1. Employer Tax Guide

The IRS has published the new 2015 Circular E, also known as the Employers Tax Guide. The 69 page general manual includes rules and regulations for payroll tax compliance and filing as well as new withholding tables for 2015 including percentage method tables. About Time & Pay: Time & Pay is a professional provider located in Johnson City, TN. We service businesses of all sizes and types throughout the United States.

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This publication includes the 2018 Percentage Method Tables and Wage Bracket Method Tables for Income Tax Withholding. The 2018 withholding tables incorporate changes to the individual tax rates based on tax legislation enacted on December 22, 2017 (P.L. Employers should implement the 2018 withholding tables as soon as possible, but not later than February 15, 2018. Continue to use the 2017 withholding tables until you implement the 2018 withholding tables.

The new withholding tables are designed to work with the Forms W-4, Employee's Withholding Allowance Certificate, that your employees previously gave you. To help employees determine their withholding, the IRS is revising the withholding tax calculator available. The IRS anticipates that this calculator will be available by the end of February.

Encourage your employees to use the withholding calculator to determine if they should give you a new Form W-4 for 2018. The IRS is also working on revising Form W-4 for 2018. The calculator and revised Form W-4 can be used by employees who wish to update their withholding in response to the new law or changes in their personal circumstances in 2018, and by workers starting a new job. Until a new Form W-4 is issued, employees and employers should continue to use the 2017 Form W-4. For more information, go to. An employee who experiences a change of status that causes a reduction in the number of withholding allowances isn't required to give his or her employer a new Form W-4 until 30 days after the 2018 Form W-4 is released.

An employee that has a reduction in the number of withholding allowances solely due to changes from P.L. 115-97 isn't required to give his or her employer a new Form W-4 during 2018 but may do so at any time. Employees may use the 2017 Form W-4 to report changes to withholding allowances until 30 days after the 2018 Form W-4 is released. New employees may continue to claim allowances on the 2017 Form W-4 until 30 days after the 2018 Form W-4 is released. Employees who submit new Forms W-4 for 2018 using the 2017 Form W-4 don't need to resubmit a 2018 Form W-4 when the 2018 Form W-4 is released. Generally, an employee may claim exemption from federal income tax withholding because he or she had no federal income tax liability last year and expects none this year. To continue to be exempt from withholding in 2018, an employee must give you a new Form W-4 by February 28, 2018.

However, the 2018 Form W-4 may not be available before February 28, 2018. Employees may claim exemption from withholding for 2018 using the 2017 Form W-4 until 30 days after the 2018 Form W-4 is released. The 2017 Form W-4 must be (1) edited by striking '2017' in the text on line 7 and entering '2018' in its place, (2) completed by entering 'Exempt 2018' on line 7, or (3) not edited but signed in 2018 and submitted under procedures established by the employer for the employee to certify entitlement to exempt status for 2018 by using the 2017 Form W-4 to claim exemption from withholding for 2018.

In addition to 1–3 above, the employee can use any substantially similar method to 1–3 that clearly conveys in writing the employee's intent to certify his or her exemption from withholding for 2018. Employers that have established electronic systems for furnishing withholding allowance certificates may change their electronic systems to substantially conform with the options discussed above. 115-97 suspends the exclusion for qualified moving expense reimbursements from your employee's income beginning after December 31, 2017, and before January 1, 2026. However, the exclusion is still available in the case of a member of the U.S. Armed Forces on active duty who moves because of a permanent change of station. The exclusion applies only to reimbursement of moving expenses that the member could deduct if he or she had paid or incurred them without reimbursement. See Moving Expenses in Pub., Armed Forces' Tax Guide, for the definition of what constitutes a permanent change of station and to learn which moving expenses are deductible.

Disaster tax relief was enacted for those impacted by Hurricane Harvey, Irma, or Maria. Additionally, the IRS has provided special relief designed to support employer leave-based donation programs to aid the victims of these hurricanes and to aid the victims of the California wildfires that began October 8, 2017. For more information about disaster relief, including the treatment of amounts paid to qualified tax-exempt organizations under employer leave-based donation programs, see Pub. For tax years beginning after December 31, 2015, a qualified small business may elect to claim up to $250,000 of its credit for increasing research activities as a payroll tax credit against the employer’s share of social security tax. The portion of the credit used against the employer’s share of social security tax is allowed in the first calendar quarter beginning after the date that the qualified small business filed its income tax return. The election and determination of the credit amount that will be used against the employer's share of social security tax are made on Form 6765, Credit for Increasing Research Activities.

