Search Results for: tax withholding

Navigate the challenges of state tax withholding for remote employees with our comprehensive guide, ensuring compliance amid the rapid growth of remote work.

Employers who have employees working in a large number of states have to manage a number of complexities to ensure tax withholding compliance. Employee Tax Withholding Allowances Over 40 states in the U.S. collect state income tax directly from workers’ paychecks. The Form W-4, used to determine the amount of tax to withhold, underwent significant changes in 2020, leading many states to develop their own forms or adjust their tax tables. Not all workers need to submit a new state form, but it’s recommended to check the state tax agency website for more information. Employer Responsibilities Employers must maintain federal and state tax forms for each worker. If a worker doesn’t provide a complete, signed federal Form W-4, the employer must withhold federal income tax as if the worker were single or married filing separately. Most states follow the same rule for state income tax. Exemptions Some workers may claim exemption from federal and state income tax withholding. Each state has its own rules about exemption from state income tax and the form a worker must file to support the exemption. Nonresident Military Spouses The federal Military Spouses Residency Relief Act (MSRRA) allows a servicemember’s spouse to designate a different state as their domicile and pay taxes to that state. The Veterans Benefits and Transitions Act of 2018 (VBTA) modified the law to allow spouses of servicemembers to choose to use the servicemember’s domicile for state taxation, irrespective of the marriage date. Recordkeeping Requirements Most state income tax withholding laws have similar recordkeeping requirements to those of the IRS for federal income tax withholding. These requirements typically include keeping track of returns and statements filed with the state revenue agency, dates and amounts of tax deposits, the total number of employees subject to withholding, and more. Compliance in these areas is crucial to avoid potential penalties and ensure accurate tax withholding. Employers should stay updated on changes to tax laws and forms, maintain thorough records, and ensure they’re withholding the correct amount of tax for each employee. It’s also important to respect exemptions and understand the specific rules for nonresident military spouses. By doing so, employers can ensure they’re meeting their legal obligations and providing accurate information to their employees. Here are some recent legislative updates regarding tax withholding that employers should be informed about. Updates effective 7/1/2024 Georgia G-4 Form Update:  The state of Georgia has released an updated version of the Georgia G-4 form. The update specifically affects Line H, where the value has been increased from $3,000 to $4,000. This change is effective from July 1, 2024. For more details, please refer to the official form. Learn more Addition of Blanchester Village, Ohio: Effective from July 1, 2024, Blanchester Village in Ohio has been added. For more information about this update, please visit the official page. Learn more Addition of College Corner Village, Ohio: College Corner Village in Ohio has been added effective from July 1, 2024. More details can be found on the official page. Learn more Addition of Glenmont Village, Ohio: Glenmont Village in Ohio has been added effective from July 1, 2024. For more information, please visit the official page. Learn more Addition of Holmesville Village, Ohio: Holmesville Village in Ohio has been added effective from July 1, 2024. More details can be found on the official page. Learn more Vermont Child Care Contribution Tax: The state of Vermont has added the Child Care Contribution tax effective from July 1, 2024. For more information about this new tax, please refer to the official document. Learn more Please note that it’s always a good idea to consult with a tax professional or the respective tax authorities for the most accurate and up-to-date information.

Stay compliant with state tax withholding rules for your multistate workforce. Learn the ins and outs of tax withholding with Experian Employer Services.

Are you managing tax withholding for a single employee working in multiple states? Get expert guidance from Experian Employer Services to stay compliant.

Understanding the differences between employer tax withholding and tax filing is key to compliance and delivering a high quality employee experience.

These key concepts of multistate payroll tax withholding can help your business stay compliant with regulations in different jurisdictions.

The IRS confirms for employers no changes to payroll forms or federal withholding tables for 2025 under the OBBBA.

Learn how to handle payroll taxes for out-of-state employees with this practical guide. Understand the challenges and get tips on staying compliant across state lines.

Manage year-end payroll effortlessly and explore our comprehensive checklist of what you need to keep in mind this year-end payroll tax season.

