Posted: July 21st, 2021

Department of the Treasury Internal Revenue Service Publication 15

Department of the TreasuryInternal Revenue ServicePublication 15ContentsWhat's New . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Reminders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Cat. No. 10000WCalendar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7(Circular E),Employer'sTax GuideIntroduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8For use in20141. Employer Identification Number (EIN) . . . . . . . 102. Who Are Employees? . . . . . . . . . . . . . . . . . . . . 103. Family Employees . . . . . . . . . . . . . . . . . . . . . . 124. Employee's Social Security Number (SSN) . . . 125. Wages and Other Compensation . . . . . . . . . . . 136. Tips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177. Supplemental Wages . . . . . . . . . . . . . . . . . . . . 188. Payroll Period . . . . . . . . . . . . . . . . . . . . . . . . . . 199. Withholding From Employees' Wages . . . . . . . 2010. Required Notice to Employees About theEarned Income Credit (EIC) . . . . . . . . . . . . . . 2411. Depositing Taxes . . . . . . . . . . . . . . . . . . . . . . 2412. Filing Form 941 or Form 944 . . . . . . . . . . . . . . 2913. Reporting Adjustments to Form 941 orForm 944 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3114. Federal Unemployment (FUTA) Tax . . . . . . . . 3415. Special Rules for Various Types ofServices and Payments . . . . . . . . . . . . . . . . . 3616. How To Use the Income Tax WithholdingTables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41How To Get Tax Help . . . . . . . . . . . . . . . . . . . . . . 65Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67Future DevelopmentsFor the latest information about developments related toPublication 15 (Circular E), such as legislation enactedafter it was published, go to www.irs.gov/pub15.What's NewGet forms and other Informationfaster and easier byInternet at IRS.govDec 18, 2013Social security and Medicare tax for 2014. The socialsecurity tax rate is 6.2% each for the employee and employer, unchanged from 2013. The social security wagebase limit is $117,000.The Medicare tax rate is 1.45% each for the employeeand employer, unchanged from 2013. There is no wagebase limit for Medicare tax.Social security and Medicare taxes apply to the wagesof household workers you pay $1,900 or more in cash oran equivalent form of compensation. Social security andMedicare taxes apply to election workers who are paid$1,600 or more in cash or an equivalent form of compensation.2014 withholdng tables. This publication includes the2014 Percentage Method Tables and Wage Bracket Tables for Income Tax Withholding.Withholding allowance. The 2014 amount for one withholding allowance on an annual basis is $3,950.Voluntary withholding on dividends and other distri­butions by an Alaska Native Corporation (ANC). Ashareholder of an ANC may now request voluntary income tax withholding on dividends and other distributionspaid by an ANC. A shareholder may request voluntarywithholding by giving the ANC a completed Form W-4V,Voluntary Withholding Request. For more information seeNotice 2013-77, 2013-50 I.R.B. 632, available atwww.irs.gov/irb/2013-50_IRB/ar10.html.Change of responsible party. Beginning January 1,2014, any entity with an employer identification number(EIN) must file Form 8822-B, Change of Address or Responsible Party — Business, to report the latest change toits responsible party. Form 8822-B must be filed within 60days of the change. If the change in the identity of your responsible party occurred before 2014, and you have notpreviously notified the IRS of the change, file Form8822-B before March 1, 2014, reporting only the most recent change. For a definition of “responsible party,” seethe Form 8822-B instructions.Same­sex marriage. For federal tax purposes, individuals of the same sex are considered married if they werelawfully married in a state (or foreign country) whose lawsauthorize the marriage of two individuals of the same sex,even if the state (or foreign country) in which they now livedoes not recognize same-sex marriage. For more information, see Revenue Ruling 2013-17, 2013-38 I.R.B. 201,available at www.irs.gov/irb/2013-38_IRB/ar07.html.Notice 2013-61 provides special administrative procedures for employers to make claims for refunds or adjustments of overpayments of social security and Medicaretaxes with respect to certain same-sex spouse benefitsbefore expiration of the period of limitations. Notice2013-61, 2013-44 I.R.B. 432, is available at www.irs.gov/irb/2013-44_IRB/ar10.html.RemindersAdditional Medicare Tax withholding. In addition towithholding Medicare tax at 1.45%, you must withhold a0.9% Additional Medicare Tax from wages you pay to anemployee in excess of $200,000 in a calendar year. Youare required