The amount from Form 6765, line 44, must then be reported on Form 8974, Qualified Small Business Payroll Tax Credit for Increasing Research Activities. Form 8974 is used to determine the amount of the credit that can be used in the current quarter. The amount from Form 8974, line 12, is reported on Form 941 or 941-SS, line 11 (or Form 944, line 8). For more information about the payroll tax credit, see Notice 2017-23, 2017-16 I.R.B. 1100, available.

Also see the line 16 instructions in the Instructions for Form 941 (line 13 instructions in the Instructions for Form 944). The Tax Increase Prevention Act of 2014 required the IRS to establish a voluntary certification program for professional employer organizations (PEOs). PEOs handle various payroll administration and tax reporting responsibilities for their business clients and are typically paid a fee based on payroll costs. To become and remain certified under the certification program, certified professional employer organizations (CPEOs) must meet various requirements described in sections 3511 and 7705 and related published guidance. Certification as a CPEO may affect the employment tax liabilities of both the CPEO and its customers.

A CPEO is generally treated as the employer of any individual who performs services for a customer of the CPEO and is covered by a contract described in section 7705(e)(2) between the CPEO and the customer (CPEO contract), but only for wages and other compensation paid to the individual by the CPEO. For more information, go to. Also see Revenue Procedure 2017-14, 2017-3, I.R.B.

426, available. Effective for tax periods beginning after December 31, 2013, the credit for COBRA premium assistance payments can't be claimed on Form 941, Employer's QUARTERLY Federal Tax Return (or Form 944, Employer's ANNUAL Federal Tax Return).

Instead, after filing your Form 941 (or Form 944), file Form 941-X, Adjusted Employer's QUARTERLY Federal Tax Return or Claim for Refund (or Form 944-X, Adjusted Employer's ANNUAL Federal Tax Return or Claim for Refund), respectively, to claim the COBRA premium assistance credit. Filing a Form 941-X (or Form 944-X) before filing a Form 941 (or Form 944) for the return period may result in errors or delays in processing your Form 941-X (or Form 944-X). For more information, see the Instructions for Form 941 (or the Instructions for Form 944), or go to. A marriage of two individuals is recognized for federal tax purposes if the marriage is recognized by the state, possession, or territory of the United States in which the marriage is entered into, regardless of legal residence.

Two individuals who enter into a relationship that is denominated as marriage under the laws of a foreign jurisdiction are recognized as married for federal tax purposes if the relationship would be recognized as marriage under the laws of at least one state, possession, or territory of the United States, regardless of legal residence. Individuals who have entered into a registered domestic partnership, civil union, or other similar relationship that isn't denominated as a marriage under the law of the state, possession, or territory of the United States where such relationship was entered into aren't lawfully married for federal tax purposes, regardless of legal residence. Generally, you’re responsible to ensure that tax returns are filed and deposits and payments are made, even if you contract with a third party to perform these acts.

You remain responsible if the third party fails to perform any required action. If you choose to outsource any of your payroll and related tax duties (that is, withholding, reporting, and paying over social security, Medicare, FUTA, and income taxes) to a third-party payer, such as a payroll service provider or reporting agent, go to for helpful information on this topic. If a CPEO pays wages and other compensation to an individual performing services for you, and the services are covered by a contract described in section 7705(e)(2) between you and the CPEO (CPEO contract), then the CPEO is generally treated as the employer, but only for wages and other compensation paid to the individual by the CPEO. However, with respect to certain employees covered by a CPEO contract, a customer may also be treated as an employer of the employees and, consequently, may also be liable for federal employment taxes imposed on wages and other compensation paid by the CPEO to such employees.

For more information on the different types of third-party payer arrangements, see. You must use EFT to make all federal tax deposits. Generally, an EFT is made using the Electronic Federal Tax Payment System (EFTPS). If you don't want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. EFTPS is a free service provided by the Department of Treasury.

Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Agents and CPEOs must complete Schedule R (Form 941), Allocation Schedule for Aggregate Form 941 Filers, when filing an aggregate Form 941.

Employer Tax Guide

Aggregate Forms 941 are filed by agents approved by the IRS under section 3504 of the Internal Revenue Code (IRC). To request approval to act as an agent for an employer, the agent files Form 2678 with the IRS. Aggregate Forms 941 are also filed by CPEOs approved by the IRS under section 7705. CPEOs file Form 8973, Certified Professional Employer Organization/Customer Reporting Agreement, to notify the IRS that they’ve started or ended a service contract with a client or customer. Agents and CPEOs must complete Schedule R (Form 940), Allocation Schedule for Aggregate Form 940 Filers, when filing an aggregate Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. Aggregate Forms 940 can be filed by agents acting on behalf of home care service recipients who receive home care services through a program administered by a federal, state, or local government. To request approval to act as an agent on behalf of home care service recipients, the agent files Form 2678 with the IRS.

