Search Results for: tax withholding

Manage poor performance and misconduct to lower unemployment costs. Discover the best practices to ensure compliance and lower expenses.

Learn how to manage Form W-4, when to use it, and what changes were introduced in 2020 to meet your responsibilities and ensure tax compliance.

Get an overview of the differences between IRS Form 940, Form 941, and Form 944 to ensure tax compliance by filing them accurately and on time.

Changes were made in 2023 to Form IA 12.3, a separation notice New York employers must provide their employees upon termination.

Learn more about Form 941 in order to improve your tax compliance with proper and timely submissions of the form.

Learn about the changes proposed to the 2023 Form W-2 that were postponed for 2024 to ensure compliance with payroll tax requirements.

Read on to learn more about the key compliance metrics that employers need to monitor and how a comprehensive program can streamline the process.

There's a new set of FAQs from the IRS about the ERC, covering things such as eligibility, qualifications, ERC scams, timing and more.

Learn the benefits of employer services for your business. Explore the types of services and learn how to choose the best provider for a smooth HR process.

Here’s our update on 2023 compliance trends that will help employers manage changes for their organizations and prepare for new legislation.

Find out how to use IRS Form 941-X to maintain compliance with Form 941 or correctly file for certain tax credits.

ACA reporting compliance is important for employer tax filing. Read our state-by-state guide and FAQs from Experian Employer Services for more information.

Some tax advisors are misstating the rules related to deadlines for Employee Retention Credit (ERC) claims. They may say that amendments can be filed up to three years from each quarterly payroll tax filing date, resulting in a separate deadline to apply for the ERC for each calendar quarter. They say, for example, that the deadline to amend the second quarter of 2020 is July 31, 2023 (i.e. three years from the filing deadline of 7/31/2020). In one instance, an advisor claims that, “The ERTC deadline is March 12th, 2023.” Others are making the erroneous statement that, “The program could run out of allocated funds at anytime [sic],” while also urgently warning, “Time is of the essence.” What are the actual deadlines for filing an ERC claim? There are only two deadlines: For all quarters in 2020, the deadline to apply for the ERC is April 15, 2024, and for all quarters in 2021, the deadline is April 15, 2025. Download our ERC White Paper The ERC can only be filed using an IRS Form 941-X, “Adjusted Employer's quarterly Federal Tax Return or Claim for Refund.” A separate 941-X will be filed for each calendar quarter for which ERC is being claimed. While original Forms 941 are due by the last day of the month that follows the end of each quarter, and amendments to federal tax returns generally need to be filed within three years of the original due dates, 941-X amendments are a little different. The instructions to Form 941-X state: Is There a Deadline for Filing Form 941-X? Generally, you may correct overreported taxes on a previously filed Form 941 if you file Form 941-X within 3 years of the date Form 941 was filed or 2 years from the date you paid the tax reported on Form 941, whichever is later. You may correct underreported taxes on a previously filed Form 941 if you file Form 941-X within 3 years of the date the Form 941 was filed. We call each of these time frames a “period of limitations.” For purposes of the period of limitations, Forms 941 for a calendar year are considered filed on April 15 of the succeeding year if filed before that date. That last sentence is the key, “For purposes of the period of limitations, Forms 941 for a calendar year are considered filed on April 15 of the succeeding year if filed before that date.” This rule is derived from Section 6513 of the Code in which subsection (c) “Return and payment of Social Security taxes and income tax withholding,” includes the rule that, “(1) If a return for any period ending with or within a calendar year is filed before April 15 of the succeeding calendar year, such return shall be considered filed on April 15 of such succeeding calendar year.” This means that while the Form 941 for the second quarter of 2020 was originally due on 7/31/2020; the third quarter was due on 10/31/2020; and the fourth quarter was due on 1/31/2021, all of those returns are considered filed on 4/15/2021, setting the three-year statute of limitations for amending any of those returns as 4/15/2024. (The instructions to Form 941-X explain, “any corrections to the employee retention credit for the period from March 13, 2020, through March 31, 2020, should be reported on Form 941‐X filed for the second quarter of 2020.”) All of this being said, it’s not advisable to wait until the very end. Learn more about our solutions for tax credits including the ERC.