to begin withholding Additional Medicare Taxin the pay period in which you pay wages in excess of$200,000 to an employee and continue to withhold it eachpay period until the end of the calendar year. AdditionalMedicare Tax is only imposed on the employee. There isno employer share of Additional Medicare Tax. All wagesPage 2that are subject to Medicare tax are subject to AdditionalMedicare Tax withholding if paid in excess of the$200,000 withholding threshold.For more information on what wages are subject toMedicare tax, see the chart, Special Rules for VariousTypes of Services and Payments, in section 15. For moreinformation on Additional Medicare Tax, visit IRS.gov andenter “Additional Medicare Tax” in the search box.Work opportunity tax credit for qualified tax­exemptorganizations hiring qualified veterans. The work opportunity tax credit is available for eligible unemployedveterans who began work on or after November 22, 2011,and before January 1, 2014. Qualified tax-exempt organizations that hire eligible unemployed veterans can claimthe work opportunity tax credit against their payroll tax liability using Form 5884-C, Work Opportunity Credit forQualified Tax-Exempt Organizations Hiring Qualified Veterans. For more information, visit IRS.gov and enter “workopportunity tax credit” in the search box.Outsourcing payroll duties. Employers are responsibleto ensure that tax returns are filed and deposits and payments are made, even if the employer contracts with athird party to perform these acts. The employer remainsresponsible if the third party fails to perform any requiredaction. If you choose to outsource any of your payroll andrelated tax duties (that is, withholding, reporting, and paying over social security, Medicare, FUTA, and incometaxes) to a third-party payer such as a payroll service provider or reporting agent, visit IRS.gov and enter “outsourcing payroll duties” in the search box for helpful informationon this topic.COBRA premium assistance credit. The credit forCOBRA premium assistance payments applies to premiums paid for employees involuntarily terminated betweenSeptember 1, 2008, and May 31, 2010, and to premiumspaid for up to 15 months. See COBRA premium assistance credit under Introduction.Federal tax deposits must be made by electronicfunds transfer. You must use electronic funds transfer tomake all federal tax deposits. Generally, electronic fundtransfers are made using the Electronic Federal Tax Payment System (EFTPS). If you do not want to use EFTPS,you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to makeelectronic deposits on your behalf. Also, you may arrangefor your financial institution to initiate a same-day wirepayment on your behalf. EFTPS is a free service providedby the Department of Treasury. Services provided by yourtax professional, financial institution, payroll service, orother third party may have a fee.For more information on making federal tax deposits,see How To Deposit in section 11. To get more information about EFTPS or to enroll in EFTPS, visitwww.eftps.gov or call 1-800-555-4477 or 1-800-733-4829(TDD). Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax PaymentSystem: A Guide To Getting Started.You must receive written notice from the IRS to fileForm 944. If you have been filing Forms 941, Employer'sPublication 15 (2014)QUARTERLY Federal Tax Return (or Forms 941-SS, Employer's QUARTERLY Federal Tax Return—American Samoa, Guam, the Commonwealth of the Northern MarianaIslands, and the U.S. Virgin Islands, or Formularios941-PR, Planilla para la Declaración Federal TRIMESTRAL del Patrono), and believe your employment taxesfor the calendar year will be $1,000 or less, and you wouldlike to file Form 944, Employer's ANNUAL Federal TaxReturn, instead of Forms 941, you must contact the IRS torequest to file Form 944. You must receive written noticefrom the IRS to file Form 944 instead of Forms 941 beforeyou may file this form. For more information on requestingto file Form 944, visit IRS.gov and enter “file employmenttaxes annually” in the search box.Employers can request to file Forms 941 instead ofForm 944. If you received notice from the IRS and havebeen filing Form 944 but would like to file Forms 941 instead, you must contact the IRS to request to file Forms941. You must receive written notice from the IRS to fileForms 941 instead of Form 944 before you may file theseforms. For more information on requesting to file Form944, visit IRS.gov and enter “file employment taxes annually” in the search box.Aggregate Form 941 filers. Agents must completeSchedule R (Form 941), Allocation Schedule for Aggregate Form 941 Filers, when filing an aggregate Form 941.Aggregate Forms 941 may only be filed by agents approved by the IRS under section 3504 of the Internal Revenue Code. To request approval to act as an agent for anemployer, the agent files