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1040nr Instructions

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1040nr Instructions

1040nr instructions 3. 1040nr instructions   Limit on Annual Additions Table of Contents Ministers and church employees. 1040nr instructions Includible Compensation for Your Most Recent Year of ServiceMost Recent Year of Service Includible Compensation The first component of MAC is the limit on annual additions. 1040nr instructions This is a limit on the total contributions (elective deferrals, nonelective contributions, and after-tax contributions) that can be made to your 403(b) account. 1040nr instructions The limit on annual additions generally is the lesser of: $51,000 for 2013 and $52,000 for 2014, or 100% of your includible compensation for your most recent year of service. 1040nr instructions More than one 403(b) account. 1040nr instructions If you contributed to more than one 403(b) account, you must combine the contributions made to all 403(b) accounts on your behalf by your employer. 1040nr instructions Ministers and church employees. 1040nr instructions   If you are a minister or a church employee, you may be able to increase your limit on annual additions or use different rules when figuring your limit on annual additions. 1040nr instructions For more information, see chapter 5. 1040nr instructions Participation in a qualified plan. 1040nr instructions If you participated in a 403(b) plan and a qualified plan, you must combine contributions made to your 403(b) account with contributions to a qualified plan and simplified employee pensions of all corporations, partnerships, and sole proprietorships in which you have more than 50% control. 1040nr instructions You can use Part I of Worksheet 1 in chapter 9 to figure your limit on annual additions. 1040nr instructions Includible Compensation for Your Most Recent Year of Service Definition. 1040nr instructions   Generally, includible compensation for your most recent year of service is the amount of taxable wages and benefits you received from the employer that maintained a 403(b) account for your benefit during your most recent year of service. 1040nr instructions When figuring your includible compensation for your most recent year of service, keep in mind that your most recent year of service may not be the same as your employer's most recent annual work period. 1040nr instructions This can happen if your tax year is not the same as your employer's annual work period. 1040nr instructions When figuring includible compensation for your most recent year of service, do not mix compensation or service of one employer with compensation or service of another employer. 1040nr instructions Most Recent Year of Service Your most recent year of service is your last full year of service, ending on the last day of your tax year that you worked for the employer that maintained a 403(b) account on your behalf. 1040nr instructions Tax year different from employer's annual work period. 1040nr instructions   If your tax year is not the same as your employer's annual work period, your most recent year of service is made up of parts of at least two of your employer's annual work periods. 1040nr instructions Example. 1040nr instructions A professor who reports her income on a calendar-year basis is employed on a full-time basis by a university that operates on an academic year (October through May). 1040nr instructions To figure her includible compensation for 2013, the professor's most recent year of service is her service from January through May 2013 and from October through December 2013. 1040nr instructions Figuring Your Most Recent Year of Service To figure your most recent year of service, begin by determining what is a full year of service for your position. 1040nr instructions A full year of service is equal to full-time employment for your employer's annual work period. 1040nr instructions After identifying a full year of service, begin counting the service you have provided for your employer starting with the service provided in the current year. 1040nr instructions Part-time or employed only part of the year. 1040nr instructions   If you are a part-time or a full-time employee who is employed for only part of the year, your most recent year of service is your service this year and your service for as many previous years as is necessary to total 1 full year of service. 1040nr instructions To determine your most recent year of service, add the following periods of service: Your service during the year for which you are figuring the limit on annual additions, and Your service during your preceding tax years until the total service equals 1 year of service or you have figured all of your service with the employer. 1040nr instructions Example. 