Payroll is the act in which an employer pays their employees. Payroll includes salaries, wages, deductions, bonuses, and net pay. Typically, payroll will be on a weekly, biweekly, or monthly schedule.
August 09, 2021
Employers are required to comply with a federal new hire reporting requirement. For each newly hired or rehired employee, the employer must provide the following information to the state new hire directory:
States may request additional information:
Federal government employers must report new hires to the National Directory of New Hires. Employers must report newly hired employees within 20 calendar days of the date of hire. If an employer reports new hires magnetically or electronically, it must send two transmissions for each calendar month which are 12–16 days apart.
Every employer must deduct and withhold federal income, social security, and Medicare taxes from wages paid to employees using a W-4 Form. Employers must use one of the withholding methods prescribed by the IRS to calculate the exact amount of withholding. All newly-hired employees should complete and submit a signed Form W-4 to their employer on or before the first day of work.
If allowances increase, current employees can file an amended Form W-4 any time their number of allowances increases, for example, at the birth or adoption of a child.
If allowances decrease, (thus increasing the amount withheld each pay period), employees must file an amended Form W-4 within 10 days. This could happen when:
The IRS does not require employees to complete a new Form W-4 each year. Employees may be required to complete a Form W‑4 when their circumstances change.
Employers are not required to monitor employees for changes that decrease allowances.
Form W-4 consists of three pages which contain three worksheets:
The following is a list of the personal allowances to which an employee is entitled:
If an employee claims he or she is exempt from withholding on a Form W-4, employers do not withhold federal income tax. In order to be exempt, the employee must certify on the W-4 form that they:
Employees who want to continue their exempt status must file a new Form W-4 with their employer by February 15 of each year. Remind employees that if no valid Form W-4 is filed by the deadline, you must withhold based on a valid W-4 on file for the employee. If there is no valid W-4, then withhold as if they were single with no allowances.
Form W-9 is used to confirm a person’s name, address, and Taxpayer Identification Number (TIN) for employment or income-generating activities. The W-9 is commonly referred to as the Request for Taxpayer Identification Number and Confirmation form. The form can be used for both U.S. citizens and resident aliens. Some income-generating activities that are applicable are:
The form is solely used for the purpose of confirming a person's Taxpayer Identification Number. It differs from a W-4 Form in that it does not set up a withholding schedule. It is most commonly used to request the information required for the 1099 form, which is distributed to independent contractors once a year for filing purposes.
Form W-2, also known as the Wage and Tax Statement form, is required to be completed and distributed at end of year by employers to employees. It’s purpose is to provide the information required by an employee to complete their state and federal tax returns. The W-2 reports wage and withholding information to the employee. Specifically its used to withhold FICA withholding tax information. W-2 forms are only required for W-4 employees. The IRS uses W-2s to track an individual's tax obligations.
Every employer engaged in a trade or business who pays remuneration, including noncash payments of $600 or more for the year (all amounts if any income, social security, or Medicare tax was withheld) for services performed by an employee must file a Form W-2 for each employee (even if the employee is related to the employer) from whom:
Form 1099-NEC is used to report nonemployee compensation. Businesses should complete the form for any independent contractors (nonemployees) who were paid $600 or more over the calendar year.
Form 1099-NEC is one of many 1099 tax forms. The others include 1099-MISC for miscellaneous income, 1099-INT for interest income, and 1099-DIV for dividend and distribution income. Form 1099-NEC is applicable for three types of payments:
Form 1099-NEC should be distributed by Jan 31st of the following year.
|SS-4||Application for Employer Identification Number|
|SS-5||Application for Social Security Card|
|SS-8||Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding|
|W-2||Wage and Tax Statement|
|W-2c||Corrected Wage and Tax Statement|
|W-3||Transmittal of Wage and Tax Statements|
|W-3c||Transmittal of Corrected Wag and Tax Statements|
|W4||Employee's Withholding Allowance Certificate|
|W-4P||Withholding Certificate for Pension for Annuity Payments|
|W-4S||Request for Federal Income Tax Withholding from Sick Pay|
|W-9||Request for Taxpayer Identification Number and Certification|
|843/td>||Claim for Refund and Request for Abatement|
|940||Employer's Annual Federal Unemployment (FUTA) Tax Return|
|940(Schd.A)||Multi-State Employer and Credit Reduction Information|
|940(Schd.R)||Allocation Schedule for Aggregate Form 940 Filers|
|941||Employer's Quarterly Federal Tax Return|
|941(Schd.B)||Report of Tax Liability for Semiweekly Schedule Depositors|
|941(Schd.D)||Report of Discrepancies Caused by Acquisitions Statutory Mergers, or Consolidations|
|941(Schd.R)||Allocation Schedule for Aggregate Form 941 Filers|
|941-X||Adjusted Employer's Quarterly Federal Tax Return or Claim or Refund|
|943||Employer's Annual Federal Tax Return for Agricultural Employees|
|943-A||Agricultural Employer’s Record of Federal Tax Liability|
|943-X||Adjusted Employer’s Annual Federal Tax Return for Agricultural Employers or Claim for Refund|
|944||Employer's Annual Federal Tax Return|
|944-X||Adjusted Employer's Annual Federal Tax Return or Claim for Refund|
|1042||Annual Withholding Tax Return for U.S. Source Income of Foreign Persons|
|1042-S||Foreign Person's U.S. Source Income Subject to Withholding|
|1042-T||Annual Summary and Transmittal of Forms 1042-S|
|1094-B||Transmittal of Health Coverage Information|
|1094-C||Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns|
|1095-C||Employer-Provided Health Insurance Offer and Coverage|
|1096||Annual Summary and Transmittal of U.S. Information Returns|
|1099-R||Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.|
|2159||Payroll Deduction Agreement|
|2555||Foreign Earned Income|
|2678||Employer/Payer Appointment of Agent|
|2848||Power of Attorney and Declaration of Representative|
|4419||Application for Filing Information Returns Electronically (FIRE)|
|4852||Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distribution From Pensions, Annuities, Retirement or Profit Sharing Plans, IRAs, Insurance Contracts, etc.|
|8027||Employer’s Annual Information Return of Tip Income and Allocated Tips|
|8027-T||Transmittal of Employer’s Annual Information Return of Tip Income and Allocated Tips|
|8233||Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual|
|8508||Request for Waiver From Filing Information Returns Electronically|
|8655||Reporting Agent Authorization|
|8809||Application for Extension of Time to File Information Returns|
|8821||Tax Information Authorization|
|8922||Third-Party Sick Pay Recap|
|EEO-1||Employer Information Report|
|I-9||Employment Eligibility Verification|
|SSA-131||Employer Report of Special Wage Payments|
|SF-329B||United States Government Wage Garnishment Order|