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Publication 15-A
taxmap/pubs/p15a-006.htm#en_us_publink1000169607

7. Special Rules for Paying Taxes(p21)

For Use in Calendar Year 2014
rule
taxmap/pubs/p15a-006.htm#en_us_publink1000169608

Common Paymaster(p21)

For Use in Calendar Year 2014
rule
If two or more related corporations employ the same individual at the same time and pay this individual through a common paymaster that is one of the corporations, the corporations are considered to be a single employer. They have to pay, in total, no more in social security tax than a single employer would pay.
Each corporation must pay its own part of the employment taxes and may deduct only its own part of the wages. The deductions will not be allowed unless the corporation reimburses the common paymaster for the wage and tax payments. See Regulations section 31.3121(s)-1 for more information. The common paymaster is responsible for filing information and tax returns and issuing Forms W-2 with respect to wages it is considered to have paid as a common paymaster.
taxmap/pubs/p15a-006.htm#en_us_publink1000256026

Agents(p21)

For Use in Calendar Year 2014
rule
Employers and payers must use Form 2678 to request approval for an agent to file returns and make deposits or payments of their employment or other withholding taxes. See Revenue Procedure 70-6, 1970-1 C.B. 420, Revenue Procedure 84-33, 1984-1 C.B. 502, and the General Instructions for Forms W-2 and W-3 for procedures and reporting requirements. Form 2678 does not apply to FUTA taxes reportable on Form 940 unless the employer is a home care service recipient receiving home care services through a program administered by a federal, state, or local government agency. Agents filing an aggregate Form 940 must file Schedule R (Form 940). Agents filing an aggregate Form 941 must file Schedule R (Form 941).
See Revenue Procedure 2013-39, 2013-52 I.R.B. 830, available at www.irs.gov/irb/2013-52_IRB/ar15.html for updates to the procedures for requesting the IRS to authorize a person to act as an agent.
taxmap/pubs/p15a-006.htm#en_us_publink1000169609

Reporting Agents(p21)

For Use in Calendar Year 2014
rule
taxmap/pubs/p15a-006.htm#en_us_publink1000255212

Electronic filing of Forms 940, 941, and 944.(p21)

For Use in Calendar Year 2014
rule
Reporting agents may file Forms 940, 941, and 944 electronically. For details, see Publication 3112, IRS e-file Application and Participation. For information on electronic filing of Forms 940, 941, and 944, see Revenue Procedure 2007-40, 2007-26 I.R.B., 1488, available at www.irs.gov/irb/2007-26_IRB/ar13.html. For more information on electronic filing, visit the IRS website at www.irs.gov/efile or call 1-866-255-0654.
taxmap/pubs/p15a-006.htm#en_us_publink1000169614

Employee's Portion of Taxes Paid by Employer(p21)

For Use in Calendar Year 2014
rule
EIC
The information provided in this section does not take into account an employer that chooses to pay the Additional Medicare Tax on behalf of the employee.
If you pay your employee's social security and Medicare taxes without deducting them from the employee's pay, you must include the amount of the payments in the employee's wages for federal income tax withholding and social security, Medicare, and FUTA taxes. This increase in the employee's wages for your payment of the employee's social security and Medicare taxes is also subject to employee social security and Medicare taxes. This again increases the amount of the additional taxes you must pay.
To figure the employee's increased wages in this situation, divide the stated pay (the amount that you pay without taking into account your payment of employee social security and Medicare taxes) by a factor for that year. This factor is determined by subtracting from 1 the combined employee social security and Medicare tax rate for the year that the wages are paid. For 2014, the factor is .9235 (1 − .0765). If the stated pay is more than $108,049.50 (2014 wage base $117,000 × .9235), follow the procedure described under Stated pay of more than $108,049.50 in 2014 below.
taxmap/pubs/p15a-006.htm#en_us_publink1000268257

Stated pay of $108,049.50 or less in 2014.(p22)