1040nr instructions You were employed on a full-time basis from July through December 2011 (1/2 year of service), July through December 2012 (1/2 year of service), and October through December 2013 (1/4 year of service). 1040nr instructions Your most recent year of service for computing your limit on annual additions for 2013 is the total of your service during 2013 (1/4 year of service), your service during 2012 (1/2 year of service), and your service during the months October through December 2011 (1/4 year of service). 1040nr instructions Not yet employed for 1 year. 1040nr instructions   If, at the close of the year, you have not yet worked for your employer for 1 year (including time you worked for the same employer in all earlier years), use the period of time you have worked for the employer as your most recent year of service. 1040nr instructions Includible Compensation After identifying your most recent year of service, the next step is to identify the includible compensation associated with that full year of service. 1040nr instructions Includible compensation is not the same as income included on your tax return. 1040nr instructions Compensation is a combination of income and benefits received in exchange for services provided to your employer. 1040nr instructions Generally, includible compensation is the amount of income and benefits: Received from the employer who maintains your 403(b) account, and Must be included in your income. 1040nr instructions Includible compensation includes the following amounts. 1040nr instructions Elective deferrals (employer's contributions made on your behalf under a salary reduction agreement). 1040nr instructions Amounts contributed or deferred by your employer under a section 125 cafeteria plan. 1040nr instructions Amounts contributed or deferred, at the election of the employee, under an eligible section 457 nonqualified deferred compensation plan (state or local government or tax-exempt organization plan). 1040nr instructions  Note. 1040nr instructions For information about treating elective deferrals under section 457 plans as Roth contributions, see Publication 575. 1040nr instructions Wages, salaries, and fees for personal services earned with the employer maintaining your 403(b) account. 1040nr instructions Income otherwise excluded under the foreign earned income exclusion. 1040nr instructions Pre-tax contributions (employer's contributions made on your behalf according to your election) to a qualified transportation fringe benefit plan. 1040nr instructions Includible compensation does not include the following items. 1040nr instructions Your employer's contributions to your 403(b) account. 1040nr instructions Compensation earned while your employer was not an eligible employer. 1040nr instructions Your employer's contributions to a qualified plan that: Are on your behalf, and Are excludable from income. 1040nr instructions The cost of incidental life insurance. 1040nr instructions See Cost of Incidental Life Insurance, later. 1040nr instructions If you are a church employee or a foreign missionary, figure includible compensation using the rules explained in chapter 5. 1040nr instructions Contributions after retirement. 1040nr instructions   Nonelective contributions may be made for an employee for up to 5 years after retirement. 1040nr instructions These contributions would be based on includible compensation for the last year of service before retirement. 1040nr instructions Cost of Incidental Life Insurance Includible compensation does not include the cost of incidental life insurance. 1040nr instructions If all of your 403(b) accounts invest only in mutual funds, then you have no incidental life insurance. 1040nr instructions If you have an annuity contract, a portion of the cost of that contract may be for incidental life insurance. 1040nr instructions If so, the cost of the insurance is taxable to you in the year contributed and is considered part of your basis when distributed. 1040nr instructions Your employer will include the cost of your insurance as taxable wages in box 1 of Form W-2. 1040nr instructions Not all annuity contracts include life insurance. 1040nr instructions Contact your plan administrator to determine if your contract includes incidental life insurance. 1040nr instructions If it does, you will need to figure the cost of life insurance each year the policy is in effect. 1040nr instructions Figuring the cost of incidental life insurance. 1040nr instructions If you have determined that part of the cost of your annuity contract is for an incidental life insurance premium, you will need to determine the amount of the premium and subtract it from your includible compensation. 1040nr instructions To determine the amount of the life insurance premiums, you will need to know the following information. 1040nr instructions The value of your life insurance contract, which is the amount payable upon your death. 