Direct sellers, qualified real estate agents, and certain companion sitters are, by law, considered nonemployees. Www irs govefile They are generally treated as self-employed for all federal tax purposes, including income and employment taxes. Www irs govefile H-2A agricultural workers. Www irs govefile   On Form W-2, do not check box 13 (Statutory employee), as H-2A workers are not statutory employees. Www irs govefile Treating employees as nonemployees. Www irs govefile   You will generally be liable for social security and Medicare taxes and withheld income tax if you do not deduct and withhold these taxes because you treated an employee as a nonemployee. Www irs govefile You may be able to calculate your liability using special section 3509 rates for the employee share of social security and Medicare taxes and the federal income tax withholding. Www irs govefile The applicable rates depend on whether you filed required Forms 1099. Www irs govefile You cannot recover the employee share of social security, or Medicare tax, or income tax withholding from the employee if the tax is paid under section 3509. Www irs govefile You are liable for the income tax withholding regardless of whether the employee paid income tax on the wages. Www irs govefile You continue to owe the full employer share of social security and Medicare taxes. Www irs govefile The employee remains liable for the employee share of social security and Medicare taxes. Www irs govefile See Internal Revenue Code section 3509 for details. Www irs govefile Also see the Instructions for Form 941-X. Www irs govefile   Section 3509 rates are not 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. Www irs govefile Section 3509 is not available for reclassifying statutory employees. Www irs govefile See Statutory employees , earlier in this section. Www irs govefile   If the employer issued required information returns, the section 3509 rates are: For social security taxes; employer rate of 6. Www irs govefile 2% plus 20% of the employee rate (see the Instructions for Form 941-X). Www irs govefile For Medicare taxes; employer rate of 1. Www irs govefile 45% plus 20% of the employee rate of 1. Www irs govefile 45%, for a total rate of 1. Www irs govefile 74% of wages. Www irs govefile For Additional Medicare Tax; 0. Www irs govefile 18% (20% of the employee rate of 0. Www irs govefile 9%) of wages subject to Additional Medicare Tax. Www irs govefile For income tax withholding, the rate is 1. Www irs govefile 5% of wages. Www irs govefile   If the employer did not issue required information returns, the section 3509 rates are: For social security taxes; employer rate of 6. Www irs govefile 2% plus 40% of the employee rate (see the Instructions for Form 941-X). Www irs govefile For Medicare taxes; employer rate of 1. Www irs govefile 45% plus 40% of the employee rate of 1. Www irs govefile 45%, for a total rate of 2. Www irs govefile 03% of wages. Www irs govefile For Additional Medicare Tax; 0. Www irs govefile 36% (40% of the employee rate of 0. Www irs govefile 9%) of wages subject to Additional Medicare Tax. Www irs govefile For income tax withholding, the rate is 3. Www irs govefile 0% of wages. Www irs govefile Relief provisions. Www irs govefile   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. Www irs govefile 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. Www irs govefile You (or your predecessor) must not have treated any worker holding a substantially similar position as an employee for any periods beginning after 1977. Www irs govefile See Publication 1976, Do You Qualify for Relief Under Section 530. Www irs govefile IRS help. Www irs govefile   If you want the IRS to determine whether a worker is an employee, file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. Www irs govefile Voluntary Classification Settlement Program (VCSP). Www irs govefile   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. Www irs govefile To apply, use Form 8952, Application for Voluntary Classification Settlement Program (VCSP). Www irs govefile For more information visit IRS. Www irs govefile gov and enter “VCSP” in the search box. Www irs govefile 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 are partners in a partnership, whether or not you have a formal partnership agreement. Www irs govefile See Publication 541, Partnerships, for more details. Www irs govefile The partnership is considered the employer of any employees, and is liable for any employment taxes due on wages paid to its employees. Www irs govefile Exception—Qualified joint venture. Www irs govefile   For tax years beginning after December 31, 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. Www irs govefile 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 participation in the Instructions for Schedule C (Form 1040), line G) in the trade or business (mere joint ownership of property is not enough), Both spouses elect to not be treated as a partnership, and The business is co-owned by both spouses and is not held in the name of a state law entity such as a partnership or limited liability company (LLC). Www irs govefile   To make the election, all items of income, gain, loss, deduction, and credit must be divided between the spouses, in accordance with each spouse's interest in the venture, and reported on separate Schedules C or F as sole proprietors. Www irs govefile Each spouse must also file a separate Schedule SE to pay self-employment taxes, as applicable. Www irs govefile   Spouses using the qualified joint venture rules are treated as sole proprietors for federal tax purposes and generally do not need an EIN. Www irs govefile If employment taxes are owed by the qualified joint venture, either spouse may report and pay the employment taxes due on the wages paid to the employees using the EIN of that spouse's sole proprietorship. Www irs govefile Generally, filing as a qualified joint venture will not increase the spouses' total tax owed on the joint income tax return. Www irs govefile However, it gives each spouse credit for social security earnings on which retirement benefits are based and for Medicare coverage without filing a partnership return. Www irs govefile    Note. Www irs govefile If your spouse is your employee, not your partner, see One spouse employed by another in section 3. Www irs govefile   For more information on qualified joint ventures, visit IRS. Www irs govefile gov and enter “qualified joint venture” in the search box. Www irs govefile Exception—Community income. Www irs govefile   If you and your spouse wholly own an unincorporated business as community property under the community property laws of a state, foreign country, or U. Www irs govefile S. Www irs govefile possession, you can treat the business either as a sole proprietorship (of the spouse who carried on the business) or a partnership. Www irs govefile You may still make an election to be taxed as a qualified joint venture instead of a partnership. Www irs govefile See Exception—Qualified joint venture , earlier. Www irs govefile 3. Www irs govefile Family Employees Child employed by parents. Www irs govefile   Payments for the services of a child under age 18 who works for his or her parent in a trade or business are not subject to social security and Medicare taxes if the trade or business is a sole proprietorship or a partnership in which each partner is a parent of the child. Www irs govefile If these payments are for work other than in a trade or business, such as domestic work in the parent's private home, they are not subject to social security and Medicare taxes until the child reaches age 21. Www irs govefile However, see Covered services of a child or spouse , later in this section. Www irs govefile Payments for the services of a child under age 21 who works for his or her parent, whether or not in a trade or business, are not subject to FUTA tax. Www irs govefile Payments for the services of a child of any age who works for his or her parent are generally subject to income tax withholding unless the payments are for domestic work in the parent's home, or unless the payments are for work other than in a trade or business and are less than $50 in the quarter or the child is not regularly employed to do such work. Www irs govefile One spouse employed by another. Www irs govefile   The wages for the services of an individual who works for his