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IRS Tax Map 2008
Current IRS Tax Map

Rev. date: 09/2006


Federal Employment Tax in Puerto Rico

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Tele-Tax Topic 903
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Employers in Puerto Rico are subject to the taxes imposed by the Federal Income Contribution Act (FICA) (Social Security and Medicare taxes) and the Federal Unemployment Tax (FUTA). An employer is a person or organization for whom a worker performs services as an employee. As an employer you are required to withhold, report, and pay employment taxes.
To file the various employment tax returns, you need an Employer Identification Number (EIN). To obtain an EIN you need to file Form SS-4 (PR).
FICA taxes are used to finance the Social Security and Medicare systems. You must withhold FICA taxes from your employees' salary and contribute your employer's share. The FICA taxes consist of two components: the Social Security tax and the Medicare tax.
The forms used to file the Social Security and Medicare taxes in Puerto Rico are: Form 941 (PR), Form 943 (PR), Form 944-PR, and Form 1040 (PR) (Anejo H-PR) for household employers.
If you are not an agricultural employer and all of your employees are bona fide residents of Puerto Rico, file Form 941-PR to report all salaries paid, tips your employees reported to you, and Social Security and Medicare taxes you withheld. This tax return is filed quarterly and is due the last day of the month following the end of the quarter. For example, wages you paid January through March (the first quarter of the year) must be reported on Form 941-PR by April 30.
If you are not an agricultural employer and all of your employees are bona fide residents of Puerto Rico and you were notified to file Form 944-PR, file Form 944-PR to report all salaries paid, tips your employees reported to you, and Social Security and Medicare taxes you withheld. This tax return is filed annually and is due the last day of January following the end of the tax year.
If you think you are eligible to file Form 944-PR but did not receive a notification from the IRS advising you to change to the 944-PR annual filing requirement, please call the IRS at 800-829-0115 so we can establish you as a Form 944-PR filer.
Most employers are required to deposit their FICA taxes before Form 941-PR is filed. If you are filing Form 944-PR, you may be able to pay your FICA taxes with your return. For additional information about Form 941-PR, refer to Tax Topic 758, in English. For more information about the Form 944-PR, refer to the Form 944-PR Instructions in Spanish. For information about the rules to make deposits, refer to Tax Topic 757, in English.


Household Employees


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If you pay a household employee cash wages, you may be required to withhold and pay FICA taxes on all wages you pay to that employee. To see if you are required to withhold and pay these taxes, see Publication 926, Household Employer's Tax Guide, in English. File Form 1040 (PR) (Anejo H-PR) to report and pay Social Security and Medicare taxes corresponding to the employer and the employee for all household employees.
Household employees include housekeepers, maids, baby-sitters, gardeners, and others who work in or around your residence as your employee. Repairmen, plumbers, contractors, and other business people who are self-employed and own their equipment and control how the work is performed, normally are not considered household employees


Agricultural Employees


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If you are an agricultural employer in Puerto Rico, you must file Form 943 (PR) to report the employer's and the employee's share of the FICA taxes for agricultural employees. To see if you are required to withhold and pay FICA taxes on your agricultural employees, refer to Publication 51, Agricultural Employer's Tax Guide, in English. Form 943-PR is an annual return you file at the end of each calendar year and is due January 31. Most employers are required to deposit their FICA taxes and taxes withheld before the Form 943-PR is filed.
Publication 15Publication 179 (Spanish version) explain the requirements for deposits.


Federal Unemployment Taxes (FUTA):


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If you are an employer in Puerto Rico, you might have to file a Federal Unemployment Tax Return. To see if you are required to pay FUTA taxes, refer to Publication 51 if you are an agricultural employer or Publication 926 if you are a household employer. All other employers should refer to Publication 15 or Publication 179 (Spanish version). With the exception of those who use Schedule H-PR (Form 1040) for household employees, employers in Puerto Rico who are subject to FUTA are required to file Form 940-PR to report and pay FUTA taxes. Form 940 (PR) is generally due by January 31. Most employers are required to deposit FUTA taxes. FUTA taxes are not withheld from the employee' salaries.