Get an overview of the latest updates made to 2022 Form 941 for the second quarter and make sure to comply with the necessary changes.

The IRS has now done more than preview updated 1099 form layouts. Its draft 2026 Instructions for Forms 1099-MISC and 1099-NEC confirm that the agency is moving toward more detailed reporting for cash tips, Treasury Tipped Occupation Codes, and overtime compensation. The draft also confirms that the reporting threshold for many covered payments is increasing from $600 to $2,000 for tax years beginning after 2025. That makes this a meaningful development for businesses that issue Forms 1099-MISC or 1099-NEC. The change is not limited to form appearance. The draft instructions show how the IRS expects these new fields to work within total income reporting, which means filers may need to revisit data collection, reporting logic, and year-end compliance processes before the 2026 filing cycle. What the draft instructions change for 2026 1099 forms The draft instructions identify several updates in the “What’s New” section. They state that new boxes 1b and 13a were added for cash tips, new boxes 1c and 13b were added for Treasury Tipped Occupation Codes, and new boxes 1d and 14 were added for overtime compensation. The same section also says the payer and recipient address fields were separated into individual entry boxes and that the minimum threshold for certain reporting and backup withholding requirements increased to $2,000, with inflation adjustments beginning in calendar year 2027. The instructions also clarify that these new amounts do not replace total income reporting. On Form 1099-NEC, cash tips and overtime compensation are still included in Box 1a. On Form 1099-MISC, those amounts are still included in Box 3. That means the IRS is adding detail without abandoning the broader roll-up structure already familiar to filers and recipients. Why this stands out Compared with the April 2025 instructions, this is a clear reporting shift. The prior instructions did not include these new tip, Tipped Occupation Code, or overtime boxes, and they reflected the older $600 threshold framework. In practical terms, the 2026 draft is asking for more granular reporting while also changing the dollar threshold that triggers reporting for many payments. The IRS had already hinted at this direction in the draft forms themselves and in Publication 1099, but the instructions matter because they tell filers how the agency expects the forms to be used. That is what makes the April 2026 draft instructions especially useful for tax, payroll, and compliance teams evaluating the impact. What this means for filers For companies that rely on established 1099 workflows, these draft instructions are an early warning. Systems that currently capture only total nonemployee or miscellaneous income may need to account for new subcategories tied to tips and overtime. Teams may also need to evaluate whether upstream payment classification, recipient communications, and year-end reporting controls are still aligned with the new structure the IRS is signaling. This is still draft guidance, but it is detailed enough to justify early planning. Suggested takeaway The IRS’s draft 2026 instructions for Forms 1099-MISC and 1099-NEC confirm that broader reporting changes are on the table for 2026. The biggest developments are the addition of specific boxes for cash tips, Treasury Tipped Occupation Codes, and overtime compensation, along with a higher reporting threshold for many covered payments. While these rules are not final yet, they are substantial enough to put filers on notice that 2026 reporting may look materially different from 2025. Simple comparison table Topic2025 instructions2026 draft instructionsCash tipsNo dedicated reporting boxesAdds Box 1b on 1099-NEC and Box 13a on 1099-MISCTreasury Tipped Occupation CodesNot separately reportedAdds Box 1c on 1099-NEC and Box 13b on 1099-MISCOvertime compensationNo dedicated reporting boxesAdds Box 1d on 1099-NEC and Box 14 on 1099-MISCTotal income treatmentNo special tip/overtime box guidanceTips and overtime still included in Box 1a on 1099-NEC and Box 3 on 1099-MISCReporting threshold$600 framework$2,000 for many covered payments beginning after 2025Address layoutTraditional combined address format  Address fields split into individual entry boxes