or her spouse in a trade or business are subject to income tax withholding and social security and Medicare taxes, but not to FUTA tax. Www irs govefile However, the payments for services of one spouse employed by another in other than a trade or business, such as domestic service in a private home, are not subject to social security, Medicare, and FUTA taxes. Www irs govefile Covered services of a child or spouse. Www irs govefile   The wages for the services of a child or spouse are subject to income tax withholding as well as social security, Medicare, and FUTA taxes if he or she works for: A corporation, even if it is controlled by the child's parent or the individual's spouse; A partnership, even if the child's parent is a partner, unless each partner is a parent of the child; A partnership, even if the individual's spouse is a partner; or An estate, even if it is the estate of a deceased parent. Www irs govefile Parent employed by son or daughter. Www irs govefile   When the employer is a son or daughter employing his or her parent the following rules apply. Www irs govefile Payments for the services of a parent in the son’s or daughter’s (the employer’s) trade or business are subject to income tax withholding and social security and Medicare taxes. Www irs govefile Payments for the services of a parent not in the son’s or daughter’s (the employer’s) trade or business are generally not subject to social security and Medicare taxes. Www irs govefile    Social security and Medicare taxes do apply to payments made to a parent for domestic services if all of the following apply: The parent is employed by his or her son or daughter; The son or daughter (the employer) has a child or stepchild living in the home; The son or daughter (the employer) is a widow or widower, divorced, or living with a spouse who, because of a mental or physical condition, cannot care for the child or stepchild for at least 4 continuous weeks in a calendar quarter; and The child or stepchild is either under age 18 or requires the personal care of an adult for at least 4 continuous weeks in a calendar quarter due to a mental or physical condition. Www irs govefile   Payments made to a parent employed by his or her child are not subject to FUTA tax, regardless of the type of services provided. Www irs govefile 4. Www irs govefile Employee's Social Security Number (SSN) You are required to get each employee's name and SSN and to enter them on Form W-2. Www irs govefile This requirement also applies to resident and nonresident alien employees. Www irs govefile You should ask your employee to show you his or her social security card. Www irs govefile The employee may show the card if it is available. Www irs govefile Do not accept a social security card that says “Not valid for employment. Www irs govefile ” A social security number issued with this legend does not permit employment. Www irs govefile You may, but are not required to, photocopy the social security card if the employee provides it. Www irs govefile If you do not provide the correct employee name and SSN on Form W-2, you may owe a penalty unless you have reasonable cause. Www irs govefile See Publication 1586, Reasonable Cause Regulations & Requirements for Missing and Incorrect Name/TINs, for information on the requirement to solicit the employee's SSN. Www irs govefile Applying for a social security card. Www irs govefile   Any employee who is legally eligible to work in the United States and does not have a social security card can get one by completing Form SS-5, Application for a Social Security Card, and submitting the necessary documentation. Www irs govefile You can get Form SS-5 at SSA offices, by calling 1-800-772-1213, or from the SSA website at www. Www irs govefile socialsecurity. Www irs govefile gov/online/ss-5. Www irs govefile html. Www irs govefile The employee must complete and sign Form SS-5; it cannot be filed by the employer. Www irs govefile You may be asked to supply a letter to accompany Form SS-5 if the employee has exceeded his or her yearly or lifetime limit for the number of replacement cards allowed. Www irs govefile Applying for a social security number. Www irs govefile   If you file Form W-2 on paper and your employee applied for an SSN but does not have one when you must file Form W-2, enter “Applied For” on the form. Www irs govefile If you are filing electronically, enter all zeros (000-00-000) in the social security number field. Www irs govefile When the employee receives the SSN, file Copy A of Form W-2c, Corrected Wage and Tax Statement, with the SSA to show the employee's SSN. Www irs govefile Furnish copies B, C, and 2 of Form W-2c to the employee. Www irs govefile Up to 25 Forms W-2c for each Form W-3c, Transmittal of Corrected Wage and Tax Statements, may now be filed per session over the Internet, with no limit on the number of sessions. Www irs govefile For more information, visit the SSA's Employer W-2 Filing Instructions & Information webpage at www. Www irs govefile socialsecurity. Www irs govefile gov/employer. Www irs govefile Advise your employee to correct the SSN on his or her original Form W-2. Www irs govefile Correctly record the employee's name and SSN. Www irs govefile   Record the name and number of each employee as they are shown on the employee's social security card. Www irs govefile If the employee's name is not correct as shown on the card (for example, because of marriage or divorce), the employee should request a corrected card from the SSA. Www irs govefile Continue to report the employee's wages under the old name until the employee shows you an updated social security card with the new name. Www irs govefile If the SSA issues the employee a replacement card after a name change, or a new card with a different social security number after a change in alien work status, file a Form W-2c to correct the name/SSN reported for the most recently filed Form W-2. Www irs govefile It is not necessary to correct other years if the previous name and number were used for years before the most recent Form W-2. Www irs govefile IRS individual taxpayer identification numbers (ITINs) for aliens. Www irs govefile   Do not accept an ITIN in place of an SSN for employee identification or for work. Www irs govefile An ITIN is only available to resident and nonresident aliens who are not eligible for U. Www irs govefile S. Www irs govefile employment and need identification for other tax purposes. Www irs govefile You can identify an ITIN because it is a nine-digit number, beginning with the number “9” with either a “7” or “8” as the fourth digit and is formatted like an SSN (for example, 9NN-7N-NNNN). Www irs govefile    An individual with an ITIN who later becomes eligible to work in the United States must obtain an SSN. Www irs govefile If the individual is currently eligible to work in the United States, instruct the individual to apply for an SSN and follow the instructions under Applying for a social security number, earlier. Www irs govefile Do not use an ITIN in place of an SSN on Form W-2. Www irs govefile Verification of social security numbers. Www irs govefile   Employers and authorized reporting agents can use the Social Security Number Verification Service (SSNVS) to instantly verify up to 10 names and SSNs (per screen) at a time, or submit an electronic file of up to 250,000 names and SSNs and usually receive the results the next business day. Www irs govefile Visit www. Www irs govefile socialsecurity. Www irs govefile gov/employer/ssnv. Www irs govefile htm for more information. Www irs govefile Registering for SSNVS. Www irs govefile   You must register online and receive authorization from your employer to use SSNVS. Www irs govefile To register, visit SSA's website at www. Www irs govefile ssa. Www irs govefile gov/employer and click on the Business Services Online link. Www irs govefile Follow the registration instructions to obtain a user identification (ID) and password. Www irs govefile You will need to provide the following information about yourself and your company. Www irs govefile Name. Www irs govefile SSN. Www irs govefile Date of birth. Www irs govefile Type of employer. Www irs govefile EIN. Www irs govefile Company name, address, and telephone number. Www irs govefile Email address. Www irs govefile   When you have completed the online registration process, SSA will mail a one-time