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Payroll Tax Forms: Employer Guide

February 26, 2024 by Joe Grimes

While owning a business can be rewarding on many levels, employers have to meet different types of requirements in order to run it successfully. One of the responsibilities they have is knowing which forms are payroll tax forms and when to use them.

Missing a deadline or filing the wrong form can have expensive consequences. Therefore, it is necessary for employers to understand which payroll forms they need to file based on their employees and business type, their due dates, and where to send each form.

What Are Payroll Tax Forms?

In addition to understanding which taxes are payroll taxes, it is important to know which forms are used to calculate and submit associated payroll taxes. Otherwise, employers can face significant fines due to failure to submit the proper paperwork within the federal guidelines.

Payroll tax forms are used to inform the government of payroll tax liabilities. Employers use them to document the taxes withheld from employee wages and the taxes paid. Payroll tax forms that employers have to submit for federal taxes are:

Forms 940, 941, 944 and 945

Form 940, Employer’s Annual Federal Unemployment Tax Return, is used to report the federal unemployment (FUTA) tax. Employers have to pay FUTA taxes if they paid at least $1,500 in wages in a quarter within the past year. The due date for Form 940 is January 31.

Form 941, the Employer’s Quarterly Federal Tax Return, reports the number of employees, their wages and taxable tips, and the federal income taxes withheld. This form is used to report federal income and FICA taxes along with any adjustments made to them to the IRS each quarter. Form 941 is a quarterly form, and due dates for each quarter include April 30, July 31, October 31, and January 31 of the subsequent year.

Form 944, Employer’s Annual Federal Tax Return, is designed to allow small business owners to pay federal employment taxes once a year, not quarterly. It applies to employers whose annual liability for Medicare, Social Security, and federal income tax withheld from employees is $1,000 or less. Employers need to have written notification from the IRS to use this form instead of Form 941. The due date for Form 944 is January 31.

Form 945, Annual Return of Withheld Federal Income Tax, is used to report withheld federal income tax from nonpayroll payments, including distributions from qualified retirement plans. Form 945 must be filed with the IRS by January 31 of each year, reporting withholding during the prior calendar year. However, if all withheld tax has been deposited in a timely manner to the IRS, the deadline can be extended to February 10.

What is Form 940?

Form 940, Employer’s Annual Federal Unemployment Tax Return, is used to report the federal unemployment (FUTA) tax. Employers have to pay FUTA taxes if they paid at least $1,500 in wages in a quarter within the past two years. The due date for Form 940 is January 31.

What is Form W-2?

Form W-2, Wage and Tax Statement, is used to report each employee’s annual compensation and all federal, state, and other payroll tax withholdings. Form W-2 can be sent in either paper or digital format and should be received by employees no later than January 31 of the following year. Employers should be careful not to fill out this form for independent contractors and use Form 1099 instead.

What is Form W-3?

Form W-3, Transmittal of Wage and Tax Statements, summarizes information from Form W-2. It includes total earnings, FICA wages, federal income wages, and tax amount withheld. This form is not given to employees and should be sent to federal and state governments along with Form W-2.

Quarterly State Unemployment (SUI) Tax Filings

Quarterly SUI tax filings, also known as quarterly contributions or wage reports, are the reports employers file on a quarterly basis with each state, district and territory in which they pay employees in order to stay compliant with paying state unemployment taxes.

As their name suggests, these tax filings are due quarterly but, while the months covered by each quarter are standardized, states can vary on the actual due date.

Periodic State Income Tax Withholding Forms

Employers use state Form W-4s to determine state income tax withholding for employees. States either use their own version of the state Form W-4 or the federal Form W-4. Unless employees work in a state with no state income tax, they generally must fill out the W-4 state tax form before starting a new job. Most states update their W-4 forms annually.

The rules and regulations relating to reporting of income tax withholding vary greatly from state to state so it is important for employers to understand these rules in each of the state(s) where employees are working, even on a temporary basis.

Annual State Income Tax Withholding Reconciliation Forms

Most states that demand income tax withholding also require employers to file an annual reconciliation return after the end of each calendar year. Some states only require an annual reconciliation return if the employer is filing paper copies of federal Form W-2 but, in a few states, instead of an annual reconciliation return, employers must file quarterly returns.

Periodic Local Income Tax Withholding Forms

Form W-4P, Withholding Certificate for Periodic Pension or Annuity Payments, is used to determine the correct amount of federal income tax that should be withheld from a periodic pension, annuity, profit-sharing and stock bonus plan, or individual retirement arrangement (IRA) payments.

Ensuring Compliance with the Right Payroll Tax Forms

Having employees means that employers have to accept the responsibility of payroll taxes. Not paying them to tax authorities is against the law, and if the sums are large and the pattern repeats, the IRS can impose criminal sentences and even close businesses.

While mistakes can happen, if there are signs of negligence or intent, employers can face some serious fines and potential legal troubles. Missing payments and reporting deadlines or using the wrong payroll tax forms can result in the tax authorities getting more aggressive each time an error is left uncorrected.

Ensuring that employers use up-to-date payroll tax forms can be a challenge, often requiring a significant investment of time and effort. However, by outsourcing payroll management, businesses can ensure constant compliance without worrying about submission guidelines, the accuracy of payment, or getting payroll taxes paid on time.

Taking advantage of payroll tax consulting can help identify and reduce errors that can occur when dealing with these various forms and their requirements. Learn more.

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