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Form W-2 Filing Requirements INTERNAL REVENUE SERVICE Federal, State Local Governments Topics Employment Tax Reporting Overview Reporting Requirements Form W-2 Reporting Methods Name/SSN Verification Form W-2 Income Items Just for Governments Common Errors Form W-2/ 941 Reconciliation Employment Taxes Defined Federal income tax withholding Income Filing status Exemptions Social security tax 12.4% (employer and employee contribution) Medicare tax 2.9% (employer and employee contribution) No wage cap Reporting to SSA and IRS SSA Determines eligibility for benefits Keeps individual accounts Pays benefits IRS Collects taxes and returns Both Agencies Receive and match Form W-2 form information Employment Tax Reporting Cycle Have employee complete W-4 Identify applicable taxes Withhold taxes from each paycheck Periodically make tax deposits File quarterly tax returns Issue Forms Form W-2 Form W-4 Employee’s Withholding Allowance Certificate Name social security number ask for social security card Marital status Withholding allowances Employers no longer send questionable W-4 forms to IRS the IRS will notify the employer to withhold income tax from an employee by issuing a lock-in letter. Identify Applicable Taxes Section 218 State administrators SSA Post-June 1991 and no retirement plan Social security mandatory Hired after March 1986 Medicare coverage mandatory Withhold Taxes From Each Paycheck Use W-4 info from employee Use Pub 15 withholding tables Spot-check payroll software calculations Deposit Rules Pay with 941 if you know taxes for quarter will be less than $2,500 (pay annually with Form 944) Lookback period – 4 quarters comprising Begins July 1st ending June 30th of preceding yrs For 2007: July 1, 2005 thru June 30, 2006 Monthly deposits Reported taxes in lookback period ? $50,000 Semiweekly deposits Reported taxes in lookback period ? $50,000 Next day deposit if $100,000 or more taxes on any day Use EFTPS in