activation code to your employer. Www irs govefile You must enter the activation code online to use SSNVS. Www irs govefile 5. Www irs govefile Wages and Other Compensation Wages subject to federal employment taxes generally include all pay you give to an employee for services performed. Www irs govefile The pay may be in cash or in other forms. Www irs govefile It includes salaries, vacation allowances, bonuses, commissions, and fringe benefits. Www irs govefile It does not matter how you measure or make the payments. Www irs govefile Amounts an employer pays as a bonus for signing or ratifying a contract in connection with the establishment of an employer-employee relationship and an amount paid to an employee for cancellation of an employment contract and relinquishment of contract rights are wages subject to social security, Medicare, and FUTA taxes and income tax withholding. Www irs govefile Also, compensation paid to a former employee for services performed while still employed is wages subject to employment taxes. Www irs govefile More information. Www irs govefile   See section 6 for a discussion of tips and section 7 for a discussion of supplemental wages. Www irs govefile Also, see section 15 for exceptions to the general rules for wages. Www irs govefile Publication 15-A provides additional information on wages, including nonqualified deferred compensation, and other compensation. Www irs govefile Publication 15-B provides information on other forms of compensation, including: Accident and health benefits, Achievement awards, Adoption assistance, Athletic facilities, De minimis (minimal) benefits, Dependent care assistance, Educational assistance, Employee discounts, Employee stock options, Employer-provided cell phones, Group-term life insurance coverage, Health Savings Accounts, Lodging on your business premises, Meals, Moving expense reimbursements, No-additional-cost services, Retirement planning services, Transportation (commuting) benefits, Tuition reduction, and Working condition benefits. Www irs govefile Employee business expense reimbursements. Www irs govefile   A reimbursement or allowance arrangement is a system by which you pay the advances, reimbursements, and charges for your employees' business expenses. Www irs govefile How you report a reimbursement or allowance amount depends on whether you have an accountable or a nonaccountable plan. Www irs govefile If a single payment includes both wages and an expense reimbursement, you must specify the amount of the reimbursement. Www irs govefile   These rules apply to all ordinary and necessary employee business expenses that would otherwise qualify for a deduction by the employee. Www irs govefile Accountable plan. Www irs govefile   To be an accountable plan, your reimbursement or allowance arrangement must require your employees to meet all three of the following rules. Www irs govefile They must have paid or incurred deductible expenses while performing services as your employees. Www irs govefile The reimbursement or advance must be paid for the expense and must not be an amount that would have otherwise been paid by the employee. Www irs govefile They must substantiate these expenses to you within a reasonable period of time. Www irs govefile They must return any amounts in excess of substantiated expenses within a reasonable period of time. Www irs govefile   Amounts paid under an accountable plan are not wages and are not subject to income, social security, Medicare, and FUTA taxes. Www irs govefile   If the expenses covered by this arrangement are not substantiated (or amounts in excess of substantiated expenses are not returned within a reasonable period of time), the amount paid under the arrangement in excess of the substantiated expenses is treated as paid under a nonaccountable plan. Www irs govefile This amount is subject to income, social security, Medicare, and FUTA taxes for the first payroll period following the end of the reasonable period of time. Www irs govefile   A reasonable period of time depends on the facts and circumstances. Www irs govefile Generally, it is considered reasonable if your employees receive their advance within 30 days of the time they incur the expenses, adequately account for the expenses within 60 days after the expenses were paid or incurred, and return any amounts in excess of expenses within 120 days after the expenses were paid or incurred. Www irs govefile Also, it is considered reasonable if you give your employees a periodic statement (at least quarterly) that asks them to either return or adequately account for outstanding amounts and they do so within 120 days. Www irs govefile Nonaccountable plan. Www irs govefile   Payments to your employee for travel and other necessary expenses of your business under a nonaccountable plan are wages and are treated as supplemental wages and subject to income, social security, Medicare, and FUTA taxes. Www irs govefile Your payments are treated as paid under a nonaccountable plan if: Your employee is not required to or does not substantiate timely those expenses to you with receipts or other documentation, You advance an amount to your employee for business expenses and your employee is not required to or does not return timely any amount he or she does not use for business expenses, You advance or pay an amount to your employee regardless of whether you reasonably expect the employee to have business expenses related to your business, or You pay an amount as a reimbursement you would have otherwise paid as wages. Www irs govefile   See section 7 for more information on supplemental wages. Www irs govefile Per diem or other fixed allowance. Www irs govefile   You may reimburse your employees by travel days, miles, or some other fixed allowance under the applicable revenue procedure. Www irs govefile In these cases, your employee is considered to have accounted to you if your reimbursement does not exceed rates established by the Federal Government. Www irs govefile The 2013 standard mileage rate for auto expenses was 56. Www irs govefile 5 cents per mile. Www irs govefile The rate for 2014 is 56 cents per mile. Www irs govefile   The government per diem rates for meals and lodging in the continental United States are listed in Publication 1542, Per Diem Rates. Www irs govefile Other than the amount of these expenses, your employees' business expenses must be substantiated (for example, the business purpose of the travel or the number of business miles driven). Www irs govefile   If the per diem or allowance paid exceeds the amounts substantiated, you must report the excess amount as wages. Www irs govefile This excess amount is subject to income tax withholding and payment of social security, Medicare, and FUTA taxes. Www irs govefile Show the amount equal to the substantiated amount (for example, the nontaxable portion) in box 12 of Form W-2 using code “L. Www irs govefile ” Wages not paid in money. Www irs govefile   If in the course of your trade or business you pay your employees in a medium that is neither cash nor a readily negotiable instrument, such as a check, you are said to pay them “in kind. Www irs govefile ” Payments in kind may be in the form of goods, lodging, food, clothing, or services. Www irs govefile Generally, the fair market value of such payments at the time they are provided is subject to federal income tax withholding and social security, Medicare, and FUTA taxes. Www irs govefile   However, noncash payments for household work, agricultural labor, and service not in the employer's trade or business are exempt from social security, Medicare, and FUTA taxes. Www irs govefile Withhold income tax on these payments only if you and the employee agree to do so. Www irs govefile Nonetheless, noncash payments for agricultural labor, such as commodity wages, are treated as cash payments subject to employment taxes if the substance of the transaction is a cash payment. Www irs govefile Moving expenses. Www irs govefile   Reimbursed and employer-paid qualified moving expenses (those that would otherwise be deductible by the employee) paid under an accountable plan are not includible in an employee's income unless you have knowledge the employee deducted the expenses in a prior year. Www irs govefile Reimbursed and employer-paid nonqualified moving expenses are includible in income and are subject to employment taxes and income