It's officially a new year, but that doesn't mean 2025 ended without some lingering effects. Employers face an evolving regulatory environment shaped by immigration reform, AI legislation, unemployment tax adjustments, and the uncertain fate of key programs like the Work Opportunity Tax Credit (WOTC). In this blog post, we distill the most important takeaways from Experian Employer Services’ latest quarterly webinar, covering what HR, tax, and compliance teams need to know now to prepare for the rest of 2026. While Congress has been historically inactive in 2025—passing only 36 bills—the federal regulatory machine never stopped. In Experian Employer Services’ November webinar, “Quarterly Regulatory & Legislative Updates for Employers (Q4),” experts Gordon Middleton and Wayne Rottger broke down the compliance shifts that will shape the road ahead. Missed the live event? You can access the on-demand recording of Quarterly Regulatory & Legislative Updates (Q4) to hear directly from our compliance experts. This 60-minute session offers in-depth coverage of urgent topics including IRS withholding changes, state unemployment tax trends, and federal immigration enforcement. Watch now. Congressional Inactivity Doesn’t Mean Employer Invisibility Although Congress passed fewer bills than any time in modern history, executive action and federal agencies filled the gap. The president issued over 210 executive orders in 2025, and federal agencies like USCIS and DHS continued rapid-fire regulatory activity. Among the biggest changes: H-1B Visa Petitions: A controversial $100,000 petition fee for some H-1B applications was introduced in September and clarified in October. This policy is being challenged by the U.S. Chamber of Commerce and others. EAD Auto Extensions: Effective October 30, 2025, DHS eliminated auto extensions for many Employment Authorization Document (EAD) categories—including asylum applicants, TPS holders, and refugees. E-Verify Enforcement: E-Verify operations remained active through the government shutdown, a signal that immigration vetting remains a priority. Employers were reminded to submit cases timely and document any delays. One Big Beautiful Bill Act (OBBBA): Big Withholding Changes Ahead The OBBBA continues to reshape how payroll and HR teams handle tipped employees: Tip Tracking: Employers must now identify “qualified tips” tied to specific occupations using Treasury-issued codes (nearly 70 new codes were released). 2026 W-2 Draft Changes: A new Box 14B will be introduced for these occupation codes, and Box 12 will include new reporting fields. Also expect a 15-line worksheet on the 2026 W-4 draft, which expands deductions. Employer Limitation: Employers can’t force employees to adopt the new W-4, so communication strategies must be prepared in advance. Shutdowns and Backlogs: IRS and SSA Still Expect Timely Compliance Despite mass furloughs at the IRS and other federal agencies, deadlines remain intact. Automated notices are still being sent, payments are due, and limited live support is available. SSA, DHS, and ICE continued operating at high capacity during the shutdown. State-Level Legislation: The Real Compliance Movers States continued to pass meaningful reforms while the federal government stalled. Highlights include: AI Restrictions: Illinois now prohibits AI in hiring if it leads to discriminatory outcomes. Wage Theft Notices: Rhode Island’s new hire notice requirement starts January 1, 2026. Pay Transparency: Massachusetts will require employers with 25+ employees to publish pay ranges starting October 2026. Paid Leave Expansions: Nebraska mandated new minimums for employers with as few as 11 employees. Unemployment Legislation: A Rising Risk for Employers 2025 saw 188 unemployment-related bills, with many focusing on expanding access to benefits—even to striking workers. Washington and Oregon passed laws granting UI benefits during trade disputes, raising red flags about future trust fund stability. Key takeaways: Trust Fund Risk: Most state UI trust funds are underfunded. Large-scale strikes could significantly drain them. FUTA Credit Reduction: California and the U.S. Virgin Islands are likely to face FUTA reductions in 2026. California alone owes $21 billion in federal UI loans. Taxable Wage Base Increases: Half of U.S. states are increasing UI taxable wage bases in 2026, affecting employer payroll budgets. WOTC Renewal: Hopeful, But Not Done Yet The Work Opportunity Tax Credit (WOTC) expired December 31, 2025. Although it has historically been renewed retroactively, no bill has yet been introduced. Industry advocates report promising signs, but employers are advised to continue processing applications to remain retroactively compliant if renewal occurs. Final Key Takeaways Compliance Doesn’t Pause—even during a shutdown. Deadlines remain active. Prepare for OBBA Impact—new W-4 and W-2 formats will require payroll system updates. State Legislation Will Continue—watch for wage theft, pay transparency, and AI usage laws. UI Tax Changes Are Coming—plan for higher taxable wage bases and future trust fund pressures. WOTC Renewal Uncertain—continue screening and tracking candidates until further notice. Use a Trusted Compliance Partner—keeping up with regulatory changes is more than a full-time job. Stay informed year-round with the Experian Employer Services Blog. Subscribe for updates on legislative changes, compliance tools, and insights from our subject matter experts.