For Use in Calendar Year 2014
rule
For an employee with stated pay of $108,049.50 or less in 2014, figure the correct wages (wages plus employer-paid employee taxes) to report by dividing the stated pay by .9235. This will give you the wages to report in box 1 and the social security and Medicare wages to report in boxes 3 and 5 of Form W-2.
On Form W-2, to figure the correct social security tax to enter in box 4, multiply the amount in box 3 by the social security withholding rate of 6.2% and enter the result in box 4. To figure the correct Medicare tax to enter in box 6, multiply the amount in box 5 by the Medicare withholding rate of 1.45% and enter the result in box 6.
taxmap/pubs/p15a-006.htm#en_us_publink1000268258

Example. (p22)

Donald Devon hires Lydia Lone for only one week during 2014. He pays her $500 for that week. Donald agrees to pay Lydia's part of the social security and Medicare taxes. To figure her reportable wages, he divides $500 by .9235. The result, $541.42, is the amount that he reports as wages in boxes 1, 3, and 5 of Form W-2. To figure the amount to report as social security tax, Donald multiplies $541.42 by the social security tax rate of 6.2% (.062). The result, $33.57, is entered in box 4 of Form W-2. To figure the amount to report as Medicare tax, Donald multiplies $541.42 by the Medicare tax rate of 1.45% (.0145). The result, $7.85, is entered in box 6 of Form W-2. Although he did not actually withhold the amounts from Lydia, he will report these amounts as taxes withheld on Form 941 or Form 944 and is responsible for the employer share of these taxes.
For FUTA tax and federal income tax withholding, Lydia's weekly wages are $541.42.
taxmap/pubs/p15a-006.htm#en_us_publink1000268259

Stated pay of more than $108,049.50 in 2014.(p22)

For Use in Calendar Year 2014
rule
For an employee with stated pay of more than $108,049.50 in 2014, the portion of stated wages subject to social security tax is $108,049.50 (the first $117,000 of wages × .9235). The stated pay in excess of $108,049.50 is not subject to social security tax because the tax only applies to the first $117,000 of wages (stated pay plus employer-paid employee taxes). Enter $117,000 in box 3 of Form W-2. The social security tax to enter in box 4 is $7,254.00 ($117,000 x .062).
To figure the correct Medicare wages to enter in box 5 of Form W-2, subtract $108,049.50 from the stated pay. Divide the result by .9855 (1 − .0145) and add $117,000.00.
For example, if stated pay is $110,000.00, the correct Medicare wages are figured as follows.
The Medicare wages are $118,979.20. Enter this amount in box 5 of Form W-2. The Medicare tax to enter in box 6 is $1,725.20 ($118,979.20 × .0145).
Although these employment tax amounts are not actually withheld from the employee's pay, report them as withheld on Form 941, and pay this amount as the employer's share of the social security and Medicare taxes. If the wages for federal income tax withholding purposes in the preceding example are the same as for social security and Medicare tax purposes, the correct wage amount for federal income tax withholding is $118,979.20 ($110,000 + $7,254.00 + $1,725.20), which is included in box 1 of Form W-2.
taxmap/pubs/p15a-006.htm#en_us_publink1000169619

Household and agricultural employees.(p22)

For Use in Calendar Year 2014
rule
The discussion above does not apply to household and agricultural employers. If you pay a household or agricultural employee's social security and Medicare taxes, these payments must be included in the employee's wages. However, this wage increase due to the tax payments made for the employee is not subject to social security or Medicare taxes as discussed in this section.
taxmap/pubs/p15a-006.htm#en_us_publink1000169620

Tax deposits and Form 941 or Form 944.(p22)

For Use in Calendar Year 2014
rule
If you pay your employee's portion of his or her social security and Medicare taxes rather than deducting them from his or her pay, you are liable for timely depositing or paying the increased taxes associated with the wage increase. Also, report the increased wages on the appropriate lines of Form 941 for the quarter during which the wages were paid or on Form 944 for the year during which the wages were paid.
taxmap/pubs/p15a-006.htm#en_us_publink1000169621

International Social Security Agreements(p22)

For Use in Calendar Year 2014
rule
The United States has bilateral social security agreements with many countries to eliminate dual taxation and coverage under two social security systems. Under these agreements, sometimes known as totalization agreements, employees generally must pay social security taxes only to the country where they work. Employees and employers who are subject to foreign social security taxes under these agreements are potentially exempt from U.S. social security taxes, including the Medicare portion. For more information, visit the SSA website at www.socialsecurity.gov/international, or see Publication 519, U.S. Tax Guide for Aliens.