tax withholding. Www irs govefile For more information on moving expenses, see Publication 521, Moving Expenses. Www irs govefile Meals and lodging. Www irs govefile   The value of meals is not taxable income and is not subject to income tax withholding and social security, Medicare, and FUTA taxes if the meals are furnished for the employer's convenience and on the employer's premises. Www irs govefile The value of lodging is not subject to income tax withholding and social security, Medicare, and FUTA taxes if the lodging is furnished for the employer's convenience, on the employer's premises, and as a condition of employment. Www irs govefile    “For the convenience of the employer” means you have a substantial business reason for providing the meals and lodging other than to provide additional compensation to the employee. Www irs govefile For example, meals you provide at the place of work so that an employee is available for emergencies during his or her lunch period are generally considered to be for your convenience. Www irs govefile   However, whether meals or lodging are provided for the convenience of the employer depends on all of the facts and circumstances. Www irs govefile A written statement that the meals or lodging are for your convenience is not sufficient. Www irs govefile 50% test. Www irs govefile   If over 50% of the employees who are provided meals on an employer's business premises receive these meals for the convenience of the employer, all meals provided on the premises are treated as furnished for the convenience of the employer. Www irs govefile If this 50% test is met, the value of the meals is excludable from income for all employees and is not subject to federal income tax withholding or employment taxes. Www irs govefile For more information, see Publication 15-B. Www irs govefile Health insurance plans. Www irs govefile   If you pay the cost of an accident or health insurance plan for your employees, including an employee's spouse and dependents, your payments are not wages and are not subject to social security, Medicare, and FUTA taxes, or federal income tax withholding. Www irs govefile Generally, this exclusion also applies to qualified long-term care insurance contracts. Www irs govefile However, for income tax withholding, the value of health insurance benefits must be included in the wages of S corporation employees who own more than 2% of the S corporation (2% shareholders). Www irs govefile For social security, Medicare, and FUTA taxes, the health insurance benefits are excluded from the wages only for employees and their dependents or for a class or classes of employees and their dependents. Www irs govefile See Announcement 92-16 for more information. Www irs govefile You can find Announcement 92-16 on page 53 of Internal Revenue Bulletin 1992-5. Www irs govefile Health Savings Accounts and medical savings accounts. Www irs govefile   Your contributions to an employee's Health Savings Account (HSA) or Archer medical savings account (MSA) are not subject to social security, Medicare, or FUTA taxes, or federal income tax withholding if it is reasonable to believe at the time of payment of the contributions they will be excludable from the income of the employee. Www irs govefile To the extent it is not reasonable to believe they will be excludable, your contributions are subject to these taxes. Www irs govefile Employee contributions to their HSAs or MSAs through a payroll deduction plan must be included in wages and are subject to social security, Medicare, and FUTA taxes and income tax withholding. Www irs govefile However, HSA contributions made under a salary reduction arrangement in a section 125 cafeteria plan are not wages and are not subject to employment taxes or withholding. Www irs govefile For more information, see the Instructions for Form 8889, Health Savings Accounts (HSAs). Www irs govefile Medical care reimbursements. Www irs govefile   Generally, medical care reimbursements paid for an employee under an employer's self-insured medical reimbursement plan are not wages and are not subject to social security, Medicare, and FUTA taxes, or income tax withholding. Www irs govefile See Publication 15-B for an exception for highly compensated employees. Www irs govefile Differential wage payments. Www irs govefile   Differential wage payments are any payments made by an employer to an individual for a period during which the individual is performing service in the uniformed services while on active duty for a period of more than 30 days and represent all or a portion of the wages the individual would have received from the employer if the individual were performing services for the employer. Www irs govefile   Differential wage payments are wages for income tax withholding, but are not subject to social security, Medicare, or FUTA taxes. Www irs govefile Employers should report differential wage payments in box 1 of Form W-2. Www irs govefile For more information about the tax treatment of differential wage payments, visit IRS. Www irs govefile gov and enter “employees in a combat zone” in the search box. Www irs govefile Fringe benefits. Www irs govefile   You generally must include fringe benefits in an employee's gross income (but see Nontaxable fringe benefits next). Www irs govefile The benefits are subject to income tax withholding and employment taxes. Www irs govefile Fringe benefits include cars you provide, flights on aircraft you provide, free or discounted commercial flights, vacations, discounts on property or services, memberships in country clubs or other social clubs, and tickets to entertainment or sporting events. Www irs govefile In general, the amount you must include is the amount by which the fair market value of the benefits is more than the sum of what the employee paid for it plus any amount the law excludes. Www irs govefile There are other special rules you and your employees may use to value certain fringe benefits. Www irs govefile See Publication 15-B for more information. Www irs govefile Nontaxable fringe benefits. Www irs govefile   Some fringe benefits are not taxable (or are minimally taxable) if certain conditions are met. Www irs govefile See Publication 15-B for details. Www irs govefile The following are some examples of nontaxable fringe benefits. Www irs govefile Services provided to your employees at no additional cost to you. Www irs govefile Qualified employee discounts. Www irs govefile Working condition fringes that are property or services the employee could deduct as a business expense if he or she had paid for it. Www irs govefile Examples include a company car for business use and subscriptions to business magazines. Www irs govefile Certain minimal value fringes (including an occasional cab ride when an employee must work overtime and meals you provide at eating places you run for your employees if the meals are not furnished at below cost). Www irs govefile Qualified transportation fringes subject to specified conditions and dollar limitations (including transportation in a commuter highway vehicle, any transit pass, and qualified parking). Www irs govefile Qualified moving expense reimbursement. Www irs govefile See Moving expenses , earlier in this section, for details. Www irs govefile The use of on-premises athletic facilities, if substantially all of the use is by employees, their spouses, and their dependent children. Www irs govefile Qualified tuition reduction an educational organization provides to its employees for education. Www irs govefile For more information, see Publication 970, Tax Benefits for Education. Www irs govefile Employer-provided cell phones provided primarily for a noncompensatory business reason. Www irs govefile   However, do not exclude the following fringe benefits from the income of highly compensated employees unless the benefit is available to other employees on a nondiscriminatory basis. Www irs govefile No-additional-cost services. Www irs govefile Qualified employee discounts. Www irs govefile Meals provided at an employer operated eating facility. Www irs govefile Reduced tuition for education. Www irs govefile  For more information, including the definition of a highly compensated employee, see Publication 15-B. Www irs govefile When fringe benefits are treated as paid. Www irs govefile   You may choose to treat certain noncash fringe benefits as paid