by Alice Gilman
Summary
This guide provides compliance guidance for HR and payroll professionals regarding withholding of federal income and employment taxes, including obtaining and verifying Social Security Numbers (SSNs) for employees, determining federal income tax withholding using Form W-4, withholding on pension and annuity distributions, backup withholding on nonemployee payments, the refundable earned income tax credit for certain low to moderate income workers, and employer recordkeeping requirements and penalties related to withholding.
In this guide, learn about:
- Withholding federal income and employment taxes
- Social Security numbers
- Obtaining a Social Security number
- Employee name changes and SSNs
- Penalties for filing incorrect SSNs
- SSN verification
- SSN errors
- Social Security statements
- Determining federal income tax withholding
- Form W‑4
- Form W‑4P, withholding certificate for periodic pension or annuity payments
- Form W‑4R, withholding certificate for nonperiodic payments and eligible rollover distributions
- Form W‑4S, request for federal income tax withholding from sick pay
- Federal income tax withholding methods
- Wage-bracket method
- Percentage method
- Alternative withholding methods
- Overtime pay withholding
- Tip withholding
- Nonresident alien withholding
- Supplemental wages
- Withholding on pension and annuity distributions
- Periodic distributions
- Nonperiodic distributions
- Eligible rollover distributions
- Automatic rollover of mandatory distributions
- Backup withholding on nonemployee payments
- When backup withholding is required
- When backup withholding begins and ends
- Earned income credit
- Recordkeeping requirements
- State income tax withholding
- Nexus
- Reciprocal withholding agreements
- Other state income tax exemptions
- Expatriates
- Local income tax withholding
- FICA tax withholding
- FICA tax rates
- Employees with multiple employers
- Successor employers
- Related corporations and the common paymaster rules
- FICA-exempt wages
- FICA-exempt jobs
- FICA recordkeeping requirements
- Penalties for failing to withhold
- Future developments
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About the author
Alice Gilman
Alice Gilman, an employment tax compliance expert, has created two best-selling payroll compliance publications – Payroll Legal Alert, and The Payroll Compliance Handbook, currently published by Business Management Daily.
She was a contributing editor to Alexander Hamilton Institute’s Benefits Alert, Personnel Legal Alert, and Manager’s Legal Bulletin newsletters; the Complete Compliance Guide to Federal and State Employment Laws; the Complete COBRA Compliance Kit; the Complete FLSA Compliance Kit; and the Complete HIPAA Compliance Kit.
At Aspen Publishers, Ms. Gilman was a contributing editor to the Payroll Manager’s Letter, the American Payroll Association’s Basic Guide to Payroll, How to Slash Payroll Costs, and the Fingertip Guide to Payroll Practice.
Ms. Gilman is a graduate of the State University of New York at Albany and received her law degree from the University of Bridgeport.
She is admitted to the New York State Bar and is a member of the American Payroll Association.
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