1040nr instructions The cash value of your life insurance contract at the end of the tax year. 1040nr instructions Your age on your birthday nearest the beginning of the policy year. 1040nr instructions Your current life insurance protection under an ordinary retirement income life insurance policy, which is the amount payable upon your death minus the cash value of the contract at the end of the year. 1040nr instructions You can use Worksheet A, in chapter 9, to determine the cost of your incidental life insurance. 1040nr instructions Example. 1040nr instructions Your new contract provides that your beneficiary will receive $10,000 if you should die before retirement. 1040nr instructions Your cash value in the contract at the end of the first year is zero. 1040nr instructions Your current life insurance protection for the first year is $10,000 ($10,000 − 0). 1040nr instructions The cash value in the contract at the end of year two is $1,000, and the current life insurance protection for the second year is $9,000 ($10,000 – $1,000). 1040nr instructions The 1-year cost of the protection can be calculated by using Figure 3-1, Table of One-Year Term Premiums for $1,000 Life Insurance Protection . 1040nr instructions The premium rate is determined based on your age on your birthday nearest the beginning of the policy year. 1040nr instructions Figure 3-1. 1040nr instructions Table of One-Year Term Premiums for $1,000 Life Insurance Protection Age Cost   Age Cost   Age Cost 0 $0. 1040nr instructions 70   35 $0. 1040nr instructions 99   70 $20. 1040nr instructions 62 1 0. 1040nr instructions 41   36 1. 1040nr instructions 01   71 22. 1040nr instructions 72 2 0. 1040nr instructions 27   37 1. 1040nr instructions 04   72 25. 1040nr instructions 07 3 0. 1040nr instructions 19   38 1. 1040nr instructions 06   73 27. 1040nr instructions 57 4 0. 1040nr instructions 13   39 1. 1040nr instructions 07   74 30. 1040nr instructions 18 5 0. 1040nr instructions 13   40 1. 1040nr instructions 10   75 33. 1040nr instructions 05 6 0. 1040nr instructions 14   41 1. 1040nr instructions 13   76 36. 1040nr instructions 33 7 0. 1040nr instructions 15   42 1. 1040nr instructions 20   77 40. 1040nr instructions 17 8 0. 1040nr instructions 16   43 1. 1040nr instructions 29   78 44. 1040nr instructions 33 9 0. 1040nr instructions 16   44 1. 1040nr instructions 40   79 49. 1040nr instructions 23 10 0. 1040nr instructions 16   45 1. 1040nr instructions 53   80 54. 1040nr instructions 56 11 0. 1040nr instructions 19   46 1. 1040nr instructions 67   81 60. 1040nr instructions 51 12 0. 1040nr instructions 24   47 1. 1040nr instructions 83   82 66. 1040nr instructions 74 13 0. 1040nr instructions 28   48 1. 1040nr instructions 98   83 73. 1040nr instructions 07 14 0. 1040nr instructions 33   49 2. 1040nr instructions 13   84 80. 1040nr instructions 35 15 0. 1040nr instructions 38   50 2. 1040nr instructions 30   85 88. 1040nr instructions 76 16 0. 1040nr instructions 52   51 2. 1040nr instructions 52   86 99. 1040nr instructions 16 17 0. 1040nr instructions 57   52 2. 1040nr instructions 81   87 110. 1040nr instructions 40 18 0. 1040nr instructions 59   53 3. 1040nr instructions 20   88 121. 1040nr instructions 85 19 0. 1040nr instructions 61   54 3. 1040nr instructions 65   89 133. 1040nr instructions 40 20 0. 1040nr instructions 62   55 4. 1040nr instructions 15   90 144. 1040nr instructions 30 21 0. 1040nr instructions 62   56 4. 1040nr instructions 68   91 155. 1040nr instructions 80 22 0. 1040nr instructions 64   57 5. 1040nr instructions 20   92 168. 1040nr instructions 75 23 0. 1040nr instructions 66   58 5. 1040nr instructions 66   93 186. 1040nr instructions 44 24 0. 1040nr instructions 68   59 6. 1040nr instructions 06   94 206. 1040nr instructions 70 25 0. 1040nr instructions 71   60 6. 1040nr instructions 51   95 228. 1040nr instructions 35 26 0. 1040nr instructions 73   61 7. 1040nr instructions 11   96 250. 1040nr instructions 01 27 0. 1040nr instructions 76   62 7. 1040nr instructions 96   97 265. 1040nr instructions 09 28 0. 1040nr instructions 80   63 9. 1040nr instructions 08   98 270. 1040nr instructions 11 29 0. 1040nr instructions 83   64 10. 1040nr instructions 41   99 281. 1040nr instructions 05 30 0. 1040nr instructions 87   65 11. 1040nr instructions 90       31 0. 1040nr instructions 90   66 13. 1040nr instructions 51       32 0. 1040nr instructions 93   67 15. 1040nr instructions 20       33 0. 1040nr instructions 96   68 16. 1040nr instructions 92       34 0. 1040nr instructions 98   69 18. 1040nr instructions 70                       If the current published premium rates per $1,000 of insurance protection charged by an insurer for individual 1-year term life insurance premiums available to all standard risks are lower than those in the preceding table, you can use the lower rates for figuring the cost of insurance in connection with individual policies issued by the same insurer. 