Learn the tax implications of return-to-office mandates. Get insights on deductions, benefits, and compliance issues for a smooth transition.

Learn about different payroll tax forms, when to use and file them, and ensure compliance with different payroll tax requirements to avoid penalties.

Find out which taxes are payroll taxes and how to report them to maintain compliance with regulations and IRS requirements.

Form 945, Annual Return of Withheld Federal Income Tax, is the cornerstone for reporting all “nonpayroll’ withheld taxes. Nonpayroll taxes encompass amounts withheld from various sources, including gambling winnings, retirement pay for service in the U.S. Armed Forces, pensions, annuities, IRAs, and certain other deferred income, and backup withholding concerning reportable payments. All income tax withholding reported on Forms 1099 or Form W-2G must be reported on Form 945. Form 945 may also be used to report backup withholding for compensation paid to H-2A visa holders who fail to furnish their taxpayer identification number. Who Must File Employers who withhold or are required to withhold federal income tax (including backup withholding) from nonpayroll payments must file Form 945. If an employer doesn't have a nonpayroll tax liability for a specific year, they are not required to file Form 945. Form 945 should not be used to report withholding required to be reported on Form 1042, the Annual Withholding Tax Return for U.S. Source Income of Foreign Persons. Form 945A Form 945A, Annual Record of Federal Tax Liability, serves as a daily log of federal tax obligations. Semiweekly and next-day depositors must complete and attach Form 945A to Form 945. Monthly depositors need not complete Form 945A unless they accrue a one-day tax liability of $100,000 or more, in which case they become semiweekly depositors for the remainder of the year. Facsimile Signature Corporate officers or duly authorized agents may sign Form 945 by rubber stamp, mechanical device, or computer software program. IRS Unveils Draft Instructions for the 2023 Annual Withholding Return In the ever-evolving landscape of tax regulations, businesses must stay ahead of the curve. The IRS has given us a glimpse into what the upcoming tax year holds with the release of the draft instructions for the 2023 Form 945, the Annual Return of Withheld Federal Income Tax. Let's delve into the specifics to ensure you're well-prepared for your tax obligations in the coming year. A Closer Look at the Form 945 Updates At its core, Form 945 serves as the linchpin for businesses, allowing them to report federal income tax withheld from nonpayroll payments. If you're an employer who withholds federal income tax, including backup withholding, from nonpayroll sources like pensions, military retirement, gambling winnings, specific government payments, or those subject to backup withholding, Form 945 is your annual record-keeper. It consolidates all federal income tax withholdings from these nonpayroll avenues into one comprehensive document. The filing deadline for the 2023 Form 945 is January 31, 2024. However, the IRS has shown understanding for diligent businesses. If you've consistently met your tax obligations throughout the year by making timely deposits, you gain a little breathing room. In this case, the deadline extends to February 12, 2024, providing you with a few extra days to ensure your records are in order. (Remember, the extension to February 12 is due to February 10 falling on a Saturday.) Filing Methods Demystified While the IRS strongly advocates for electronic filing due to its efficiency and speed, they recognize that some businesses still prefer the traditional paper route. If you're one of them, the method you choose depends on whether a payment accompanies Form 945. The details, including specific mailing addresses, can be found in the Form 945 instructions. The good news? These addresses remain unchanged, providing a familiar path for those accustomed to the paper trail. Addressing Errors with Form 945-X We're all human, and mistakes happen. If you find an error on a previously filed Form 945, fear not. The solution lies in Form 945-X, also known as the Adjusted Annual Return of Withheld Federal Income Tax or Claim for Refund. When errors rear their heads, this form allows you to make necessary corrections. It's crucial to note that Form 945-X is filed separately from the regular Form 945, ensuring clarity and accuracy in your tax records. Embracing Electronic Fund Deposits In our digital age, electronic transactions have become the norm, and federal tax deposits are no exception. Employers are mandated to utilize electronic funds transfer (EFT) for all federal tax deposits. The preferred method? Electronic Federal Tax Payment System (EFTPS) stands as the cornerstone of EFT. However, if EFTPS doesn't align with your preferences, alternatives exist. Businesses can delegate this responsibility to tax professionals, financial institutions, payroll services, or other trusted third parties. These entities can ensure your electronic deposits are made promptly and accurately. Peering into the Future As businesses, we thrive on foresight. The IRS granted us a glimpse into the future with the draft release of the 2023 Form 945 in June. While the final version has yet to see the light of day, this draft version equips businesses with invaluable insights. By familiarizing yourself with the draft instructions, you can prepare your financial records and processes for the year ahead, ensuring a smooth tax season. The IRS released a draft of the 2023 Form 945 in June. A final version has not yet been released.

