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Publication 225

Chapter 13
Employment Taxes(p77)

What's New for 2015(p77)

Social security and Medicare tax for 2015.(p77)
The social security tax rate is 6.2% each for the employee and employer, unchanged from 2014. The social security wage base limit is $118,500.
The Medicare tax rate is 1.45% each for the employee and employer, unchanged from 2014. There is no wage base limit for Medicare tax.

What's New for 2016(p77)

Social security and Medicare tax for 2016.(p77)
The employee and employer tax rates for social security and the maximum amount of wages subject to social security tax for 2016 will be discussed in Pub. 51 (For use in 2016).
The Medicare tax rate for 2016 will also be discussed in Pub. 51 (For use in 2016). There is no limit on the amount of wages subject to Medicare tax.


Additional employment tax information for farmers.(p77)
See Pub. 51 for more detailed guidance on employment taxes. For the latest information about employment tax developments impacting farmers, go to
Correcting a previously filed Form 943.(p77)
If you discover an error on a previously filed Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, make the correction using Form 943-X, Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund. Form 943-X is filed separately from Form 943. For more information on correcting Form 943, see the Instructions for Form 943-X.
Federal tax deposits must be made by electronic funds transfer (EFT).(p77)
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.
For more information on making federal tax deposits, see section 7 of Pub. 51. To get more information about EFTPS or to enroll in EFTPS, visit or call 1-800-555-4477 or 1-800-733-4829 (TDD). Additional information about EFTPS is also available in Pub. 966.
Electronic filing and payment.(p77)
Now, more than ever before, businesses can enjoy the benefits of filing tax returns and paying their federal taxes electronically. Whether you rely on a tax professional or handle your own taxes, the IRS offers you convenient programs to make filing and paying easier. Spend less time and worry on taxes and more time running your business. Use e-file and EFTPS to your benefit.
  • For EFTPS, visit or call EFTPS Customer Service at 1-800-555-4477 or 1-800-733-4829 (TDD) for additional information.
  • For electronic filing of Form W-2, Wage and Tax Statement, visit

Important Dates for 2016(p77)

You should take the action indicated by the dates listed. See By February 15 and On February 16 for Form W-4, Employee's Withholding Allowance Certificate, information. Due dates for deposits of withheld federal income taxes, social security taxes, and Medicare taxes aren't listed here. For these dates, see Pub. 509 (For use in 2016).
If any date shown below for filing a return, furnishing a form, or depositing taxes falls on a Saturday, Sunday, or legal holiday, the due date is the next business day. A statewide legal holiday delays a filing or furnishing due date only if the IRS office where you are required to file a return or furnish a form is located in that state. For any due date, you will meet the "file" or "furnish" date requirement if the envelope containing the tax return or form is properly addressed, contains sufficient postage, and is postmarked by the U.S. Postal Service by the due date, or sent by an IRS-designated delivery service by the due date. See Private delivery services in Pub. 51.
Federal tax deposits can only be made by EFT and are governed by legal holidays in the District of Columbia. For a list of legal holidays that delay the due date of a federal tax deposit, see section 7 of Pub. 51.
Fiscal year taxpayers.(p77)
The due dates listed below apply whether you use a calendar or a fiscal year.
By January 31(p77)
  • File Form 943 with the IRS. If you deposited all Form 943 taxes when due, you may file Form 943 by February 10.
  • Furnish each employee with a completed Form W-2.
  • Furnish each recipient to whom you paid $600 or more in nonemployee compensation with a completed Form 1099 (for example, Form 1099-MISC, Miscellaneous Income).
  • File Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, with the IRS. If you deposited all the FUTA tax when due, you may file Form 940 by February 10.
  • File Form 945, Annual Return of Withheld Federal Income Tax, with the IRS to report any nonpayroll income tax withheld during 2015. If you deposited all Form 945 taxes when due, you may file Form 945 by February 10.
By February 15(p77)
Ask for a new Form W-4 or Formulario W-4(SP) from each employee who claimed exemption from federal income tax withholding last year.
On February 16(p77)
Any Form W-4 claiming exemption from withholding for the previous year has now expired. Begin withholding for any employee who previously claimed exemption from withholding but hasn't given you a new Form W-4 for the current year. If the employee doesn't give you a new Form W-4, withhold taxes based on the last valid Form W-4 you have for the employee that doesn't claim exemption from withholding or, if one doesn't exist, as if he or she is single with zero withholding allowances. If the employee furnishes a new Form W-4 claiming exemption from withholding after February 15, you may apply the exemption to future wages, but don't refund taxes withheld while the exempt status wasn't in place.
By February 28(p77)
File paper Forms 1099 and 1096. File Copy A of all paper Forms 1099 with Form 1096, Annual Summary and Transmittal of U.S. Information Returns, with the IRS. For electronically filed returns, see By March 31 below.
File paper Forms W-2 and W-3. File Copy A of all paper Forms W-2 with Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration (SSA). For electronically filed returns, see By March 31 below.
By March 31(p77)
File electronic Forms W-2 and 1099. File electronic Forms W-2 with the SSA and Forms 1099 with the IRS. For more information on reporting Form W-2 information to the SSA electronically, visit the SSA's Employer W-2 Filing Instructions & Information webpage at For information on filing information returns electronically with the IRS, see Pub. 1220.
By April 30, July 31, October 31, and January 31(p77)
Deposit FUTA taxes. Deposit FUTA tax due if it is more than $500.
Before December 1(p77)
Remind employees to submit a new Form W-4 if their withholding allowances have changed or will change for the next year.