1040nr instructions Example 1. 1040nr instructions Lynne Green, age 44, and her employer enter into a 403(b) plan that will provide her with a $500 a month annuity upon retirement at age 65. 1040nr instructions The agreement also provides that if she should die before retirement, her beneficiary will receive the greater of $20,000 or the cash surrender value in the life insurance contract. 1040nr instructions Using the facts presented we can determine the cost of Lynne's life insurance protection as shown in Table 3-1. 1040nr instructions Lynne's employer has included $28 for the cost of the life insurance protection in her current year's income. 1040nr instructions When figuring her includible compensation for this year, Lynne will subtract $28. 1040nr instructions Table 3-1. 1040nr instructions Worksheet A. 1040nr instructions Cost of Incidental Life Insurance Note. 1040nr instructions Use this worksheet to figure the cost of incidental life insurance included in your annuity contract. 1040nr instructions This amount will be used to figure includible compensation for your most recent year of service. 1040nr instructions 1. 1040nr instructions Enter the value of the contract (amount payable upon your death) 1. 1040nr instructions $20,000. 1040nr instructions 00 2. 1040nr instructions Enter the cash value in the contract at the end of the year 2. 1040nr instructions 0. 1040nr instructions 00 3. 1040nr instructions Subtract line 2 from line 1. 1040nr instructions This is the value of your current life insurance protection 3. 1040nr instructions $20,000. 1040nr instructions 00 4. 1040nr instructions Enter your age on your birthday nearest the beginning of the policy year 4. 1040nr instructions 44 5. 1040nr instructions Enter the 1-year term premium for $1,000 of life insurance based on your age. 1040nr instructions (From Figure 3-1) 5. 1040nr instructions $1. 1040nr instructions 40 6. 1040nr instructions Divide line 3 by $1,000 6. 1040nr instructions 20 7. 1040nr instructions Multiply line 6 by line 5. 1040nr instructions This is the cost of your incidental life insurance 7. 1040nr instructions $28. 1040nr instructions 00 Example 2. 1040nr instructions Lynne's cash value in the contract at the end of the second year is $1,000. 1040nr instructions In year two, the cost of Lynne's life insurance is calculated as shown in Table 3-2. 1040nr instructions In year two, Lynne's employer will include $29. 1040nr instructions 07 in her current year's income. 1040nr instructions Lynne will subtract this amount when figuring her includible compensation. 1040nr instructions Table 3-2. 1040nr instructions Worksheet A. 1040nr instructions Cost of Incidental Life Insurance Note. 1040nr instructions Use this worksheet to figure the cost of incidental life insurance included in your annuity contract. 1040nr instructions This amount will be used to figure includible compensation for your most recent year of service. 1040nr instructions 1. 1040nr instructions Enter the value of the contract (amount payable upon your death) 1. 1040nr instructions $20,000. 1040nr instructions 00 2. 1040nr instructions Enter the cash value in the contract at the end of the year 2. 1040nr instructions $1,000. 1040nr instructions 00 3. 1040nr instructions Subtract line 2 from line 1. 1040nr instructions This is the value of your current life insurance protection 3. 1040nr instructions $19,000. 1040nr instructions 00 4. 1040nr instructions Enter your age on your birthday nearest the beginning of the policy year 4. 1040nr instructions 45 5. 1040nr instructions Enter the 1-year term premium for $1,000 of life insurance based on your age. 1040nr instructions (From Figure 3-1) 5. 1040nr instructions $1. 1040nr instructions 53 6. 1040nr instructions Divide line 3 by $1,000 6. 1040nr instructions 19 7. 1040nr instructions Multiply line 6 by line 5. 1040nr instructions This is the cost of your incidental life insurance 7. 1040nr instructions $29. 1040nr instructions 07 Figuring Includible Compensation for Your Most Recent Year of Service You can use Worksheet B in chapter 9 to determine your includible compensation for your most recent year of service. 1040nr instructions Example. 1040nr instructions Floyd has been periodically working full-time for a local hospital since September 2011. 1040nr instructions He needs to figure his limit on annual additions for 2014. 1040nr instructions The hospital's normal annual work period for employees in Floyd's general type of work runs from January to December. 1040nr instructions During the periods that Floyd was employed with the hospital, the hospital has always been eligible to provide a 403(b) plan to employees. 1040nr instructions Additionally, the hospital has never provided the employees with a 457 deferred compensation plan, a transportation fringe benefit plan, or a cafeteria plan. 1040nr instructions Floyd has never worked abroad and there is no life insurance provided under the plan. 1040nr instructions Table 3-3 shows the service Floyd provided to his employer, his compensation for the periods worked, his elective deferrals, and his taxable wages. 