Learn best practices to stay on top of IRS requirements and create a sound compliance strategy to prevent payroll tax penalties.

When committing to a hybrid workforce with remote workers, employers should consider the local tax incentives they may forfeit, and new ones to claim.

We help you avoid tax trouble, maintain company morale and stay efficient by maintaining tax compliance. Explore this employer payroll taxes guide.

Executive Summary Healthcare employers are under growing pressure to balance workforce stability, compliance, and cost control in an environment defined by high turnover, aggressive hiring cycles, slim margins, and increasing regulatory complexity. From hospital systems managing highly compensated, credentialed professionals to long‑term care organizations employing large hourly workforces, the risks tied to hiring, payroll accuracy, employment verification, and compliance are increasingly interconnected. As healthcare organizations rethink how they manage workforce risk, many are moving beyond point solutions and tactical fixes. Instead, they are adopting integrated, data‑driven approaches that reduce administrative burden, improve compliance outcomes, and protect financial health—without disrupting care delivery. This shift is creating new opportunities for partners like Experian to support healthcare employers across verification, unemployment management, I‑9 compliance, and tax-related workforce challenges. Healthcare’s Growing Workforce Risk Profile Healthcare is unlike most industries when it comes to workforce dynamics. It combines: High hiring volume and high turnover, particularly in long‑term care and home health A wide range of wage types, where employees may hold multiple roles or pay rates A geographically distributed workforce, often spanning multiple states Tight operating margins, leaving little room for inefficiency or error For hospital systems, workforce decisions are high stakes. Employees tend to be long‑tenured, highly compensated, and financially active—making employment records especially valuable and highly scrutinized. For healthcare services organizations, the challenge is scale: keeping up with constant hiring, onboarding, compliance deadlines, and claims management while minimizing cost exposure. In both cases, workforce risk doesn’t live in one department. It touches HR, payroll, compliance, finance, and legal teams—often resulting in fragmented ownership and inconsistent outcomes. The Limits of Traditional Workforce Management Many healthcare organizations already rely on well‑known vendors for HR, payroll, and workforce administration. Platforms like Workday have become central systems of record, while employment verification, unemployment claims, and compliance processes are frequently handled by separate providers—or manually. This fragmented approach creates several challenges: Verification bottlenecks, especially when responding to high volumes of employment or income requests Unemployment claims leakage, driven by limited internal expertise and inconsistent follow‑up I‑9 compliance delays, particularly when new hires push deadlines or issues surface late in the process Tax withholding and payroll inconsistencies, amplified by multi‑state employment and M&A activity The result is not just operational inefficiency, but financial and reputational risk—at a time when healthcare employers can least afford it. Reframing Workforce Risk as a Strategic Priority Forward‑thinking healthcare employers are beginning to view workforce risk through a broader, more strategic lens. Instead of reacting to issues after they occur, they are looking for ways to: Reduce manual effort and rework Improve accuracy and compliance outcomes Increase visibility across workforce data Better align HR and payroll operations This shift is particularly visible in areas like employment verification, unemployment management, and compliance—functions that are mission‑critical but often under‑resourced internally. Where Experian Fits into the Healthcare Workforce Conversation Rather than positioning workforce solutions as standalone