Form 2678, Employer/Payer Appointment of Agent, with the IRS.Aggregate Form 940 filers. Agents must completeSchedule R (Form 940), Allocation Schedule for Aggregate Form 940 Filers, when filing an aggregate Form 940,Employer's Annual Federal Unemployment (FUTA) TaxReturn. Aggregate Forms 940 can be filed by agents acting on behalf of home care service recipients who receivehome care services through a program administered by afederal, state, or local government. To request approval toact as an agent on behalf of home care service recipients,the agent files Form 2678 with the IRS.Electronic Filing and PaymentNow, more than ever before, businesses can enjoy thebenefits of filing and paying their federal taxes electronically. Whether you rely on a tax professional or handleyour own taxes, the IRS offers you convenient programsto make filing and payment easier.Spend less time and worry about taxes and more timerunning your business. Use e-file and the Electronic Federal Tax Payment System (EFTPS) to your benefit.For e-file, visit www.irs.gov/efile for additional information.For EFTPS, visit www.eftps.gov or call EFTPS Customer Service at 1-800-555-4477 or 1-800-733-4829(TDD).Publication 15 (2014)For electronic filing of Forms W-2, Wage and TaxStatement, visit www.socialsecurity.gov/employer.If you are filing your tax return or paying your federal taxes electronically, a valid EIN is required. IfCAUTIONa valid EIN is not provided, the return or paymentwill not be processed. This may result in penalties and delays in processing your return or payment.!Electronic funds withdrawal (EFW). If you file Form940, Form 941, Form 944, or Form 945 electronically, youcan e-file and e-pay (electronic funds withdrawal) the balance due in a single step using tax preparation softwareor through a tax professional. However, do not use EFWto make federal tax deposits. For more information onpaying your taxes using EFW, visit the IRS website atwww.irs.gov/e-pay. A fee may be charged to file electronically.Credit or debit card payments. For information on paying your taxes with a credit or debit card, visit the IRSwebsite at www.irs.gov/e-pay. However, do not use creditor debit cards to make federal tax deposits.Forms in SpanishYou can provide Formulario W-4(SP), Certificado deExención de Retenciones del Empleado, in place of FormW-4, Employee's Withholding Allowance Certificate, toyour Spanish-speaking employees. For more information,see Publicación 17(SP), El Impuesto Federal sobre losIngresos (Para Personas Físicas). For nonemployees,Formulario W-9(SP), Solicitud y Certificación del Númerode Identificación del Contribuyente, may be used in placeof Form W-9, Request for Taxpayer Identification Numberand Certification.Hiring New EmployeesEligibility for employment. You must verify that eachnew employee is legally eligible to work in the UnitedStates. This includes completing the U.S. Citizenship andImmigration Services (USCIS) Form I-9, Employment Eligibility Verification. You can get the form from USCIS offices or by calling 1-800-870-3676. Contact the USCIS at1-800-375-5283, or visit the USCIS website atwww.uscis.gov for more information.New hire reporting. You are required to report any newemployee to a designated state new hire registry. A newemployee is an employee who has not previously beenemployed by you or was previously employed by you buthas been separated from such prior employment for atleast 60 consecutive days.Many states accept a copy of Form W-4 with employerinformation added. Visit the Office of Child Support Enforcement website at www.acf.hhs.gov/programs/cse/newhire for more information.W­4 request. Ask each new employee to complete the2014 Form W-4. See section 9.Page 3Employer ResponsibilitiesEmployer Responsibilities: The following list provides a brief summary of your basic responsibilities. Because the individualcircumstances for each employer can vary greatly, responsibilities for withholding, depositing, and reporting employment taxes candiffer. Each item in this list has a page reference to a more detailed discussion in this publication.New Employees:PageVerify work eligibility of new employees . . . . . . .3Record employees' names and SSNs fromsocial security cards . . . . . . . . . . . . . . . . . . . .4Ask employees for Form W-4 . . . . . . . . . . . . . .3Each Payday:Withhold federal income tax based on eachemployee's Form W-4 . . . . . . . . . . . . . . . . . . .20Withhold employee's share of social securityand Medicare taxes . . . . . . . . . . . . . . . . . . . .23Deposit:• Withheld income tax• Withheld and employer social security taxes• Withheld and employer Medicare taxes . . . . .24Note: Due date of deposit generally dependson your deposit schedule (monthly orsemiweekly)Quarterly (By April 30, July 31, October 31,and January 31):Deposit FUTA tax if undeposited amountis over $500 . . . . . . . . . . . . . . . . . . . . . . . . . .35File Form 941 (pay tax with return if notrequired to deposit) . . . . . . . . . . . . . . . . . . . . .29Name and social security number. Record each newemployee's name and number from his or her social security card. Any employee without a social security cardshould apply for one. See section 4.Paying Wages, Pensions, orAnnuitiesCorrecting Form 941 or Form 944. If you discover anerror on a previously filed Form 941 or Form 944, makethe correction using Form 941-X, Adjusted Employer'sQUARTERLY Federal Tax Return or Claim for Refund, orForm 944-X, Adjusted Employer's ANNUAL Federal TaxReturn or Claim for Refund. Forms 941-X and 944-X arestand-alone forms, meaning taxpayers can file them whenan error is discovered. Forms 941-X and 944-X are usedby employers to claim refunds or abatements of employment taxes, rather than Form 843, Claim for Refund andRequest for Abatement. See section 13 for more information.Income tax withholding. Withhold federal income taxfrom each wage payment or supplemental unemploymentcompensation plan benefit payment according to the employee's Form W-4 and the correct withholding table. Ifyou have nonresident alien employees, see Withholdingincome taxes on the wages of nonresident alien employees in section 9.Page 4Annually (By January 31 of the current year,Pagefor the prior year):File Form 944 if required (pay tax with return ifnot required to deposit) . . . . . . . . . . . . . . . . . . . . .29Annually (see Calendar for due dates):Remind employees to submit a new Form W-4if they need to change their withholding . . . . . . . . . .20Ask for a new Form W-4 from employeesclaiming exemption from income taxwithholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20Reconcile Forms 941 (or Form 944) with FormsW-2 and W-3 . . . . . . . . . . . . . . . . . . . . . . . . . . . .31Furnish each employee a Form W-2 . . . . . . . . . . . .7File Copy A of Forms W-2 and the transmittalForm W-3 with the SSA . . . . . . . . . . . . . . . . . . . . .8Furnish each other payee a Form 1099 (for example,7Form 1099-MISC, Miscellaneous Income) . . . . . . . .File Forms 1099 and the transmittal Form1096 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .File Form 940 . . . . . . . . . . . . . . . . . . . . . . . . . . . .File Form 945 for any nonpayroll income taxwithholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .878Withhold from periodic pension and annuity pay­ments as if the recipient is married claiming three withholding allowances, unless he or she has provided FormW-4P, Withholding Certificate for Pension or Annuity Payments, either electing no withholding or giving a differentnumber of allowances, marital status, or an additionalamount to be withheld. Do not withhold on direct rolloversfrom qualified plans or governmental section 457(b) plans.See section 9 and Publication 15-A, Employer's Supplemental Tax Guide. Publication 15-A includes informationabout withholding on pensions and annuities.Zero wage return. If you have not filed a “final” Form 941or Form 944, or are not a “seasonal” employer, you mustcontinue to file a Form 941 or Form 944 even for periodsduring which you paid no wages. The IRS encourages youto file your “Zero Wage” Forms 941 or 944 electronicallyusing IRS e-file at www.irs.gov/efile.Information ReturnsYou may be required to file information returns to reportcertain types of payments made during the year. Forexample, you must file Form 1099-MISC, MiscellaneousIncome, to report payments of $600 or more to personsnot treated as employees (for example, independentcontractors) for services performed for your trade orbusiness. For details about filing Forms 1099 and forinformation about required electronic filing, see thePublication 15 (2014)General Instructions for Certain Information Returns forgeneral information and the separate, specific instructionsfor each information return you file (for example,Instructions for Form 1099-MISC). Generally, do not useForms 1099 to report wages and other compensation youpaid to employees; report these on Form W-2. See theGeneral Instructions for Forms W-2 and W-3 for detailsabout filing Form W-2 and for information about requiredelectronic filing. If you file 250 or more Forms 1099, youmust file them electronically. If you file 250 or more FormsW-2, you must file them electronically. SSA will not acceptForms W-2 and W-3 filed on magnetic media.Information reporting customer service site. The IRSoperates the Enterprise Computing Center—Martinsburg,a centralized customer service site, to answer questionsabout reporting on Forms W-2, W-3, 1099, and other information returns. If you have questions related to reporting on information returns, call 1-866-455-7438 (toll free),304-263-8700 (toll call), or 304-267-3367 (TDD/TTY forpersons who are deaf, hard of