1040nr instructions Table 3-3. 1040nr instructions Floyd's Compensation Note. 1040nr instructions This table shows information Floyd will use to figure includible compensation for his most recent year of service. 1040nr instructions   Year Years of Service Taxable Wages Elective Deferrals 2014 6/12 of  a year $42,000 $2,000 2013 4/12 of  a year $16,000 $1,650 2012 4/12 of  a year $16,000 $1,650 Before Floyd can figure his limit on annual additions, he must figure includible compensation for his most recent year of service. 1040nr instructions Because Floyd is not planning to work the entire 2014 year, his most recent year of service will include the time he is planning to work in 2014 plus time he worked in the preceding 3 years until the time he worked for the hospital totals 1 year. 1040nr instructions If the total time he worked is less than 1 year, Floyd will treat it as if it were 1 year. 1040nr instructions He figures his most recent year of service shown in the following list. 1040nr instructions Time he will work in 2014 is 6/12 of a year. 1040nr instructions Time worked in 2013 is 4/12 of a year. 1040nr instructions All of this time will be used to determine Floyd's most recent year of service. 1040nr instructions Time worked in 2012 is 4/12 of a year. 1040nr instructions Floyd only needs 2 months of the 4 months he worked in 2012 to have enough time to total 1 full year. 1040nr instructions Because he needs only one-half of the actual time he worked, Floyd will use only one-half of his income earned during that period to calculate wages that will be used in figuring his includible compensation. 1040nr instructions Using the information provided in Table 3-3, wages for Floyd's most recent year of service are $66,000 ($42,000 + $16,000 + $8,000). 1040nr instructions His includible compensation for his most recent year of service is figured as shown in Table 3-4. 1040nr instructions After figuring his includible compensation, Floyd determines his limit on annual additions for 2014 to be $52,000, the lesser of his includible compensation, $70,475 (Table 3-4), and the maximum amount of $52,000. 1040nr instructions Table 3-4. 1040nr instructions Worksheet B. 1040nr instructions Includible Compensation for Your Most Recent Year of Service1 Note. 1040nr instructions Use this worksheet to figure includible compensation for your most recent year of service. 1040nr instructions 1. 1040nr instructions Enter your includible wages from the employer maintaining your 403(b) account for your most recent year of service 1. 1040nr instructions $66,000 2. 1040nr instructions Enter elective deferrals excluded from your gross income for your most recent year of service2 2. 1040nr instructions 4,4753 3. 1040nr instructions Enter amounts contributed or deferred by your employer under a cafeteria plan for your most recent year of service 3. 1040nr instructions -0- 4. 1040nr instructions Enter amounts contributed or deferred by your employer according to your election to your 457 account (a nonqualified plan of a state or local government, or of a tax-exempt organization) for your most recent year of service 4. 1040nr instructions -0- 5. 1040nr instructions Enter pre-tax contributions (employer's contributions made on your behalf according to your election) to a qualified transportation fringe benefit plan for your most recent year of service 5. 1040nr instructions -0- 6. 1040nr instructions Enter your foreign earned income exclusion for your most recent year of service 6. 1040nr instructions -0- 7. 1040nr instructions Add lines 1, 2, 3, 4, 5, and 6 7. 1040nr instructions 70,475 8. 1040nr instructions Enter the cost of incidental life insurance that is part of your annuity contract for your most recent year of service 8. 1040nr instructions -0- 9. 1040nr instructions Enter compensation that was both: Earned during your most recent year of service, and Earned while your employer was not qualified to maintain a 403(b) plan 9. 1040nr instructions -0- 10. 1040nr instructions Add lines 8 and 9 10. 1040nr instructions -0- 11. 1040nr instructions Subtract line 10 from line 7. 1040nr instructions This is your includible compensation for your most recent year of service 11. 1040nr instructions 70,475 1Use estimated amounts if figuring includible compensation before the end of the year. 1040nr instructions 2Elective deferrals made to a designated Roth account are not excluded from your gross income and should not be included on this line. 1040nr instructions  3$4,475 ($2,000 + $1,650 + $825). 1040nr instructions Prev  Up  Next   Home   More Online Publications
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Understanding your CP259C Notice