tools, Experian supports healthcare employers by addressing common risk areas with scalable, data‑driven capabilities that integrate cleanly into existing ecosystems. Employment and Income Verification at Scale For healthcare systems, employment and income verification requests often involve high‑value records tied to mortgages, loans, and public service loan forgiveness (PSLF). Automating verification fulfillment helps reduce HR burden, improve response times, and ensure sensitive data is handled securely—without pulling staff away from patient‑focused priorities. Smarter Unemployment Management Unemployment claims management remains a significant cost center for healthcare, particularly in high‑turnover environments. Many organizations lack the internal expertise to effectively contest claims, audit charges, or stay ahead of changing regulations. A more proactive unemployment management approach can help healthcare employers win more claims, reduce benefit charges, and mitigate unnecessary expenses. I‑9 Compliance Without the Last‑Minute Scramble Healthcare hiring cycles move fast, but I‑9 compliance deadlines don’t flex. When new hires delay documentation or issues arise late in the process, compliance risk increases. Centralized I‑9 management helps surface potential non‑compliance earlier, supporting timely resolution and stronger audit readiness. Navigating Payroll and Tax Complexity With employees spread across state lines—and frequent organizational changes due to growth or consolidation—accurate tax withholding and payroll alignment are increasingly complex. Solutions that support consistent tax handling and integrate smoothly with HR and payroll platforms help healthcare employers maintain compliance while minimizing disruption. Supporting Long‑Term Care and Home Health Growth While not all healthcare organizations benefit equally from every workforce program, flexibility matters. For example, tax credits like WOTC may have limited value for nonprofit hospital systems but can be meaningful for‑profit long‑term care organizations with high hiring volume. As home health and long‑term care continue to expand, especially amid demographic shifts, scalable workforce solutions become essential to managing growth responsibly. A More Integrated Path Forward Healthcare’s workforce challenges aren’t going away—but how employers manage them is changing. By rethinking workforce risk as an integrated, enterprise‑wide priority, healthcare organizations can: Lower administrative and compliance costs Improve employee experience during hiring and onboarding Strengthen audit readiness and regulatory confidence Free up internal teams to focus on patient care and strategic initiatives Experian’s role is not to replace existing systems, but to complement them—providing healthcare employers with the insight, automation, and support needed to navigate a complex, high‑risk workforce environment with confidence. Frequently Asked Questions Why is workforce risk such a critical issue for healthcare employers? Healthcare combines high hiring volume, strict compliance requirements, and financial pressure. Even small workforce errors can lead to significant cost, compliance, or reputational risk. How does employment verification impact healthcare organizations? Healthcare employers manage a high volume of verifications, often tied to financially active employees. Automating verification helps reduce HR workload and ensures sensitive data is handled securely. Why is unemployment management especially challenging in healthcare? High turnover, furloughs, role changes, and complex employment structures make unemployment claims more common and harder to manage—especially without specialized expertise. What makes I‑9 compliance difficult in healthcare? Fast hiring timelines and delayed documentation can push I‑9 issues late into onboarding, increasing compliance exposure and audit risk. Can Experian work with existing HR and payroll systems? Yes. Experian solutions are designed to integrate with leading platforms, including systems commonly used across healthcare organizations.