Aggregate Forms 940 are also filed by CPEOs approved by the IRS under section 7705. CPEOs file Form 8973 to notify the IRS that they’ve started or ended a service contract with a client or customer. In 2018, withhold from periodic pension and annuity payments as if the recipient is married claiming three withholding allowances, unless he or she has provided Form W-4P, Withholding Certificate for Pension or Annuity Payments, either electing no withholding or giving a different number of allowances, marital status, or an additional amount to be withheld. Don't withhold on direct rollovers from qualified plans or governmental section 457(b) plans. See and Pub., Employer's Supplemental Tax Guide.A includes information about withholding on pensions and annuities. Employer Responsibilities Employer Responsibilities: The following list provides a brief summary of your basic responsibilities.

Because the individual circumstances for each employer can vary greatly, responsibilities for withholding, depositing, and reporting employment taxes can differ. Each item in this list has a page reference to a more detailed discussion in this publication. You may be required to file information returns to report certain types of payments made during the year. For example, you must file Form 1099-MISC, Miscellaneous Income, to report payments of $600 or more to persons not treated as employees (for example, independent contractors) for services performed for your trade or business. For details about filing Forms 1099 and for information about required electronic filing, see the General Instructions for Certain Information Returns for general information and the separate, specific instructions for each information return you file (for example, Instructions for Form 1099-MISC).

Generally, don't use Forms 1099 to report wages and other compensation you paid to employees; report these on Form W-2. See the General Instructions for Forms W-2 and W-3 for details about filing Form W-2 and for information about required electronic filing. If you file 250 or more Forms 1099-MISC, you must file them electronically. If you file 250 or more Forms W-2, you must file them electronically. Electronic filing is the only form of magnetic media that the IRS and SSA will accept. The IRS operates an information return customer service site to answer questions about reporting on Forms W-2, W-3, 1099, and other information returns. If you have questions related to reporting on information returns, call 1-866-455-7438 (toll free), 304-263-8700 (toll call), or 304-579-4827 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability).

The center can also be reached by email. Don't include tax identification numbers (TINs) or attachments in email correspondence because electronic mail isn't secure. Nonpayroll Income Tax Withholding. Nonpayroll federal income tax withholding (reported on Forms 1099 and Form W-2G, Certain Gambling Winnings) must be reported on Form 945, Annual Return of Withheld Federal Income Tax. Separate deposits are required for payroll (Form 941 or Form 944) and nonpayroll (Form 945) withholding. Nonpayroll items include:. Pensions (including distributions from tax-favored retirement plans, for example, section 401(k), section 403(b), and governmental section 457(b) plans), annuities, and IRA distributions.

Military retirement. Gambling winnings. Indian gaming profits. Certain government payments on which the recipient elected voluntary income tax withholding. Dividends and other distributions by an ANC on which the recipient elected voluntary income tax withholding. Payments subject to backup withholding.

Because distributions to participants from some nonqualified pension plans and deferred compensation plans (including section 457(b) plans of tax-exempt organizations) are treated as wages and are reported on Form W-2, income tax withheld must be reported on Form 941 or Form 944, not on Form 945. However, distributions from such plans to a beneficiary or estate of a deceased employee aren't wages and are reported on Forms 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.; income tax withheld must be reported on Form 945. You can use Form W-9 or Formulario W-9(SP) to request payees to furnish a TIN.

Form W-9 or Formulario W-9 (SP) must be used when payees must certify that the number furnished is correct, or when payees must certify that they’re not subject to backup withholding or are exempt from backup withholding. The Instructions for the Requester of Form W-9 or Formulario W-9(SP) includes a list of types of payees who are exempt from backup withholding. For more information, see Pub., Backup Withholding for Missing and Incorrect Name/TIN(s). Keep all records of employment taxes for at least 4 years.

These should be available for IRS review. Your records should include the following information. Amounts and dates of all wage, annuity, and pension payments. Amounts of tips reported to you by your employees. Records of allocated tips. The fair market value of in-kind wages paid. Names, addresses, SSNs, and occupations of employees and recipients.

Any employee copies of Forms W-2 and W-2c returned to you as undeliverable. Dates of employment for each employee. Periods for which employees and recipients were paid while absent due to sickness or injury and the amount and weekly rate of payments you or third-party payors made to them. Copies of employees' and recipients' income tax withholding allowance certificates (Forms W-4, W-4P, W-4(SP), W-4S, and W-4V).

Dates and amounts of tax deposits you made and acknowledgment numbers for deposits made by EFTPS. Copies of returns filed and confirmation numbers.

Records of fringe benefits and expense reimbursements provided to your employees, including substantiation. Change of Business Name.