We sent you this notice because our records indicate you are presumed to be a private foundation and you didn't file a required Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation.

Printable samples of this notice (PDF)

Tax publications you may find useful

How to get help

Calling the 1-800 number listed on the top right corner of your notice is the fastest way to get your questions answered.

You can also authorize someone (such as an accountant) to contact the IRS on your behalf using this Power of Attorney and Declaration of Representative (Form 2848).
 


What you need to do

  • Disregard this notice if you have filed the return within the last four weeks using the same name and EIN listed on the notice.
  • Otherwise, file your required Form 990-PF immediately according to the instructions on the notice.
    • If you don't think you need to file, complete the Response form enclosed with your notice and mail it to us using the envelope provided.
    • If you filed more than four weeks ago or used a different name or EIN, complete the Response form enclosed with your notice and mail it to us in the envelope provided along with a signed and dated copy of the return.

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Answers to Common Questions

Which organizations must file a Form 990-PF?
Form 990-FP must be filed by:

  • Exempt private foundations (section 6033(a), (b), and (c))
  • Taxable private foundations (section 6033(d))
  • Organizations that agree to private foundation status and whose applications for exempt status are pending on the due date for filing
  • Organizations that made an election under section 41(e)(6)
  • Foundations that are making a section 507 termination
  • Section 4947(a)(1) nonexempt charitable trusts treated as private foundations (section 6033(d))

When is Form 990-PF due?
Form 990-PF is due by the 15th day of the 5th month following the close of the foundation's accounting period. Thus, for a calendar year taxpayer, Form 990-PF is due on May 15 of the following year. If any due date falls on a Saturday, Sunday, or legal holiday, the foundation can file the return on the next business day.

More information can be found at Tax Information for Private Foundations.

Can I get help over the phone?
If you have questions and/or need help completing this form, please call 1-877-829-5500. Personal assistance is available Monday through Friday, 7:00 a.m. to 7:00 p.m. CT.

Where can I go for more information about tax-exempt organizations?
For more information on tax-exempt organizations see Tax Information for Charities & Other Non-Profits.


Tips for next year

Review the tax-exempt organization resources at Form 990 Resources and Tools for Exempt Organizations.


Understanding your notice

Reading your notice
Your notice may look different from the sample because the information contained in your notice is tailored to your situation.