Trust is tested in moments most organizations overlook. In this webinar, Hidden Moments That Build Employee Trust, experts from Experian Employer Services and H3HR Advisors explored how routine HR compliance and operational processes—such as onboarding, payroll accuracy, employment verification, and tax withholding—play a critical but often invisible role in shaping employee trust.  While employees rarely think about HR systems, they deeply feel the impact when these processes fail—especially during major life moments like starting a new job, securing housing, managing benefits, or ensuring timely pay. When organizations invest in reliable infrastructure and reduce friction in these hidden moments, they create stability, predictability, and confidence that carry forward into engagement, retention, and performance.  The key takeaway: Compliance isn't just about checking boxes—it's about showing up for employees when it matters most.   Why trust is built in the moments we don't talk about  Historically, compliance processes have been treated as back-office necessities—tasks that must be completed to avoid audits, fines, or legal exposure. But as the panel emphasized, employees don't experience compliance as a transaction. They experience it as support—or friction—during some of the most stressful moments of their lives.  Employees aren't thinking about systems. They're thinking about questions like:  Will I get paid correctly and on time?  Will my employment be verified so I can rent an apartment or buy a home?  Will my benefits work when my family needs them?  When HR processes are reliable, employees rarely notice. When they break down, trust erodes instantly—not only in HR, but in the organization.  The Hidden Infrastructure of Trust  The webinar highlighted a powerful truth: trust is built through consistency and dependability over time.  Research shared during the session underscores why this matters:  Only 61% of employees say they are very confident their payroll and withholdings are correct, meaning nearly 40% are unsure.  50% of employees would struggle to meet financial obligations if their paychecks were delayed by just one week.  Errors or delays in HR operations aren't just administrative inconveniences. They introduce stress into employees’ lives—and often into their families’ lives—at moments when stability matters most.  Where Trust Is Most at Risk  Trust is especially tested at the intersection of HR processes and real-life moments, when everyday administrative tasks carry real personal stakes for employees. From new‑hire onboarding and I‑9 verification—where first impressions are formed and early delays can undermine confidence—to payroll and tax withholding, where inaccurate or unpredictable pay can quickly erode trust, these processes shape how employees experience their employer.   Employment and income verification directly affect an employee’s ability to secure housing, loans, or transportation, while benefits enrollment tied to life events such as marriage, childbirth, or medical needs increases sensitivity to errors and miscommunications. Even programs like the Work Opportunity Tax Credit (WOTC) extend beyond compliance, opening doors to employment while delivering measurable business value. Many of these issues never escalate to leadership, yet they have a profound impact on individual employees—making their invisibility to executives precisely what makes them so risky.  Friction Is the Enemy of Trust  The panel consistently returned to one theme: reduce friction everywhere you can.  Friction shows up as:  Manual handoffs and workarounds  Delays caused by fragmented systems  Knowledge locked in one or two tenured team members  Rework, errors, and exception handling  Modern HR infrastructure—especially when paired with trusted partners—helps reduce this friction by improving accuracy, speed, and reliability for everyone involved: HR teams, employees, and third parties alike. The goal isn't more process. The goal is fewer steps, fewer errors, and greater confidence.  How to Measure Trust and Not Just Compliance  Traditional compliance metrics matter—but they don't tell the full story.  In addition to tracking accuracy, timeliness, and audit outcomes, organizations can measure trust by asking questions such as:  How confident are you in our HR processes?  Was this experience simple and predictable?  Did issues get resolved quickly and clearly?  Do you feel confident reaching out to HR again?  Short, well-timed feedback—embedded naturally at the end of key HR experiences—can surface powerful insights without overwhelming employees.  Over time, these signals connect directly to engagement, retention, and performance outcomes.  Key Takeaways Compliance is a powerful trust-building opportunity, because routine HR processes quietly shape how employees feel about their employer—often more than headline initiatives ever do. What may feel ordinary to HR teams, such as onboarding, payroll, or employment verification, can be life‑altering for employees and their families, especially during moments of financial or personal transition. When these processes are predictable and accurate, reliability creates calm—reducing stress and reinforcing confidence in the organization.   That reliability depends on strong infrastructure: the right technology and trusted partners allow HR to move from reactive problem‑solving to proactive support. Over time, trust compounds through these small, unseen moments; handled consistently and well, they create lasting credibility and a stronger, more resilient employee experience.  Reframing Compliance as Care The most powerful shift discussed in the webinar was a mindset change: Compliance isn’t just about risk mitigation—it’s about care, predictability, and partnership.  When organizations show employees they've thought ahead, invested in reliability, and designed systems around real life—not just regulations—trust follows naturally.  Download the Webinar On-Demand Want the full conversation, real-world examples, and additional insights from Experian Employer Services and H3HR Advisors?  Download the full webinar recording and slides to explore how modern HR infrastructure turns hidden compliance moments into lasting employee trust.