The IRS has officially released the final 2026 Form W-4, Employee’s Withholding Certificate, incorporating updates from the One Big Beautiful Bill Act (OBBBA). Following the August draft, the finalized form confirms structural and numeric changes designed to align withholding with new deduction and credit provisions under the OBBBA. The finalized form expands the Deductions Worksheet, clarifies exemption procedures, and adjusts credit values to reflect the updated Child Tax Credit of $2,200 per qualifying child, up from $2,000. The layout now totals five pages (including instructions), up from four in 2025. Key 2026 updates: Step 3: Claim Dependent and Other Credits Split structure retained: Lines 3(a) and 3(b) remain separate for qualifying children and other dependents. New value applied: The Child Tax Credit rises to $2,200 per child under OBBBA, while the $500 credit for other dependents is unchanged. Step 4: Other Adjustments The optional label has been removed. Step 4 now clearly defines its subsections. Step 4(b) explicitly states that if left blank, withholding defaults to the standard deduction. Exemption checkbox added: Employees can now claim exempt from withholding via a formal checkbox and certification, replacing the old handwritten “Exempt” notation. Expanded Deductions Worksheet (Page 4) The worksheet grows, occupying its own page, and now includes new categories introduced by OBBBA: Qualified tips. If your total income is less than $150,000 ($300,000 if married filing jointly), enter an estimate of your qualified tips up to $25,000 Qualified overtime compensation: If your total income is less than $150,000 ($300,000 if married filing jointly), enter an estimate of your qualified overtime compensation up to $12,500 ($25,000 if married filing jointly) of the “and-a-half” portion of time-and-a-half compensation. Qualified overtime compensation. If your total income is less than $150,000 ($300,000 if married filing jointly), enter an estimate of your qualified overtime compensation up to $12,500 ($25,000 if married filing jointly) of the “and-a-half” portion of time-and-a-half compensation. Qualified passenger vehicle loan interest. If your total income is less than $100,000 ($200,000 if married filing jointly), enter an estimate of your qualified passenger vehicle loan interest up to $10,000. The worksheet retains traditional itemized categories (medical/dental, SALT, mortgage interest, charitable gifts) but now concludes with a limitation section and a refreshed standard deduction table. These additions directly mirror OBBBA’s new income-based deductions. Why this matters: The 2026 Form W-4 signals a shift toward greater precision and legislative alignment. Employees with variable pay—especially tips, overtime, or new car loans—can now fine-tune withholding through targeted deduction lines. Employers gain clearer data inputs for payroll accuracy and reduced rework. The checkbox for exemption simplifies verification and year-end tracking. The child credit increase ensures calculations match the higher benefit created under OBBBA. Employer checklist: Update HRIS/payroll fields to accommodate the expanded Step 4(b) deductions and new exempt checkbox. Refresh employee guidance—including onboarding instructions, FAQ content, and self-service portals—to explain the new lines. Validate withholding logic against 2026 tax tables once released. Communicate early—especially to employees with tips, overtime, or auto-loan interest deductions. Employees, what to know: If you earn tips or overtime, bought a new car, or are 65 or older, you may qualify for new deductions under OBBBA. Use the updated worksheet to reflect these items and avoid over withholding. The IRS withholding estimator (https://www.irs.gov/individuals/tax-withholding-estimator) remains the best way to validate accuracy throughout the year. Key takeaway: The final 2026 Form W-4 transforms the withholding certificate into a more granular, data-driven tool. It brings OBBBA’s deductions and credit changes directly into payroll operations and requires employers to review system fields and training materials now to stay ahead of 2026 implementation.

Explore key changes in the draft 2026 Form W-4, including new deductions, credit updates, and exempt status options.