Topic 752 – Filing Forms W-2 and W-3
Form W-2

Employers must complete, file electronically or by mail with the Social Security Administration (SSA), and furnish to their employees Form W-2 (PDF), Wage and Tax Statement, showing the wages paid and taxes withheld for the year for each employee. Because Form W-2 is the only document used to transmit…[Read more]

Topic 753 – Form W-4 – Employee’s Withholding Allowance Certificate
General Information

When you hire an employee, you must have the employee complete a Form W-4 (PDF), Employee’s Withholding Allowance Certificate. Form W-4 tells you, as the employer, the marital status, the number of withholding allowances, and any additional amount to use w…[Read more]

Topic 755 – Employer Identification Number (EIN) – How to Apply
An employer identification number (EIN) is a nine-digit number assigned by the IRS. It’s used to identify the tax accounts of employers and certain others who have no employees. The IRS uses the number to identify taxpayers who are required to file various business tax returns. EINs a…[Read more]

Topic 756 – Employment Taxes for Household Employees
Household employees include housekeepers, maids, babysitters, gardeners, and others who work in or around your private residence as your employee. Repairmen, plumbers, contractors, and other business people who provide their services as independent contractors, are not your employees. Household…[Read more]

Topic 757 – Forms 941 and 944 – Deposit Requirements
Generally, employers are required to deposit the employment taxes reported on Forms 941, Employer’s QUARTERLY Federal Tax Return, or Form 944 (PDF), Employer’s ANNUAL Federal Tax Return. Both forms report federal income tax withheld from your employees, along with the employer’s and employee’s s…[Read more]

Topic 758 – Form 941 – Employer’s Quarterly Federal Tax Return and Form 944 – Employer’s Annual Federal Tax Return
Generally, you must file Form 941 (PDF), Employer’s QUARTERLY Federal Tax Return, or Form 944 (PDF), Employer’s ANNUAL Federal Tax Return, to report wages you’ve paid and tips your employees have reported to you, as well as emp…[Read more]

Topic 759 – Form 940 – Employer’s Annual Federal Unemployment (FUTA) Tax Return – Filing and Deposit Requirements
Who Must File Form 940?

Most employers pay both a federal (FUTA) and a state unemployment tax. There are three tests used to determine whether you must pay FUTA tax: a general test, household employees test, and farm workers emp…[Read more]

Topic 760 – Form 943 – Reporting and Deposit Requirements for Agricultural Employers
Employers who paid wages to agricultural employees that are subject to income tax, social security or Medicare withholding must file a Form 943 (PDF), Employer’s Annual Federal Tax Return for Agricultural Employees, to report those wages.

Additionally, you’re sub…[Read more]

Topic 761 – Tips – Withholding and Reporting
Employees who receive cash tips of $20 or more in a calendar month while working for you, are required to report to you the total amount of tips they receive. The employees must give you written reports by the tenth of the following month. Employees who receive tips of less than $20 in a calendar m…[Read more]

Topic 762 – Independent Contractor vs. Employee
For federal employment tax purposes, the usual common law rules are applicable to determine if a worker is an independent contractor or an employee. Under the common law, you must examine the relationship between the worker and the business. You should consider all evidence of the degree of control…[Read more]

Topic 763 – The Affordable Care Act
The Affordable Care Act, enacted in 2010, contains tax provisions that are in effect and more that will be implemented during the next several years. The information under the following headings briefly explains some of the income tax provisions of the legislation.

Small Business Health Care Tax Credit
This…[Read more]

Topic 801 – Who Must File Information Returns Electronically
The requirements to file electronically depend on the type of information returns that are being filed.

Section 6011(e)(2)(A) of the Internal Revenue Code and the regulations thereunder require any person, including a corporation, partnership, employer, estate and trust, who files 250…[Read more]

Topic 802 – Applying to File Information Returns Electronically
FIRE

All filers must obtain approval from the Internal Revenue Service, Technical Services Operation (TSO), and be assigned a Transmitter Control Code (TCC) prior to electronically filing Forms 1042-S, 1097-BTC, 1098, 1099, 3921, 3922, 5498, 8027, 8955-SSA, and W-2G. Once approval to…[Read more]

Topic 804 – Test Files and Combined Federal and State Filing
FIRE

First-time electronic filers are encouraged (but not required) to submit a FIRE test file. However, a test file is required when applying to participate in the Combined Federal/State Filing Program.

Through the Combined Federal/State Filing (CF/SF) Program, the Internal Revenue…[Read more]

Topic 851 – Resident and Nonresident Aliens
Because residents and nonresident aliens are taxed differently, it’s important for you to determine your tax status.

Nonresident Aliens
You’re considered a nonresident alien for any period that you’re neither a U.S. citizen nor a resident alien for tax purposes.

Resident Aliens
You’re considered a…[Read more]

Topic 856 – Foreign Tax Credit
The foreign tax credit intends to reduce the double tax burden that would otherwise arise when foreign source income is taxed by both the United States and the foreign country from which the income is derived.

Qualifying Tests for the Credit
The tax must meet four tests to qualify for the credit:

The tax must be a…[Read more]

Topic 857 – Individual Taxpayer Identification Number (ITIN)
A taxpayer identification number (TIN) is required on all returns, statements, and other tax-related documents and you must provide it upon request to any other person who needs it to comply with the tax law. For most individuals, their TIN is a social security number (SSN). A foreign…[Read more]

Topic 858 – Alien Tax Clearance
If you’re a resident or a nonresident alien departing the United States, you usually have to show that you have complied with the U.S. income tax laws before you can depart. You do this by obtaining from the IRS a tax clearance document, commonly called a departure permit or sailing permit.

Not Required to Obtain…[Read more]

Topic 901 – Is a Person With Income From Puerto Rico Required to File a U.S. Federal Income Tax Return?
If you’re a bona fide resident of Puerto Rico during the entire tax year, you generally aren’t required to file a U.S. federal income tax return if your only income is from sources within Puerto Rico. However, if you also have income from…[Read more]

Topic 902 – Credits and Deductions for Taxpayers with Puerto Rican Source Income Exempt from U.S. Tax
If you’re a bona fide resident of Puerto Rico, you’ll be able to exclude income from Puerto Rican sources on your U.S. income tax return. If you’re also a federal employee, the income you derive from that employment is deemed U.S. sourced for U.S.…[Read more]