by the pay period, by the quarter, or on any other basis you choose as long as you treat the benefits as paid at least once a year. Www irs govefile You do not have to make a formal choice of payment dates or notify the IRS of the dates you choose. Www irs govefile You do not have to make this choice for all employees. Www irs govefile You may change methods as often as you like, as long as you treat all benefits provided in a calendar year as paid by December 31 of the calendar year. Www irs govefile See Publication 15-B for more information, including a discussion of the special accounting rule for fringe benefits provided during November and December. Www irs govefile Valuation of fringe benefits. Www irs govefile   Generally, you must determine the value of fringe benefits no later than January 31 of the next year. Www irs govefile Before January 31, you may reasonably estimate the value of the fringe benefits for purposes of withholding and depositing on time. Www irs govefile Withholding on fringe benefits. Www irs govefile   You may add the value of fringe benefits to regular wages for a payroll period and figure withholding taxes on the total, or you may withhold federal income tax on the value of the fringe benefits at the optional flat 25% supplemental wage rate. Www irs govefile However, see Withholding on supplemental wages when an employee receives more than $1 million of supplemental wages during the calendar year in section 7. Www irs govefile   You may choose not to withhold income tax on the value of an employee's personal use of a vehicle you provide. Www irs govefile You must, however, withhold social security and Medicare taxes on the use of the vehicle. Www irs govefile See Publication 15-B for more information on this election. Www irs govefile Depositing taxes on fringe benefits. Www irs govefile   Once you choose when fringe benefits are paid, you must deposit taxes in the same deposit period you treat the fringe benefits as paid. Www irs govefile To avoid a penalty, deposit the taxes following the general deposit rules for that deposit period. Www irs govefile   If you determine by January 31 you overestimated the value of a fringe benefit at the time you withheld and deposited for it, you may claim a refund for the overpayment or have it applied to your next employment tax return. Www irs govefile See Valuation of fringe benefits , earlier. Www irs govefile If you underestimated the value and deposited too little, you may be subject to a failure-to-deposit penalty. Www irs govefile See section 11 for information on deposit penalties. Www irs govefile   If you deposited the required amount of taxes but withheld a lesser amount from the employee, you can recover from the employee the social security, Medicare, or income taxes you deposited on his or her behalf, and included in the employee's Form W-2. Www irs govefile However, you must recover the income taxes before April 1 of the following year. Www irs govefile Sick pay. Www irs govefile   In general, sick pay is any amount you pay under a plan to an employee who is unable to work because of sickness or injury. Www irs govefile These amounts are sometimes paid by a third party, such as an insurance company or an employees' trust. Www irs govefile In either case, these payments are subject to social security, Medicare, and FUTA taxes. Www irs govefile Sick pay becomes exempt from these taxes after the end of 6 calendar months after the calendar month the employee last worked for the employer. Www irs govefile The payments are always subject to federal income tax. Www irs govefile See Publication 15-A for more information. Www irs govefile 6. Www irs govefile Tips Tips your employee receives from customers are generally subject to withholding. Www irs govefile Your employee must report cash tips to you by the 10th of the month after the month the tips are received. Www irs govefile The report should include tips you paid over to the employee for charge customers, tips the employee received directly from customers, and tips received from other employees under any tip-sharing arrangement. Www irs govefile Both directly and indirectly tipped employees must report tips to you. Www irs govefile No report is required for months when tips are less than $20. Www irs govefile Your employee reports the tips on Form 4070, Employee's Report of Tips to Employer, or on a similar statement. Www irs govefile The statement must be signed by the employee and must include: The employee's name, address, and SSN, Your name and address, The month or period the report covers, and The total of tips received during the month or period. Www irs govefile Both Forms 4070 and 4070-A, Employee's Daily Record of Tips, are included in Publication 1244, Employee's Daily Record of Tips and Report to Employer. Www irs govefile You are permitted to establish a system for electronic tip reporting by employees. Www irs govefile See Regulations section 31. Www irs govefile 6053-1(d). Www irs govefile Collecting taxes on tips. Www irs govefile   You must collect income tax, employee social security tax, and employee Medicare tax on the employee's tips. Www irs govefile The withholding rules for withholding an employee's share of Medicare tax on tips also apply to withholding the Additional Medicare Tax once wages and tips exceed $200,000 in the calendar year. Www irs govefile If an employee reports to you in writing $20 or more of tips in a month, the tips are also subject to FUTA tax. Www irs govefile   You can collect these taxes from the employee's wages or from other funds he or she makes available. Www irs govefile See Tips treated as supplemental wages in section 7 for more information. Www irs govefile Stop collecting the employee social security tax when his or her wages and tips for tax year 2014 reach $117,000; collect the income and employee Medicare taxes for the whole year on all wages and tips. Www irs govefile You are responsible for the employer social security tax on wages and tips until the wages (including tips) reach the limit. Www irs govefile You are responsible for the employer Medicare tax for the whole year on all wages and tips. Www irs govefile File Form 941 or Form 944 to report withholding and employment taxes on tips. Www irs govefile Ordering rule. Www irs govefile   If, by the 10th of the month after the month for which you received an employee's report on tips, you do not have enough employee funds available to deduct the employee tax, you no longer have to collect it. Www irs govefile If there are not enough funds available, withhold taxes in the following order. Www irs govefile Withhold on regular wages and other compensation. Www irs govefile Withhold social security and Medicare taxes on tips. Www irs govefile Withhold income tax on tips. Www irs govefile Reporting tips. Www irs govefile   Report tips and any collected and uncollected social security and Medicare taxes on Form W-2 and on Form 941, lines 5b, 5c, and 5d (Form 944, lines 4b, 4c, and 4d). Www irs govefile Report an adjustment on Form 941, line 9 (Form 944, line 6), for the uncollected social security and Medicare taxes. Www irs govefile Enter the amount of uncollected social security tax and Medicare tax on Form W-2, box 12, with codes “A” and “B. Www irs govefile ” Do not include any uncollected Additional Medicare Tax in box 12 of Form W-2. Www irs govefile See section 13 and the General Instructions for Forms W-2 and W-3. Www irs govefile   Revenue Ruling 2012-18 provides guidance for employers regarding social security and Medicare taxes imposed on tips, including information on the reporting of the employer share of social security and Medicare taxes under section 3121(q), the difference between tips and service charges, and the section 45B credit. Www irs govefile See Revenue Ruling 2012-18, 2012-26 I. Www irs govefile R. Www irs govefile B. Www irs govefile 1032, available at www. Www irs govefile irs. Www irs govefile gov/irb/2012-26_IRB/ar07. Www irs govefile html. Www irs govefile Allocated tips. Www irs govefile   If you operate a large food or beverage establishment, you must report allocated tips under certain circumstances. Www irs govefile However, do not withhold income, social security, or Medicare taxes on allocated tips. Www irs govefile   A large food or beverage establishment is one that provides food or beverages for consumption on the