Module 7 CPP

Semiweekly depositor with - Payday on: Saturday - Tuesday

Deposit Due Friday of following week

Semiweekly depositor with - Payday on: Wednesday - Friday

Deposit Due Wednesday of following week

All tax deposits must be made using

EFTPS

What is EFTPS?

EFTPS IS IRS'S ELECTRONIC FEDERAL TAX PAYMENT SYSTEM FOR MAKING TAX DEPOSITS. EMPLOYERS, EXCEPT THOSE WITH A TAX LIABILITY OF $2,500 OR LESS IN THE CURRENT OR PRIOR QUARTER, ARE REQUIRED TO USE EFTPS.

Only employers with a tax liability less than $2,500.00 for the current or prior quarter can pay their taxes with a check. All other employers are required to use one of the following methods -- \

EFTPS Through a Financial Institution (EFTPS Credit), EFTPS Direct (EFTPS Debit), or electronic tax application (ETA) which uses the Federal Reserve wire transfer methodology.

The two primary payments options for federal payroll taxes are

EFTPS-Direct, which is an ACH debit entry, and EFTPS-Through a Financial Institution, which is an ACH credit entry. These require the deposit to be initiated prior to the settlement date. The Electronic Tax Application is a subsystem of EFTPS that allows employers to make deposits the same day they are initiated.

What is the FUTA tax credit?

EMPLOYERS PAYING STATE UNEMPLOYMENT TAXES TIMELY CAN GET A FUTA TAX CREDIT MAXIMUM OF 5.4%. THE CREDIT MAY BE REDUCED DUE TO STATES IN CREDIT REDUCTION STATUS.

When an employer deposits electronically and needs to initiate the tax deposit on the due date, which method is used?

ETA

Form 4070

Employee's Report of Tips to Employer. Employees receiving less than $20 in tips a month are not required to report tips to the employer. This form is not required. Employers can used other methods (electronic).

Which of the following organizations are required to file Form 940?

Employers must file Form 940 if they have wages greater than $1,500.00 in any quarter of 2018 or 2019 or if one or more employees were employed for at least some part of a day in any 20 or more different weeks in 2018 or 20 or more different weeks in 2019. Government agencies and tax exempt charitable organizations do not file Form 940.

Monthly depositors

Employers with $50,000 or less in employment tax liability during the lookback period. Must deposit their accumulated tax liability for each calendar month by the 15th of the following month.

Payments after the death of the employee

Exempt from federal income tax withholding. However, they are reported on Form 1099-NEC-Non Employee Certificate (Box 3, Other Income). Subject to social security and medicare tax withholding

What is Form 940?

FORM 940, EMPLOYER'S ANNUAL FEDERAL UNEMPLOYMENT (FUTA) TAX RETURN, REPORTS TAXABLE WAGES, CALCULATES FUTA TAX, AND REPORTS QUARTERLY FUTA TAX LIABILITY.

What is Form 941?

FORM 941, EMPLOYER'S QUARTERLY FEDERAL TAX RETURN, FILED WITH THE IRS IS USED TO REPORT TAXABLE WAGES, FEDERAL INCOME TAX WITHHELD, SOCIAL SECURITY AND MEDICARE WAGES AND TAXES, AND TAX DEPOSITS.

What is Form 944?

FORM 944, EMPLOYER'S ANNUAL FEDERAL TAX RETURN, CAN BE USED BY EMPLOYERS WITH AN ANNUAL TAX LIABILITY OF $1,000 OR LESS TO REPORT WAGES, FITW, SOCIAL SECURITY AND MEDICARE WAGES AND TAXES, AND DEPOSITS.

What is Form 945?

FORM 945, ANNUAL RETURN OF WITHHELD FEDERAL INCOME TAX, IS USED TO REPORT FEDERAL INCOME TAX WITHHELD FROM NONPAYROLL PAYMENTS AND NONPAYROLL TAX DEPOSITS.