Notice CP259C, Page 1

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Notice CP259C, Page 3

Notice CP259C, Page 4

Page Last Reviewed or Updated: 28-Mar-2014

The 1040nr Instructions

1040nr instructions Publication 51 - Introductory Material Table of Contents Future Developments What's New Reminders Calendar Introduction Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 51 (Circular A), such as legislation enacted after it was published, go to www. 1040nr instructions irs. 1040nr instructions gov/pub51. 1040nr instructions What's New Social security and Medicare tax for 2014. 1040nr instructions  The social security tax rate is 6. 1040nr instructions 2% each for the employee and employer, unchanged from 2013. 1040nr instructions The social security wage base limit is $117,000. 1040nr instructions The Medicare tax rate is 1. 1040nr instructions 45% each for the employee and employer, unchanged from 2013. 1040nr instructions There is no wage base limit for Medicare tax. 1040nr instructions Social security and Medicare taxes apply to the wages of household workers you pay $1,900 or more in cash or an equivalent form of compensation. 1040nr instructions Withholding allowance. 1040nr instructions  The 2014 amount for one withholding allowance on an annual basis is $3,950. 1040nr instructions Change of responsible party. 1040nr instructions  Beginning January 1, 2014, any entity with an employer identification number (EIN) must file Form 8822-B, Change of Address or Responsible Party—Business, to report the latest change to its responsible party. 1040nr instructions Form 8822-B must be filed within 60 days of the change. 1040nr instructions If the change in the identity of your responsible party occurred before 2014, and you have not previously notified the IRS of the change, file Form 8822-B before March 1, 2014, reporting only the most recent change. 1040nr instructions For a definition of "responsible party", see the Form 8822-B instructions. 1040nr instructions Same-sex marriage. 1040nr instructions  For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. 1040nr instructions For more information, see Revenue Ruling 2013-17, 2013-38 I. 1040nr instructions R. 1040nr instructions B. 1040nr instructions 201, available at www. 1040nr instructions irs. 1040nr instructions gov/irb/2013-38_IRB/ar07. 1040nr instructions html. 1040nr instructions Notice 2013-61 provides special administrative procedures for employers to make claims for refund or adjustments of overpayments of social security and Medicare taxes with respect to certain same-sex spouse benefits before expiration of the period of limitations. 1040nr instructions Notice 2013-61, 2013-44 I. 1040nr instructions R. 1040nr instructions B. 1040nr instructions 432, is available at www. 1040nr instructions irs. 1040nr instructions gov/irb/2013-44_IRB/ar10. 1040nr instructions html. 1040nr instructions Reminders Additional Medicare Tax withholding. 1040nr instructions  In addition to withholding Medicare tax at 1. 1040nr instructions 45%, you must withhold a 0. 1040nr instructions 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. 1040nr instructions You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. 1040nr instructions Additional Medicare Tax is only imposed on the employee. 1040nr instructions There is no employer share of Additional Medicare Tax. 1040nr instructions All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. 1040nr instructions For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Services and Payments, in section 15 of Publication 15 (Circular E), Employer's Tax Guide. 1040nr instructions For more information on Additional Medicare Tax, visit IRS. 1040nr instructions gov and enter “Additional Medicare Tax” in the search box. 1040nr instructions Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans. 1040nr instructions  The work opportunity tax credit is available for eligible unemployed veterans who begin work on or after November 22, 2011, and before January 1, 2014. 1040nr instructions Qualified tax-exempt organizations that hire eligible unemployed veterans can claim the work opportunity tax credit against their payroll tax liability using Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. 1040nr instructions For more information, visit IRS. 1040nr instructions gov and enter “work opportunity tax credit” in the search box. 1040nr instructions Outsourcing payroll duties. 1040nr instructions  Employers are responsible to ensure that tax returns are filed and deposits and payments are made, even if the employer contracts with a third party to perform these acts. 1040nr instructions The employer remains responsible if the third party fails to perform any required action. 1040nr instructions If you choose to outsource any of your payroll and related tax duties (that is, withholding, reporting, and paying over social security, Medicare, FUTA, and income taxes) to a third-party payer such as a payroll service provider or reporting agent, visit IRS. 1040nr instructions gov and enter “outsourcing payroll duties” in the search box for helpful information on this topic. 1040nr instructions COBRA premium assistance credit. 1040nr instructions  The credit for COBRA premium assistance payments applies to premiums paid for employees involuntarily terminated between September 1, 2008, and May 31, 2010, and to premiums paid for up to 15 months. 1040nr instructions For more information, see COBRA premium assistance credit under Introduction. 1040nr instructions Compensation paid to H-2A foreign agricultural workers. 1040nr instructions  Report compensation of $600 or more paid to foreign agricultural workers who entered the country on H-2A visas in box 1 of Form W-2, Wage and Tax Statement. 