You are generally required to withhold federal income tax from the wages of your employees. You may also be subject to social security and Medicare taxes under the Federal Insurance Contributions Act (FICA) and federal unemployment tax under the Federal Unemployment Tax Act (FUTA). You must also withhold Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. This chapter includes information about these taxes.
You must also pay self-employment tax on your net earnings from farming. See chapter 12 for information on self-employment tax.


Useful items

You may want to see:

 15 Employer's Tax Guide
 15-A Employer's Supplemental Tax Guide
 15-B Employer's Tax Guide to Fringe Benefits
 51 Agricultural Employer's Tax Guide
 926 Household Employer's Tax Guide
Form (and Instructions)
 W-2: Wage and Tax Statement
 W-4: Employee's Withholding Allowance Certificate
 W-9: Request for Taxpayer Identification Number and Certification
 940: Employer's Annual Federal Unemployment (FUTA) Tax Return
 943: Employer's Annual Federal Tax Return for Agricultural Employees
 943-X: Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund
See chapter 16 for information about getting publications and forms.

Farm Employment(p78)

In general, you are an employer of farmworkers if your employees do any of the following types of work. For more information, see Pub. 51.
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. This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed. You are responsible for withholding and paying employment taxes for your employees. You are also required to file employment tax returns. These requirements don't apply to amounts that you pay to independent contractors. See Pub. 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee.
If you employ a family of workers, each worker subject to your control (not just the head of the family) is an employee.
Special rules apply to crew leaders. See Crew Leaders, later.

Employer identification number (EIN).(p78)

If you have employees, you must have an EIN. If you don't have an EIN, you may apply for one online. Go to and type "EIN" in the search box. You may also apply for an EIN by faxing or mailing Form SS-4 to the IRS.

Employee's social security number (SSN).(p78)

An employee who doesn't have an SSN should submit Form SS-5, Application for a Social Security Card, to the SSA. Form SS-5 is available from any SSA office or by calling 1-800-772-1213 (operates 24 hours per day). It is also available from the SSA's website at
The employee must furnish evidence of age, identity, and U.S. citizenship or lawful immigration status permitting employment with the Form SS-5. An employee who is age 18 or older must appear in person with this evidence at an SSA office.

Form I-9.(p78)

You must verify that each new employee is legally eligible to work in the United States. This includes completing Form I-9, Employment Eligibility Verification. Form I-9 is available from the U.S. Citizenship and Immigration Services (USCIS) offices or by calling the Bureau of Citizenship and Immigration Services Forms Request Line at 1-800-870-3676. Form I-9 is also available from the USCIS website at You can also contact the USCIS at 1-800-375-5283 for more information.

Form W-4.(p78)

You should give each new employee a Form W-4 as soon as you hire the employee. For Spanish-speaking employees, you may use Formulario W-4(SP) which is the Spanish translation of Form W-4. Have the employee complete and return the form to you before the first payday. If the employee doesn't return the completed form, you must withhold federal income tax as if the employee is single and claims no withholding allowances.

New hire reporting.(p78)

You are required to report any new employee to a designated state new hire registry. A new employee is an employee who has not previously been employed by you or was previously employed by you but has been separated from such prior employment for at least 60 consecutive days. Many states accept a copy of Form W-4 with employer information added. Visit the Office of Child Support Enforcement website at for more information.