Form W-2 Box 1:

FORM W-2 BOX 1, WAGES, TIPS, OTHER COMPENSATION, IS USED TO REPORT ALL TAXABLE WAGES, TIPS, AND OTHER COMPENSATION PROVIDED AN EMPLOYEE DURING THE CALENDAR YEAR.

Form W-2 Box 10:

FORM W-2 BOX 10, DEPENDENT CARE BENEFITS, IS USED TO REPORT TAXABLE AND NONTAXABLE DEPENDENT CARE ASSISTANCE.

Form W-2 Box 3:

FORM W-2 BOX 3, SOCIAL SECURITY WAGES, IS USED TO REPORT AN EMPLOYEE'S WAGES SUBJECT TO THE SOCIAL SECURITY TAX. 2020 MAXIMUM AMOUNT REPORTED IN BOX 3 IS $137,700. DO NOT INCLUDE TIPS.

Form W-2 Box 5:

FORM W-2 BOX 5, MEDICARE WAGES AND TIPS, IS USED TO REPORT AN EMPLOYEE'S WAGES SUBJECT TO THE MEDICARE TAX. THERE IS NO MAXIMUM AMOUNT REPORTED IN BOX 5.

What is Form W-2?

FORM W-2, WAGE AND TAX STATEMENT, IS FILED WITH THE SSA REPORTING WAGES, FITW, SOCIAL SECURITY AND MEDICARE WAGES AND TAXES, AND OTHER INFORMATION. FORM W-2 IS FURNISHED TO EMPLOYEES AND SSA BY 1/31.

What is Form W-2c?

FORM W-2C, CORRECTED WAGE AND TAX STATEMENT, IS FILED WITH SSA TO CORRECT A PREVIOUSLY FILED FORM W-2'S WAGES, TAXES, AND OTHER INFORMATION.

What is FUTA?

FUTA IS FEDERAL UNEMPLOYMENT TAX ACT. EMPLOYERS PAY FUTA TAX ON THE FIRST $7,000 OF AN EMPLOYEE'S WAGES, Rate 6.00%. MOST EMPLOYERS PAY FUTA TAX AT 0.6% OF WAGES IF SUTA TAXES ARE PAID BY THE FORM 940 DUE DATE.

Only the first $7,000.00 of an employee's annual wages are subject to FUTA tax.

For the first three quarters of the year, the effective FUTA tax rate (0.6%) is used to calculate the FUTA tax for the quarter.

Lookback period

Generally "looks back over" a 12-month period. The lookback period is the 12‑month period from July 1 of the second previous year through June 30 of the previous year.

Forms 940 and 941 can be filed electronically using the

IRS Employment Tax e-file System

Beneficiary of employee's estate after death

If they have not provided a TIN to the employee the payment is subject to back up withholding

How, if at all, are employment-related payments and wages that are excluded from the FUTA tax reported on Form 940?

Included in Total Payments to all employees and Payments Exempt from FUTA Tax Payments excluded from FUTA tax are reported on Form 940, Part 2, Line 4, Payments exempt from FUTA tax.

Form 945--Reporting backup withholding

Income taxes withheld from nonpayroll items, including backup withholding, are reported on Form 945.

For failing to pay state unemployment taxes timely, employers lose

10% of the normal 5.4% FUTA tax credit.

Payments from a qualified pension plan are reported on Form:

1099-R

What is Form 1099-NEC?

2020 FORM 1099-NEC, Non Employee Certificate MISCELLANEOUS Payments. REPORTS VARIOUS TYPES OF PAYMENTS TO PAYEES AND THE IRS. THE PAYEE AND THE IRS MUST RECEIVE THEIR RESPECTIVE COPIES BY 1/31 WITH AMOUNTS IN BOX 7.

On Form 941, Schedule B:

Quarterly tax liabilities, not deposits, are reported by day on Schedule B (Form 941).

What is the FIRE system?

THE FIRE SYSTEM IS THE IRS' FILING INFORMATION RETURNS ELECTRONICALLY SYSTEM USED TO FILE FORMS 1099.

