1.5 Employment Forms
Employers that knowingly hire unauthorized aliens face civil penalties of $590 - $4,722 for each worker hired for a first offense, $4,722 - $11,803 for a second offense, and $7,082 - $23,607 for more than two offenses. Employers failing to comply with the verification requirements can be fined $________________ - ____________or each person for whom proper verification was not required.
$237 - $2,360
If an employee claims exempt from withholding on Form W-4, what must the employer do?
employers do not withhold federal income tax.
An employer must put a newly-hired employee's Form W-4 withholding into effect for the first payroll period ending after the form is filed. The employer must keep the _____________________after the date of the last tax return (April 15, the Employee's Form 1040, U.S. Individual Income Tax Return) filed using the information on the form.
form for at least four years
for w-4r:All distributions that are not considered periodic payments are nonperiodic payments. The default rate of withholding on a ________________________________________ unless the payee enters a different rate on Line 2 of a 2022 Form W-4R. (On a 2021 Form W-4P a payee could elect not to have withholding from a nonperiodic payment by checking the box on Line 1 of the 2021 form.)
nonperiodic payment is 10%
Employees may also file an amended Form W-4 whenever their _____________________________________________________or if they become entitled to claim exempt from withholding.
personal situations changes which would result in less tax liability
The rules also outline situations that would not be considered good faith, are what?
such as technical or procedural mistakes committed to avoid verification, making knowingly false corrections, preparing a Form I-9 knowing the form contains false information, and corrections made after receiving previous notices of violations.
If the employee does not provide a new Form W-4 claiming exempt by the deadline, then the employer must withhold from the next wage payment to _____________________________________________________________________.
the employee as if the employee had checked the box for Single or Married filing separately in Step 1(c) and made no entries in Steps 2-4 of the 2022 Form W-4
If employee fails to furnish a Form W-4. If new employees do not furnish a Form W-4 by their first pay period, what must the employer do for the withholding?
the employer must withhold as if they had checked the box for Single or Married filing separately in Step 1(c) and made no entries in Step 2 through 4 (no adjustments).
If the employee does not submit a Form W-4S, _____________________________ The minimum amount the third party can withhold is $20 per week. After withholding, the employee must receive at least $10 or nothing will be withheld. If any payment is smaller or larger than a regular payment, the amount withheld must be smaller or larger in the same proportion as the payment.
the third party will not withhold federal income tax.
the employee is obligated to enter their social security number in Section 1 of the Form I-9. True or false
true
Once an employer has enrolled, registered its users, and completed the ______________________, it can immediately begin using the program. To enroll, go to www.dhs.gov/E-Verify and follow the instructions.
web-based tutorial
w-4r:If the payer does not receive a Form W-4R, an SSN is not provided, or the payer receives notice from the IRS that the SSN provided is incorrect, then the payer must _________________ of the nonperiodic payment for federal income tax.
withhold 10%
For payments beginning in 2022, if a payee has not provided a Form W-4P to the employer, did not provide an SSN to the employer, or the IRS notifies the employer that the payee provided an incorrect SSN, then the employer must ____________________________________.
withhold tax from the retirement or annuity payments as if the payee's filing status is single with no other adjustments in Steps 2 through 4.
An employee who claims exempt from withholding must submit a new Form W-4 _____________________ after realizing the claim of exemption is no longer valid because the employee will have income tax liability in the current year
within 10 days
Certain minor, unintentional, technical, and procedural violations made during the verification process are not considered compliance failures if the employer makes a good faith attempt to correct them during the ________________ provided for making corrections after being notified by USCIS.
10-day period normally
Distributions received by a payee from a qualified retirement plan (such as 401(k) plans and section 457(b) plans maintained by a governmental employer) or tax-sheltered annuities that are eligible to be rolled over to an IRA or qualified plan are subject to a default rate of withholding on the taxable amount of the distribution_____________. A payee cannot elect a rate of less than _______________________but can opt for a higher percentage on Line 2 of the 2022 Form W-4R. (On a 2021 Form W-4P, additional withholding could be indicated on Line 3 of the form.)
20%
For an eligible rollover distribution from a qualified retirement plan (such as 401(k) plans and section 457(b) plans maintained by a governmental employer) or tax-sheltered annuities that are eligible to be rolled over to an IRA or qualified plan, the default withholding rate is_________________%.
20%
mployers engaging in a pattern and practice of violating the hiring and/or verification requirements face criminal penalties of up to $___________________________.