hearing, or have a speechdisability). The center can also be reached by email atmccirp@irs.gov. Do not include tax identification numbers(TINs) or attachments in email correspondence becauseelectronic mail is not secure.Nonpayroll Income TaxWithholdingNonpayroll federal income tax withholding (reported onForms 1099 and Form W-2G) must be reported on Form945, Annual Return of Withheld Federal Income Tax.Separate deposits are required for payroll (Form 941 orForm 944) and nonpayroll (Form 945) withholding.Nonpayroll items include:Pensions (including distributions from tax-favoredretirement plans, for example, section 401(k), section403(b), and governmental section 457(b) plans) andannuities.Military retirement.participants from some nonqualified pension plans anddeferred compensation plans (including section 457(b)plans of tax-exempt organizations) are treated as wagesand are reported on Form W-2, income tax withheld mustbe reported on Form 941 or Form 944, not on Form 945.However, distributions from such plans to a beneficiary orestate of a deceased employee are not wages and are reported on Forms 1099-R, Distributions From Pensions,Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.; income tax withheld must be reported on Form 945.Backup withholding. You generally must withhold 28%of certain taxable payments if the payee fails to furnishyou with his or her correct taxpayer identification number(TIN). This withholding is referred to as “backup withholding.”Payments subject to backup withholding include interest, dividends, patronage dividends, rents, royalties, commissions, nonemployee compensation, and certain otherpayments you make in the course of your trade or business. In addition, transactions by brokers and barter exchanges and certain payments made by fishing boat operators are subject to backup withholding.Backup withholding does not apply to wages,pensions, annuities, IRAs (including simplifiedCAUTIONemployee pension (SEP) and SIMPLE retirementplans), section 404(k) distributions from an employeestock ownership plan (ESOP), medical savings accounts,health savings accounts, long-term-care benefits, or realestate transactions.!You can use Form W-9 or Formulario W-9(SP) to request payees to furnish a TIN and to certify the numberfurnished is correct. You can also use Form W-9 or Formulario W-9(SP) to get certifications from payees thatthey are not subject to backup withholding or that they areexempt from backup withholding. The Instructions for theRequester of Form W-9 or Formulario W-9(SP) includes alist of types of payees who are exempt from backup withholding. For more information, see Publication 1281,Backup Withholding for Missing and Incorrect Name/TIN(s).Gambling winnings.Indian gaming profits.Certain government payments, such asunemployment compensation, social security, andTier 1 railroad retirement benefits, subject to voluntarywithholding.Payments subject to backup withholding.For details on depositing and reporting nonpayrollincome tax withholding, see the Instructions for Form 945.All income tax withholding reported on Form W-2 mustbe reported on Form 941, Form 943, Employer's AnnualFederal Tax Return for Agricultural Employees, Form 944,or Schedule H (Form 1040), Household EmploymentTaxes.Distributions from nonqualified pension plans anddeferred compensation plans. Because distributions toPublication 15 (2014)RecordkeepingKeep all records of employment taxes for at least 4 years.These should be available for IRS review. Your recordsshould include the following information.Your EIN.Amounts and dates of all wage, annuity, and pensionpayments.Amounts of tips reported to you by your employees.Records of allocated tips.The fair market value of in-kind wages paid.Names, addresses, social security numbers, andoccupations of employees and recipients.Page 5Any employee copies of Forms W-2 and W-2creturned to you as undeliverable.Dates of employment for each employee.Periods for which employees and recipients were paidwhile absent due to sickness or injury and the amountand weekly rate of payments you or third party payorsmade to them.Copies of employees' and recipients' income taxwithholding allowance certificates (Forms W-4, W-4P,W-4(SP), W-4S, and W-4V).Copies of employees' Earned Income Credit AdvancePayment Certificates (Forms W-5 and W-5(SP)).Dates and amounts of tax deposits you made andacknowledgment numbers for deposits made byEFTPS.Copies of returns filed and confirmation numbers.Records of fringe benefits and expensereimbursements provided to your employees,including substantiation.Change of Business Addressor Responsible PartyTo notify the IRS of a change in business address orresponsible party, file Form 8822-B. Do not mail Form8822-B with your employment tax return.Private Delivery ServicesYou can use cert...

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