premises, where tipping is customary, and where there were normally more than 10 employees on a typical business day during the preceding year. Www irs govefile   The tips may be allocated by one of three methods—hours worked, gross receipts, or good faith agreement. Www irs govefile For information about these allocation methods, including the requirement to file Forms 8027 electronically if 250 or more forms are filed, see the Instructions for Form 8027. Www irs govefile For information on filing Form 8027 electronically with the IRS, see Publication 1239. Www irs govefile Tip Rate Determination and Education Program. Www irs govefile   Employers may participate in the Tip Rate Determination and Education Program. Www irs govefile The program primarily consists of two voluntary agreements developed to improve tip income reporting by helping taxpayers to understand and meet their tip reporting responsibilities. Www irs govefile The two agreements are the Tip Rate Determination Agreement (TRDA) and the Tip Reporting Alternative Commitment (TRAC). Www irs govefile A tip agreement, the Gaming Industry Tip Compliance Agreement (GITCA), is available for the gaming (casino) industry. Www irs govefile To get more information about TRDA and TRAC agreements, see Publication 3144, Tips on Tips. Www irs govefile Additionally, visit IRS. Www irs govefile gov and enter “MSU tips” in the search box to get more information about GITCA, TRDA, or TRAC agreements. Www irs govefile 7. Www irs govefile Supplemental Wages Supplemental wages are wage payments to an employee that are not regular wages. Www irs govefile They include, but are not limited to, bonuses, commissions, overtime pay, payments for accumulated sick leave, severance pay, awards, prizes, back pay, retroactive pay increases, and payments for nondeductible moving expenses. Www irs govefile Other payments subject to the supplemental wage rules include taxable fringe benefits and expense allowances paid under a nonaccountable plan. Www irs govefile How you withhold on supplemental wages depends on whether the supplemental payment is identified as a separate payment from regular wages. Www irs govefile See Regulations section 31. Www irs govefile 3402(g)-1 for additional guidance for wages paid after January 1, 2007. Www irs govefile Also see Revenue Ruling 2008-29, 2008-24 I. Www irs govefile R. Www irs govefile B. Www irs govefile 1149, available at www. Www irs govefile irs. Www irs govefile gov/irb/2008-24_IRB/ar08. Www irs govefile html. Www irs govefile Withholding on supplemental wages when an employee receives more than $1 million of supplemental wages from you during the calendar year. Www irs govefile   Special rules apply to the extent supplemental wages paid to any one employee during the calendar year exceed $1 million. Www irs govefile If a supplemental wage payment, together with other supplemental wage payments made to the employee during the calendar year, exceeds $1 million, the excess is subject to withholding at 39. Www irs govefile 6% (or the highest rate of income tax for the year). Www irs govefile Withhold using the 39. Www irs govefile 6% rate without regard to the employee's Form W-4. Www irs govefile In determining supplemental wages paid to the employee during the year, include payments from all businesses under common control. Www irs govefile For more information, see Treasury Decision 9276, 2006-37 I. Www irs govefile R. Www irs govefile B. Www irs govefile 423, available at www. Www irs govefile irs. Www irs govefile gov/irb/2006-37_IRB/ar09. Www irs govefile html. Www irs govefile Withholding on supplemental wage payments to an employee who does not receive $1 million of supplemental wages during the calendar year. Www irs govefile   If the supplemental wages paid to the employee during the calendar year are less than or equal to $1 million, the following rules apply in determining the amount of income tax to be withheld. Www irs govefile Supplemental wages combined with regular wages. Www irs govefile   If you pay supplemental wages with regular wages but do not specify the amount of each, withhold federal income tax as if the total were a single payment for a regular payroll period. Www irs govefile Supplemental wages identified separately from regular wages. Www irs govefile   If you pay supplemental wages separately (or combine them in a single payment and specify the amount of each), the federal income tax withholding method depends partly on whether you withhold income tax from your employee's regular wages. Www irs govefile If you withheld income tax from an employee's regular wages in the current or immediately preceding calendar year, you can use one of the following methods for the supplemental wages. Www irs govefile Withhold a flat 25% (no other percentage allowed). Www irs govefile If the supplemental wages are paid concurrently with regular wages, add the supplemental wages to the concurrently paid regular wages. Www irs govefile If there are no concurrently paid regular wages, add the supplemental wages to alternatively, either the regular wages paid or to be paid for the current payroll period or the regular wages paid for the preceding payroll period. Www irs govefile Figure the income tax withholding as if the total of the regular wages and supplemental wages is a single payment. Www irs govefile Subtract the tax withheld from the regular wages. Www irs govefile Withhold the remaining tax from the supplemental wages. Www irs govefile If there were other payments of supplemental wages paid during the payroll period made before the current payment of supplemental wages, aggregate all the payments of supplemental wages paid during the payroll period with the regular wages paid during the payroll period, calculate the tax on the total, subtract the tax already withheld from the regular wages and the previous supplemental wage payments, and withhold the remaining tax. Www irs govefile If you did not withhold income tax from the employee's regular wages in the current or immediately preceding calendar year, use method 1-b. Www irs govefile This would occur, for example, when the value of the employee's withholding allowances claimed on Form W-4 is more than the wages. Www irs govefile Regardless of the method you use to withhold income tax on supplemental wages, they are subject to social security, Medicare, and FUTA taxes. Www irs govefile Example 1. Www irs govefile You pay John Peters a base salary on the 1st of each month. Www irs govefile He is single and claims one withholding allowance. Www irs govefile In January he is paid $1,000. Www irs govefile Using the wage bracket tables, you withhold $50 from this amount. Www irs govefile In February, he receives salary of $1,000 plus a commission of $2,000, which you combine with regular wages and do not separately identify. Www irs govefile You figure the withholding based on the total of $3,000. Www irs govefile The correct withholding from the tables is $338. Www irs govefile Example 2. Www irs govefile You pay Sharon Warren a base salary on the 1st of each month. Www irs govefile She is single and claims one allowance. Www irs govefile Her May 1 pay is $2,000. Www irs govefile Using the wage bracket tables, you withhold $188. Www irs govefile On May 14 she receives a bonus of $1,000. Www irs govefile Electing to use supplemental wage withholding method 1-b, you: Add the bonus amount to the amount of wages from the most recent base salary pay date (May 1) ($2,000 + $1,000 = $3,000). Www irs govefile Determine the amount of withholding on the combined $3,000 amount to be $338 using the wage bracket tables. Www irs govefile Subtract the amount withheld from wages on the most recent base salary pay date (May 1) from the combined withholding amount ($338 – $188 = $150). Www irs govefile Withhold $150 from the bonus payment. Www irs govefile Example 3. Www irs govefile The facts are the same as in Example 2, except you elect to use the flat rate method of withholding on the bonus. Www irs govefile You withhold 25% of $1,000, or $250, from Sharon's bonus payment. Www irs govefile Example 4. Www irs govefile The facts are the same as in Example 2, except you elect to pay Sharon a second bonus of $2,000 on May 28. Www irs govefile Using supplemental wage withholding method 1-b, you: Add the first and second bonus amounts to the amount of wages from the most recent base