3,000 and/or six months in jail
Reason to do a new w-4
An employee is divorced or legally separated. Someone else takes over support of a dependent. A nonworking spouse takes a job. The employee can no longer claim exempt from withholding
When an employee provides the employer with a Form W-4 claiming exemption from withholding, the form is valid for the remainder of that year and until_________________________________.
February 15th of the next year
When first hired, employees generally must complete two forms:
Form I-9, Employment Eligibility Verification, and Form W-4, Employee's Withholding Certificate.
__________________________________, is used by individuals to obtain a new social security card or have their card reissued and Individuals who have lost their social security card.
Form SS-5, Application for a Social Security Card
Every employer must keep a ___________________________ on file for each employee. The form kept on file may be a paper copy or an electronic version of the form. ________________________ tells the employer how to determine the amount to withhold from the employee's wages for federal income tax.
Form W-4, Employee's Withholding Certificate,
Before 2022, recipients of pensions, annuities, nonperiodic payments, and rollover distributions used _______________________________________to affect the amounts withheld for federal income tax from these payments.
Form W-4P, Withholding Certificate for Pension or Annuity Payments,
____________________________________________________, is filed when an employee receives sick pay from a third-party insurer due to a disabling non-job-related illness or injury. (See Forms and Publications in the Resource Center for a copy of Form W-4S) The employee uses the form to tell the third party how much to withhold from the benefit payments
Form W-4S, Request for Federal Income Tax Withholding From Sick Pay
In order to be exempt, the employee must certify on Form W-4 the employee:
Had a right to a refund of all federal income tax withheld in the prior year because the employee had no tax liability; Expects to have no tax liability in the current year; and Cannot be claimed as a dependent on someone else's income tax return if the employee will receive more than $1,100 in income, including more than $350 in unearned income, in the current year.
For payments that began before 2022, if a 2021 or earlier Form W-4P was not submitted and no 2022 form was submitted, the employer must withhold on periodic pension payments as if the payee is ______________________________________. Although the 2021 Form W-4 does not use allowances, they are still used in connection with the 2021 Form W-4P.
Married claiming 3 withholding allowances
Alternately, the 2022 Form W-4 consists of four pages which contain two worksheets: What are they?
Step 2(b) - Multiple Jobs Worksheet Step 4(b) - Deductions Worksheet
Who is exempt from federal tax?
Those who earn less than the standard deduction can ordinarily claim to be exempt from withholding (see the following table).
Employers are not required to verify whether or not an employee's withholding certificate is accurate, true or false.
True
The Department of Homeland Security no longer allows expired documents from Lists A or B to be presented during the I-9 process. True or False
True
Documents that prove identity and/or work authorization.
All newly hired employees must show evidence of their identity and right to work in the U.S. They can do this by presenting any of a number of documents listed below (one from List A or one each from Lists B and C). Form I-9 instructions provide a detailed list of the abbreviations for the List A, B, or C documents that may be entered on the form.
Under proposed rules implementing the good faith exception, the employer must make any corrections to sections 2 or 3 and ensure the employee, preparer, or translator make any corrections to section 1. ________________________________________.
All such corrections must be initialed and dated.
Ken, an employee, receives $250 per week from Back-to-Work Insurance Company, a third-party insurer, and files a W-4S asking that $50 per week be withheld for federal income tax. After being out four full weeks, Ken returns to work in the middle of the week working the remaining three days of the week. For the full week when Ken returns to work, he is entitled to $100 in sick pay.
Because Ken receives only 40% of his weekly sick pay ($250 x 40% = $100), the amount of federal income tax withheld for the fifth week should be 40% of his regular withholding amount: 40% x $50 = $20.
___________________________________Employees cannot submit a revised Form W-4 in anticipation of a change. For example, if they expect to be married, they cannot change their filing status or adjustments in Steps 2 through 4 until after the wedding.
Changes cannot be made in advance.
By completing a 2022 Form W-4P, retirees can:
Elect not to have any income tax withheld (except for payments sent to U.S. citizens or resident aliens outside the U.S.) Factor in income from jobs and/or multiple pensions and annuities Claim dependent and other credits Indicate an additional dollar amount to be withheld
Employers will not be penalized under IRCA if they have acted in good faith. What are way employers can protect themselves?
