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taxmap/pubs/p15-002.htm#TXMP56d236d7 Introduction(p7)

This publication explains your tax responsibilities as an employer. It explains the requirements for withholding, depositing, reporting, and paying employment taxes. It explains the forms that you must give to your employees, those that your employees must give to you, and those that you must send to the IRS and SSA. This guide also has tax tables that you need to figure the taxes to withhold from each employee for 2008. References to "income tax" in this guide apply only to "federal" income tax. Contact your state or local tax department to determine if their rules are different.

Additional employment tax information is available in Publication 15-A, Employer's Supplemental Tax Guide. Publication 15-A includes specialized information supplementing the basic employment tax information provided in this publication. Publication 15-B, Employer's Tax Guide to Fringe Benefits, contains information about the employment tax treatment and valuation of various types of noncash compensation.

Most employers must withhold (except FUTA), deposit, report, and pay the following employment taxes.

• Income tax.
• Social security tax.
• Medicare tax.
• Federal unemployment tax (FUTA).

There are exceptions to these requirements. See section 15, Special Rules for Various Types of Services and Payments. Railroad retirement taxes are explained in the Instructions for Form CT-1.

taxmap/pubs/p15-002.htm#TXMP3b5445d4 Federal Government employers.(p7)

The information in this guide applies to federal agencies except for the rules requiring deposit of federal taxes only at Federal Reserve banks or through the FedTax option of the Government On-Line Accounting Link Systems (GOALS). See the Treasury Financial Manual (I TFM 3-4000) for more information.

taxmap/pubs/p15-002.htm#TXMP4f209163 State and local government employers.(p7)

Payments to employees for services in the employ of state and local government employers are generally subject to federal income tax withholding but not federal unemployment (FUTA) tax. Most elected and appointed public officials of state or local governments are employees under common law rules. See chapter 3 of Publication 963, Federal-State Reference Guide. In addition, wages, with certain exceptions, are subject to social security and Medicare taxes. See section 15 of this guide for more information on the exceptions.

If an election worker is employed in another capacity with the same government entity, see Revenue Ruling 2000-6 on page 512 of Internal Revenue Bulletin 2000-6 at www.irs.gov/pub/irs-irbs/irb00-06.pdf.

You can get information on reporting and social security coverage from your local IRS office. If you have any questions about coverage under a section 218 (Social Security Act) agreement, contact the appropriate state official. To find your State Social Security Administrator, visit the National Conference of State Social Security Administrators website at www.ncsssa.org.

taxmap/pubs/p15-002.htm#TXMP21b15296 Disregarded entities and qualified subchapter S subsidiaries.(p7)

Under Notice 99-6, employment taxes for employees of a qualified subchapter S subsidiary (QSub) or an entity disregarded as an entity separate from the owner under Regulations section 301.7701-2(c)(2) may be reported and paid either:

• By the owner (as if the employees of the disregarded entity are employed directly by the owner) using the owner's name and taxpayer identification number (TIN), or
• By each entity recognized as a separate entity under state law using the entity's own name and TIN.

If the second method is chosen, the owner retains responsibility for the employment tax obligations of the disregarded entity on wages paid before January 1, 2009. You can find Notice 99-6 on page 12 of Internal Revenue Bulletin 1999-3 at www.irs.gov/pub/irs-irbs/irb99-03.pdf.

The IRS has published final regulations (T.D. 9356) under which QSubs and eligible single-owner disregarded entities are treated as separate entities for employment tax purposes. Under T.D. 9356, disregarded entities, and the owners of such entities may continue to use the first method permitted for wages paid before January 1, 2009. A taxpayer may switch to the second method for wages paid after August 15, 2007, and before January 1, 2009, without seeking permission of the Commissioner. Taxpayers who switch from the first method to the second method for wages paid before January 1, 2009, may consider wages paid by the owner to employees of the disregarded entity during the calendar year of the switch as having been paid by the disregarded entity for purposes of determining whether wages paid to the disregarded entity's employees have reached the compensation bases for social security and FUTA taxes.

taxmap/pubs/p15-002.htm#TXMP28c6e4ff
Note.All taxpayers must switch to the second method for wages paid after December 31, 2008, and the disregarded entity will be responsible for its own employment tax obligations on wages paid after that date.

You can find T.D. 9356 on page 675 of Internal Revenue Bulletin 2007-39 at www.irs.gov/pub/irs-irbs/irb07-39.pdf.

taxmap/pubs/p15-002.htm#TXMP51236875 Comments and suggestions.(p8)

We welcome your comments about this publication and your suggestions for future editions. You can email us at *taxforms@irs.gov. (The asterisk must be included in the address.) Please put "Publications Comment" on the subject line.

You can write to us at the following address: 


Internal Revenue Service 
Tax Products Coordinating Committee 
SE:W:CAR:MP:T:T:SP 
1111 Constitution Ave. NW, IR-6526 
Washington, DC 20224

We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.

Previous Page:  Publication 15 - Circular E, Employer's Tax Guide - Reminders Next Page:  Publication 15 - Circular E, Employer's Tax Guide - 1. Employer Identification Number (EIN) Use   to find additional occurrences of topic items.