salary pay date (May 1) ($2,000 + $1,000 + $2,000 = $5,000). Www irs govefile Determine the amount of withholding on the combined $5,000 amount to be $781 using the wage bracket tables. Www irs govefile Subtract the amounts withheld from wages on the most recent base salary pay date (May 1) and the amounts withheld from the first bonus payment from the combined withholding amount ($781 – $188 – $150 = $443). Www irs govefile Withhold $443 from the second bonus payment. Www irs govefile Tips treated as supplemental wages. Www irs govefile   Withhold income tax on tips from wages earned by the employee or from other funds the employee makes available. Www irs govefile If an employee receives regular wages and reports tips, figure income tax withholding as if the tips were supplemental wages. Www irs govefile If you have not withheld income tax from the regular wages, add the tips to the regular wages. Www irs govefile Then withhold income tax on the total. Www irs govefile If you withheld income tax from the regular wages, you can withhold on the tips by method 1-a or 1-b discussed earlier in this section under Supplemental wages identified separately from regular wages. Www irs govefile Vacation pay. Www irs govefile   Vacation pay is subject to withholding as if it were a regular wage payment. Www irs govefile When vacation pay is in addition to regular wages for the vacation period, treat it as a supplemental wage payment. Www irs govefile If the vacation pay is for a time longer than your usual payroll period, spread it over the pay periods for which you pay it. Www irs govefile 8. Www irs govefile Payroll Period Your payroll period is a period of service for which you usually pay wages. Www irs govefile When you have a regular payroll period, withhold income tax for that time period even if your employee does not work the full period. Www irs govefile No regular payroll period. Www irs govefile   When you do not have a regular payroll period, withhold the tax as if you paid wages for a daily or miscellaneous payroll period. Www irs govefile Figure the number of days (including Sundays and holidays) in the period covered by the wage payment. Www irs govefile If the wages are unrelated to a specific length of time (for example, commissions paid on completion of a sale), count back the number of days from the payment period to the latest of: The last wage payment made during the same calendar year, The date employment began, if during the same calendar year, or January 1 of the same year. Www irs govefile Employee paid for period less than 1 week. Www irs govefile   When you pay an employee for a period of less than one week, and the employee signs a statement under penalties of perjury indicating he or she is not working for any other employer during the same week for wages subject to withholding, figure withholding based on a weekly payroll period. Www irs govefile If the employee later begins to work for another employer for wages subject to withholding, the employee must notify you within 10 days. Www irs govefile You then figure withholding based on the daily or miscellaneous period. Www irs govefile 9. Www irs govefile Withholding From Employees' Wages Income Tax Withholding Using Form W-4 to figure withholding. Www irs govefile   To know how much federal income tax to withhold from employees' wages, you should have a Form W-4 on file for each employee. Www irs govefile Encourage your employees to file an updated Form W-4 for 2014, especially if they owed taxes or received a large refund when filing their 2013 tax return. Www irs govefile Advise your employees to use the IRS Withholding Calculator on the IRS website at www. Www irs govefile irs. Www irs govefile gov/individuals for help in determining how many withholding allowances to claim on their Forms W-4. Www irs govefile   Ask all new employees to give you a signed Form W-4 when they start work. Www irs govefile Make the form effective with the first wage payment. Www irs govefile If a new employee does not give you a completed Form W-4, withhold income tax as if he or she is single, with no withholding allowances. Www irs govefile Form in Spanish. Www irs govefile   You can provide Formulario W-4(SP), Certificado de Exención de Retenciones del Empleado, in place of Form W-4, to your Spanish-speaking employees. Www irs govefile For more information, see Publicación 17(SP), El Impuesto Federal sobre los Ingresos (Para Personas Físicas). Www irs govefile The rules discussed in this section that apply to Form W-4 also apply to Formulario W-4(SP). Www irs govefile Electronic system to receive Form W-4. Www irs govefile   You may establish a system to electronically receive Forms W-4 from your employees. Www irs govefile See Regulations section 31. Www irs govefile 3402(f)(5)-1(c) for more information. Www irs govefile Effective date of Form W-4. Www irs govefile   A Form W-4 remains in effect until the employee gives you a new one. Www irs govefile When you receive a new Form W-4 from an employee, do not adjust withholding for pay periods before the effective date of the new form. Www irs govefile If an employee gives you a Form W-4 that replaces an existing Form W-4, begin withholding no later than the start of the first payroll period ending on or after the 30th day from the date when you received the replacement Form W-4. Www irs govefile For exceptions, see Exemption from federal income tax withholding , IRS review of requested Forms W-4 , and Invalid Forms W-4 , later in this section. Www irs govefile A Form W-4 that makes a change for the next calendar year will not take effect in the current calendar year. Www irs govefile Successor employer. Www irs govefile   If you are a successor employer (see Successor employer , later in this section), secure new Forms W-4 from the transferred employees unless the “Alternative Procedure” in section 5 of Revenue Procedure 2004-53 applies. Www irs govefile See Revenue Procedure 2004-53, 2004-34 I. Www irs govefile R. Www irs govefile B. Www irs govefile 320, available at www. Www irs govefile irs. Www irs govefile gov/irb/2004-34_IRB/ar13. Www irs govefile html. Www irs govefile Completing Form W-4. Www irs govefile   The amount of any federal income tax withholding must be based on marital status and withholding allowances. Www irs govefile Your employees may not base their withholding amounts on a fixed dollar amount or percentage. Www irs govefile However, an employee may specify a dollar amount to be withheld in addition to the amount of withholding based on filing status and withholding allowances claimed on Form W-4. Www irs govefile Employees may claim fewer withholding allowances than they are entitled to claim. Www irs govefile They may wish to claim fewer allowances to ensure they have enough withholding or to offset the tax on other sources of taxable income not subject to withholding. Www irs govefile See Publication 505, Tax Withholding and Estimated Tax, for more information about completing Form W-4. Www irs govefile Along with Form W-4, you may wish to order Publication 505 for use by your employees. Www irs govefile Do not accept any withholding or estimated tax payments from your employees in addition to withholding based on their Form W-4. Www irs govefile If they require additional withholding, they should submit a new Form W-4 and, if necessary, pay estimated tax by filing Form 1040-ES, Estimated Tax for Individuals, or by using the Electronic Federal Tax Payment System (EFTPS) to make estimated tax payments. Www irs govefile Exemption from federal income tax withholding. Www irs govefile   Generally, an employee may claim exemption from federal income tax withholding because he or she had no income tax liability last year and expects none this year. Www irs govefile See the Form W-4 instructions for more information. Www irs govefile However, the wages are still subject to social security and Medicare taxes. Www irs govefile See also Invalid Forms W-4 , later in this section. Www irs govefile   A Form W-4 claiming exemption from withholding is effective when it is filed with the employer and only for that calendar year. Www irs govefile To continue to be exempt from withholding in the next calendar year, an employee must give you a new Form W-4 by February 15. Www irs govefile If the employee does not give you a new Form W-4 by February 15, begin withholding based on the last