Hiring an Employee
What is the penalty for a missing or incorrectly reported SSN if corrected by March 3rd to August 1st?
$110 per return, max of $1,713,000 annually for large employers (avg annual gross of more than $5 mil) Max of $571,000 for small employers (avg. annual gross less than $5 mil)
What is the civil penalty if an employer fails to report new hires?
$25 per new hire, up to $500 if it was a conspiracy
What is the penalty for failing to comply with I9 requirements?
$252 to $2,507
What is the penalty for a missing or incorrectly reported SSN if correct by August 1st or not at all?
$280 per return, max of $3,426,000 for large employers (avg annual gross of more than $5 mil) max of $1,142,000 for small employers (avg annual gross of less than $5 mil)
What is the penalty for the second offense of hiring an unauthorized alien?
$4,772 to $11,803
What is the penalty for a missing or incorrectly reported SSN if corrected by March 2nd?
$50 per return, max of $571,000 annually for large employers (avg annual gross of more than $5 mil) Max of $199,500 annually
What is the employer penalty for submitting a W-4 with less tax liability?
$500
What is the first penalty for hiring an unauthorized alien?
$590 to $4,772
What is the penalty for any offenses after the second offense of hiring an unauthorized alien?
$7,082 to $23,07
What information does federal law require to be reported for new hires?
- Employer name - Employer address - Employer FEIN - Employee name - Employee address - Employee SSN - Date of hire
What is the minimum information an employer should obtain when hiring an employee?
- Legal name - SSN - ADdess - DOB - Gender - Form W4 - For I9 - Applicable State/Locol Juris
What is the minimum information required when hiring an independent contractor?
- Legal name of the independent contractor - The legal address of the individual or their company - the TIN (SSN or EIN)
How long should employers retain copies of W-4s?
4 years
What is an ITIN?
A 9-digit number for resident and nonresident aliens who are NOT eligible for US employment and need identification for other tax purposes.
What is the form I9?
Helps employers verify whether an employee can legally work in the US
What is the penalty for failure to file correct information returns due to intentional disregard?
Is the greater of $570 or 10% of the aggregated amount of the items to be reported correctly
What is step 5 of the W-4?
Signature and date
What service allows employers to verify employee SSN?
Social Security Number Verification Service (SSNVS)
What is E-verify?
System operated by the Department of Homeland Security with the SSA that allows employers to electronically verify the employment eligibility of their newly hired employees.
What types of employees do not require an I9?
Those employees for casual domestic work in a private home on an irregular basis, independent contractors, leased employees (agency is responsible for this), and those not physically working on US soil.
How long must an employer retain an I9 for?
Three years after hire date of employee or one year after termination of employee
What is form SS-5?
A form that can be used to make changes or corrections, as well as as well as apply for a new SSN.
What is E-verify?
A free system provided by USCIS with an automated link to Federal databases to help employers determine employment eligibility.
What is a "lock-in letter"?
A letter provided by the IRS that states the employee's withholding rate. The employer must disregard any W-4s the employee submits that reduce the liability for the employee.
When must an employee submit a new exempt W-4 form?
By Feb 15th of that year
What should employers do if there is SSN verification mismatch?
Check employer entries, consult with the employee, refer the employee to SSA, and Document efforts.
What is step 3 of the W-4?
Claim dependents (decreases tax)
What is Section 1 of the I9?
Consists of basic employee information and must be completed by employee
What is the W-4?
Employee's withholding certificate, dictates the federal withholding amount for employees
What is Section 2 of the I9?
Employer portion, they must examine the evidence of identity and employment authorization for the employee.
What is step 2 of the W-4?
Identify multiple jobs or working spouse (increases tax)
When can an employee claim exempt on the W-4?
If they had no income tax liability last year and expects none this year.
What is step 1 of the W-4?
Name, address, SSN, filing status
When should an employee's new W-4 go into effect?
No later than the start of the first payroll period ending on or after the 30th day from the date the replacement W-4 is received.
What is Section 3 of the I9?
Only required to be complete by employers if employee information needs to be updated or are being rehired within three years of their original hire date.
What is step 4 of the W-4?
Other income, deductions, additional withholding per pay
What combination of of documents can an employee provide for sections A,B, and C?
Provide any document from section A to prove both identity and authorization. Or they can provide a document from section B to prove identity AND provide a document from section C to prove employment authorization.
What must an employer do if an employee doesn't provide a new exempt W-4 form?
Withhold at single with no other adjustments or the last non-exempt W-4 setup.
When must Section 2 of the I9 be completed by employers?
Within three business days of the date employment begins.