The lookback period is:

THE FORM 941 LOOKBACK PERIOD IS JULY 1-JUNE 30. THE LOOKBACK PERIOD DETERMINES IF AN EMPLOYER IS A MONTHLY OR SEMIWEEKLY DEPOSITOR. THE LOOKBACK PERIOD FOR FORMS 943 AND 945 IS THE SECOND PRIOR YEAR.

Form 941, Line 5c Column 1

Taxable Medicare wages

Form 941, Line 5a Column 1

Taxable social security wages

When a quarter's FUTA tax liability is $500.00 or less:

The amount due is carried forward to the next quarter. Then if the accumulated FUTA liability is over $500.00, it must be deposited by the end of the month following the end of the quarter.

Form 941 due date

The due date for Form 941 is the last day of the month after the end of the quarter. However, employers who have deposited all taxes timely during the quarter are given an automatic 10 day extension to file Form 941. If the due date for Form 941 falls on a Saturday, Sunday, or a holiday, Form 941 is due the next business day.

Deferrals into a Section 125 plan are not reported on Form

W-2

Elective deferrals into a qualified pension plan are reported on Form

W-2 in Box 12.

Allocated tips are reported on Form

W-2 in Box 8.

Wages paid after an employee dies and in the same year

Wages are NOT subject to FIT! ARE subject to SS MED and FUTA Report MED and SS on W2 Taxable income on from 1099 NEC in beneficiary name

Form 941, line 2

Wages, tips, and other compensation for the TAXABLE payroll

Monthly depositors must deposit taxes by

the 15th of the following month.

The due date for Form 941 is

the last day of the month after the end of the quarter. However, employers who have deposited all taxes timely during the quarter are given an automatic 10 day extension to file Form 941. If the due date for Form 941 falls on a Saturday, Sunday, or a holiday, Form 941 is due the next business day.

Social security and Medicare tax adjustments can be made:

until the period of limitations expires, generally three years after filing the last tax return reporting the wages or taxes.

When an employer has a tax liability of less than $2,500.00 in the current or prior quarter, it can deposit the taxes with

with Form 941.

If the FUTA tax liability for a quarter is $500.00 or less, the taxes must be deposited:

with the next quarter's liability if the total liability exceeds $500.00. When a quarter's FUTA tax liability is $500.00 or less, the amount due is carried forward to the next quarter. Then if the accumulated FUTA liability is over $500.00, it must be deposited by the end of the month following the end of the quarter.

Form 843

is used to request a refund of an assessment.

Employers with a quarterly liability less than $X in the current or prior quarter can pay the liability when filing Form 941 or deposit the liability by the Form 941 due date.

$2,500.00

What is the FUTA wage base?

$7,000

Form 1095-C can be filed electronically using the

AIR system

What is a depositor status?

AN EMPLOYER IS A MONTHLY OR SEMIWEEKLY DEPOSITOR OF EMPLOYMENT TAXES. IN THE LOOKBACK PERIOD, A MONTHLY DEPOSITOR'S LIABILITY IS $50,000 OR LESS; A SEMIWEEKLY DEPOSITOR'S LIABILITY IS MORE THAN $50,000.

When is the 941X due?

Based on the quarter the error was discovered, the 941-X is due the end of the month following the quarter. Example error found in Q1 Jan Feb March 941-X is due April 30th

Form 2848

Power of Attorney and Declaration of Representative

When is Form 1042-S required to be provided to the IRS?

March 15

Forms 1042-S are filed with the IRS and furnished to the recipient no later than

March 15 of the year following the year the payments were made that are reported on Form 1042-S.

Wages paid after the year of death

Not subject to FIT, SS, MED, or FUTA Only reported on 1099-NEC box 3

W-2 Box 13

contains check boxes for retirement plans, statutory employees, and third-party sick pay.

Collection of underwithheld or refund of overwithheld federal income tax can only be made

during the calendar year of the over or under withholding.

W-2 Box 11

is used to report distributions or deferrals into a nonqualified deferred compensation plan.