Form W-4 for the employee that did not claim an exemption from withholding or, if one was not filed, then withhold tax as if he or she is single with zero withholding allowances. Www irs govefile If the employee provides a new Form W-4 claiming exemption from withholding on February 16 or later, you may apply it to future wages but do not refund any taxes already withheld. Www irs govefile Withholding income taxes on the wages of nonresident alien employees. Www irs govefile   In general, you must withhold federal income taxes on the wages of nonresident alien employees. Www irs govefile However, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for exceptions to this general rule. Www irs govefile Also see section 3 of Publication 51 (Circular A), Agricultural Employer's Tax Guide, for guidance on H-2A visa workers. Www irs govefile Withholding adjustment for nonresident alien employees. Www irs govefile   For 2014, apply the procedure discussed next to figure the amount of income tax to withhold from the wages of nonresident alien employees performing services within the United States. Www irs govefile Nonresident alien students from India and business apprentices from India are not subject to this procedure. Www irs govefile Instructions. Www irs govefile   To figure how much income tax to withhold from the wages paid to a nonresident alien employee performing services in the United States, use the following steps. Www irs govefile Step 1. Www irs govefile   Add to the wages paid to the nonresident alien employee for the payroll period the amount shown in the chart below for the applicable payroll period. Www irs govefile    Amount to Add to Nonresident Alien Employee's Wages for Calculating Income Tax Withholding Only   Payroll Period Add Additional     Weekly $ 43. Www irs govefile 30     Biweekly 86. Www irs govefile 50     Semimonthly 93. Www irs govefile 80     Monthly 187. Www irs govefile 50     Quarterly 562. Www irs govefile 50     Semiannually 1,125. Www irs govefile 00     Annually 2,250. Www irs govefile 00     Daily or Miscellaneous (each day of the payroll period) 8. Www irs govefile 70   Step 2. Www irs govefile   Use the amount figured in Step 1 and the number of withholding allowances claimed (generally limited to one allowance) to figure income tax withholding. Www irs govefile Determine the value of withholding allowances by multiplying the number of withholding allowances claimed by the appropriate amount from Table 5. Www irs govefile Percentage Method—2014 Amount for One Withholding Allowance shown on page 41. Www irs govefile If you are using the Percentage Method Tables for Income Tax Withholding, provided on pages 43–44, reduce the amount figured in Step 1 by the value of withholding allowances and use that reduced amount to figure the income tax withholding. Www irs govefile If you are using the Wage Bracket Method for Income Tax Withholding, provided on pages 45–64, use the amount figured in Step 1 and the number of withholding allowances to figure income tax withholding. Www irs govefile The amounts from the chart above are added to wages solely for calculating income tax withholding on the wages of the nonresident alien employee. Www irs govefile The amounts from the chart should not be included in any box on the employee's Form W-2 and do not increase the income tax liability of the employee. Www irs govefile Also, the amounts from the chart do not increase the social security tax or Medicare tax liability of the employer or the employee, or the FUTA tax liability of the employer. Www irs govefile This procedure only applies to nonresident alien employees who have wages subject to income tax withholding. Www irs govefile Example. Www irs govefile An employer using the percentage method of withholding pays wages of $500 for a biweekly payroll period to a married nonresident alien employee. Www irs govefile The nonresident alien has properly completed Form W-4, entering marital status as “single” with one withholding allowance and indicating status as a nonresident alien on Form W-4, line 6 (see Nonresident alien employee's Form W-4 , later in this section). Www irs govefile The employer determines the wages to be used in the withholding tables by adding to the $500 amount of wages paid the amount of $86. Www irs govefile 50 from the chart under Step 1 ($586. Www irs govefile 50 total). Www irs govefile The employer then applies the applicable tables to determine the income tax withholding for nonresident aliens (see Step 2 ). Www irs govefile Reminder: If you use the Percentage Method Tables for Income Tax Withholding, reduce the amount figured in Step 1 by the value of withholding allowances and use that reduced amount to figure income tax withholding. Www irs govefile The $86. Www irs govefile 50 added to wages for calculating income tax withholding is not reported on Form W-2, and does not increase the income tax liability of the employee. Www irs govefile Also, the $86. Www irs govefile 50 added to wages does not affect the social security tax or Medicare tax liability of the employer or the employee, or the FUTA tax liability of the employer. Www irs govefile Supplemental wage payment. Www irs govefile   This procedure for determining the amount of income tax withholding does not apply to a supplemental wage payment (see section 7) if the 39. Www irs govefile 6% mandatory flat rate withholding applies or if the 25% optional flat rate withholding is being used to calculate income tax withholding on the supplemental wage payment. Www irs govefile Nonresident alien employee's Form W-4. Www irs govefile   When completing Forms W-4, nonresident aliens are required to: Not claim exemption from income tax withholding, Request withholding as if they are single, regardless of their actual marital status, Claim only one allowance (if the nonresident alien is a resident of Canada, Mexico, or South Korea, or a student or business apprentice from India, he or she may claim more than one allowance), and Write “Nonresident Alien” or “NRA” above the dotted line on line 6 of Form W-4. Www irs govefile   If you maintain an electronic Form W-4 system, you should provide a field for nonresident aliens to enter nonresident alien status in lieu of writing “Nonresident Alien” or “NRA” above the dotted line on line 6. Www irs govefile A nonresident alien employee may request additional withholding at his or her option for other purposes, although such additions should not be necessary for withholding to cover federal income tax liability related to employment. Www irs govefile Form 8233. Www irs govefile   If a nonresident alien employee claims a tax treaty exemption from withholding, the employee must submit Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, with respect to the income exempt under the treaty, instead of Form W-4. Www irs govefile See Publication 515 for details. Www irs govefile IRS review of requested Forms W-4. Www irs govefile   When requested by the IRS, you must make original Forms W-4 available for inspection by an IRS employee. Www irs govefile You may also be directed to send certain Forms W-4 to the IRS. Www irs govefile You may receive a notice from the IRS requiring you to submit a copy of Form W-4 for one or more of your named employees. Www irs govefile Send the requested copy or copies of Form W-4 to the IRS at the address provided and in the manner directed by the notice. Www irs govefile The IRS may also require you to submit copies of Form W-4 to the IRS as directed by Treasury Decision 9337, 2007-35 I. Www irs govefile R. Www irs govefile B. Www irs govefile 455, which is available at www. Www irs govefile irs. Www irs govefile gov/irb/2007-35_IRB/ar10. Www irs govefile html. Www irs govefile When we refer to Form W-4, the same rules apply to Formulario W-4(SP), its Spanish translation. Www irs govefile After submitting a copy of a requested Form W-4 to the IRS, continue to withhold federal income tax based on that Form W-4 if it is valid (see Invalid Forms W-4 , later in this section). Www irs govefile However, if the IRS later notifies you in writing the employee is not entitled to claim exemption from withholding or a claimed number of withholding allowances, withhold federal income tax based on the effective date, marital status, and maximum number of withholding allowances specified in the IRS notice (commonly referred to as a "lock-in letter