Employers can protect themselves by taking the following actions: Having newly hired employees fill out section 1 of Form I-9 no later than the day when they begin work. Employers participating in E-Verify must have employees enter their social security numbers in section 1. Employers not participating in E-Verify cannot require employees to enter their social security numbers in section 1. Completing the employer's part of Form I-9 (section 2) within 3 days of hire Making sure the documents presented by the employee establishing the employee's identity and eligibility to work appear genuine and are not expired Keeping completed Forms I-9 for at least 3 years from the date of hire or 1 year from the date of termination, whichever is later Presenting Form I-9 on request to an inspector from USCIS or the Department of Labor
Employers may verify an employee's eligibility to work by using what system?
Employers may verify an employee's eligibility to work by using the U.S. Citizenship and Immigration Services (USCIS) E-Verify system. The following employers may be required to use E-Verify: Federal government contractors, and Certain employers in certain states.
Once an employer hires a worker as an employee, the employee must prove to the employer his or her identity and right to work in the United States through the completion of Form I-9, _____________________.
Employment Eligibility Verification
An employer's responsibilities around the w-4 ARE WHAT?
Ensuring Form W-4 is complete. Check to make certain each employee's Form W-4 is signed and dated and the social security number is accurate. Reject any invalid Forms W-4. Withholding as claimed. Withhold based on the filing status, dependents claimed, and other adjustments. Also deduct any additional amount requested on the form in Step 4(c). Requesting that employees amend Form W-4 when appropriate. IRS regulations say employers should remind their employees by December 1 to submit revised Forms W-4 if their filing status or personal situations have changed. Record keeping. Keep all Forms W-4 on file for at least four years from the date of the last tax return filed using information from the Form W-4. (See Module 8, Lesson 3 for more on record retention.) Checking forms claiming exempt status. Be sure an employee understands the rules for being exempt from withholding. An employee who submits a false Form W-4 may be subject to a $500.00 penalty. Being cautious about helping employees complete Form W-4. You certainly want to help employees understand Form W-4, but do not put yourself in the role of their tax advisor. If you consult with employees as to the amounts to claim in Steps 3 or 4, you may be liable for penalties for underwithholding. Here is how you can help employees with their Forms W-4: Provide only published or recognized sources of information (IRS Publications 501 or 505, or resources on the IRS website, such as videos and the IRS withholding estimator). By December 1, remind all employees to submit a revised Form W-4 if their personal situations change or their filing status changes.
Payroll professionals should not advise employees as to how to complete their form. Instead, employees should be given a copy of _________________________________________________________Employees should then determine for themselves the appropriate adjustments necessary
IRS Publication 505, Tax Withholding and Estimated Tax or refer them to the IRS Tax Withholding Estimator.
____________________ (thus increasing the amount withheld each pay period), employees must file an amended Form W-4 within 10 days. This could happen when: An employee is divorced or legally separated. Someone else takes over support of a dependent. A nonworking spouse takes a job. The employee can no longer claim exempt from withholding
If dependents decrease
Current employees can file an amended Form W-4 any time their number of ___________________________, for example, at the birth or adoption of a child.
If dependents increase.
Sally and Mae are two new employees of XYZ Company. The first day of their employment, they are asked to fill out Form I-9 and to provide appropriate documentation as listed on the instructions to Form I-9. Sally provides her expired Texas driver's license and her U.S. Social Security card to the Human Resources representative at XYZ Company. Mae offers the HR representative her expired Canadian passport. Which new employee meets the Form I-9 requirements for acceptable documents?
Neither employee has met the Form I-9 requirements. Sally's expired driver's license may not be presented. Mae's expired Canadian passport is not sufficient.
________________________________________ 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.
New Forms W-4 annually.
The employer is encouraged to notify employees by _____________________they need to file an amended Form W-4 if their filing status or number of dependents has changed.
Notify employees by December 1.
The E-Verify Program involves verification checks of the SSA and DHS databases for what?
The E-Verify Program involves verification checks of the SSA and DHS databases, using an internet-based system to verify the employment authorization of newly hired employees.
_____________________________________ makes it illegal for an employer to hire an unauthorized worker. Employers must comply with this requirement by verifying the identity and right to work of all employees hired after November 6, 1986.
The Immigration Reform and Control Act of 1986 (IRCA)
______________________________________. After a current employee files an amended Form W-4, the change must be reflected in withholding no later than the first payroll period ending on or after the 30th day after receiving the amended Form W-4.
When you must change withholding
new Form W-4R is what?
Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions.
he death of a _____________________ does not require the surviving spouse to file a new Form W-4 until January 1 of the year after the _____________________________.
spouse or dependent child