Page 26 - IRS Employer Tax Guide

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Fileid: … ations/P15/2020/A/XML/Cycle07/source
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
you. The wages you paid to Mr. Brown are subject to so- Part-Time Workers 9:19 - 23-Dec-2019
cial security taxes on the first $135,700 ($137,700 minus
$2,000). Medicare tax is due on all of the wages you pay Part-time workers and workers hired for short periods of
him during the calendar year. You should include the time are treated the same as full-time employees for fed-
$2,000 Mr. Brown received while employed by Mr. Martin eral income tax withholding and social security, Medicare,
in determining whether Mr. Brown's wages exceed the and FUTA tax purposes.
$200,000 for Additional Medicare Tax withholding thresh-
old. Generally, it doesn't matter whether the part-time
worker or worker hired for a short period of time has an-
Motion picture project employers. All wages paid by a other job or has the maximum amount of social security
motion picture project employer to a motion picture project tax withheld by another employer. See Successor em-
worker during a calendar year are subject to a single so- ployer, earlier, for an exception to this rule.
cial security tax wage base ($137,700 for 2020) and a sin-
gle FUTA tax wage base ($7,000 for 2020) regardless of Income tax withholding may be figured the same way
the worker's status as a common law employee of multiple as for full-time workers or it may be figured by the
clients of the motion picture project employer. For more part-year employment method explained in section 6 of
information, including the definition of a motion picture Pub. 15-T.
project employer and motion picture project worker, see
section 3512.

Withholding social security and Medicare taxes on 10. Required Notice to
nonresident alien employees. In general, if you pay Employees About the Earned
wages to nonresident alien employees, you must withhold
social security and Medicare taxes as you would for a Income Credit (EIC)
U.S. citizen or resident alien. However, see Pub. 515 for
exceptions to this general rule. You must notify employees who have no federal income

International social security agreements. The United tax withheld that they may be able to claim a tax refund
States has social security agreements, also known as to- because of the EIC. Although you don't have to notify em-
talization agreements, with many countries that eliminate ployees who claim exemption from withholding on Form
dual taxation and dual coverage. Compensation subject to W-4 about the EIC, you’re encouraged to notify any em-
social security and Medicare taxes may be exempt under ployees whose wages for 2019 were less than $50,162
one of these agreements. You can get more information ($55,952 if married filing jointly) that they may be eligible
and a list of agreement countries from the SSA at to claim the credit for 2019. This is because eligible em-
SSA.gov/international. Also see Pub. 519, U.S. Tax Guide ployees may get a refund of the amount of the EIC that is
for Aliens. more than the tax they owe.

Religious exemption. An exemption from social secur- You’ll meet this notification requirement if you issue the
ity and Medicare taxes is available to members of a recog- employee Form W-2 with the EIC notice on the back of
nized religious sect opposed to insurance. This exemption Copy B, or a substitute Form W-2 with the same state-
is available only if both the employee and the employer ment. You’ll also meet the requirement by providing No-
are members of the sect. For more information, see Pub. tice 797, Possible Federal Tax Refund Due to the Earned
517. Income Credit (EIC), or your own statement that contains
the same wording.
Foreign persons treated as American employers.
Under section 3121(z), a foreign person who meets both If a substitute for Form W-2 is given to the employee on
of the following conditions is generally treated as an time but doesn't have the required statement, you must
American employer for purposes of paying FICA taxes on notify the employee within 1 week of the date the substi-
wages paid to an employee who is a U.S. citizen or resi- tute for Form W-2 is given. If Form W-2 is required but isn't
dent. given on time, you must give the employee Notice 797 or
your written statement by the date Form W-2 is required to
1. The foreign person is a member of a domestically be given. If Form W-2 isn't required, you must notify the
controlled group of entities. employee by February 7, 2020.
2. The employee of the foreign person performs serv-
ices in connection with a contract between the U.S.
Government (or an instrumentality of the U.S. Govern- 11. Depositing Taxes
ment) and any member of the domestically controlled
group of entities. Ownership of more than 50% consti- Generally, you must deposit federal income tax withheld
tutes control. and both the employer and employee social security and
Medicare taxes. You must use EFT to make all federal tax
deposits. See How To Deposit, later in this section, for in-
formation on electronic deposit requirements.

Publication 15 (2020) Page 25