1040nr instructions Compensation paid to H-2A workers for agricultural labor performed in connection with this visa is not subject to social security and Medicare taxes, and therefore should not be reported as wages subject to social security tax (line 2), Medicare tax (line 4), or Additional Medicare Tax withholding (line 6) on Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, and should not be reported as social security wages (box 3) or Medicare wages (box 5) on Form W-2. 1040nr instructions On Form W-2, do not check box 13 (Statutory employee), as H-2A workers are not statutory employees. 1040nr instructions An employer is not required to withhold federal income tax from compensation it pays an H-2A worker for agricultural labor performed in connection with this visa unless the worker asks for withholding and the employer agrees. 1040nr instructions In that case, the worker must give the employer a completed Form W-4, Employee's Withholding Allowance Certificate. 1040nr instructions Federal income tax withheld should be reported on Form 943, line 8, and in box 2 of Form W-2. 1040nr instructions These reporting rules apply when the H-2A worker provides his or her taxpayer identification number (TIN) to the employer. 1040nr instructions For the rules relating to backup withholding and reporting when the H-2A worker does not provide a TIN, see the Instructions for Form 1099-MISC and the Instructions for Form 945. 1040nr instructions Additional employment tax information. 1040nr instructions  Visit the IRS website at www. 1040nr instructions irs. 1040nr instructions gov/businesses and click on Employment Taxes under Businesses Topics. 1040nr instructions For employment tax information by telephone, call 1-800-829-4933 or 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability) Monday–Friday from 7:00 a. 1040nr instructions m. 1040nr instructions –7:00 p. 1040nr instructions m. 1040nr instructions local time (Alaska and Hawaii follow Pacific time). 1040nr instructions Additionally, you can call IRS TeleTax at 1-800-829-4477 for recorded information by topic. 1040nr instructions Disregarded entities and qualified subchapter S subsidiaries (QSubs). 1040nr instructions  Eligible single-owner disregarded entities and QSubs are treated as separate entities for employment tax purposes. 1040nr instructions Eligible single-member entities that have not elected to be taxed as corporations must report and pay employment taxes on wages paid to their employees using the entities' own names and EINs. 1040nr instructions See Regulations sections 1. 1040nr instructions 1361-4(a)(7) and 301. 1040nr instructions 7701-2(c)(2)(iv). 1040nr instructions Differential wage payments. 1040nr instructions  Qualified differential wage payments made by employers to individuals serving in the Armed Forces after 2008 are subject to income tax withholding but not social security, Medicare, or FUTA taxes. 1040nr instructions For more information, see Publication 15 (Circular E). 1040nr instructions Federal tax deposits must be made by electronic funds transfer. 1040nr instructions  You must use electronic funds transfer to make all federal tax deposits. 1040nr instructions Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). 1040nr instructions If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. 1040nr instructions Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. 1040nr instructions EFTPS is a free service provided by the Department of Treasury. 1040nr instructions Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. 1040nr instructions For more information on making federal tax deposits, see How To Deposit in section 7. 1040nr instructions To get more information about EFTPS or to enroll in EFTPS, visit www. 1040nr instructions eftps. 1040nr instructions gov or call 1-800-555-4477 or 1-800-733-4829 (TDD). 1040nr instructions Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax Payment System: A Guide To Getting Started. 1040nr instructions Electronic filing and payment. 1040nr instructions  Now, more than ever before, businesses can enjoy the benefits of filing tax returns and paying their taxes electronically. 1040nr instructions Whether you rely on a tax professional or handle your own taxes, the IRS offers you convenient programs to make it easier. 1040nr instructions Spend less time and worry on taxes and more time running your business. 1040nr instructions Use e-file and the Electronic Federal Tax Payment System (EFTPS) to your benefit. 1040nr instructions For e-file, visit the IRS website at www. 1040nr instructions irs. 1040nr instructions gov/efile for additional information. 1040nr instructions For EFTPS, visit www. 1040nr instructions eftps. 1040nr instructions gov or call EFTPS Customer Service at 1-800-555-4477 (business), 1-800-316-6541 (individual), or 1-800-733-4829 (TDD) for additional information. 1040nr instructions For electronic filing of Form W-2, visit www. 1040nr instructions socialsecurity. 1040nr instructions gov/employer. 1040nr instructions If you are filing your tax return or paying your federal taxes electronically, a valid EIN is required. 1040nr instructions If a valid EIN is not provided, the return or payment will not be processed. 1040nr instructions This may result in penalties and delays in processing your return or payment. 1040nr instructions Electronic funds withdrawal (EFW). 1040nr instructions  If you file Form 943 electronically, you can e-file and e-pay (electronic funds withdrawal) the balance due in a single step using tax preparation software or through a tax professional. 1040nr instructions However, do not use EFW to make federal tax deposits. 1040nr instructions For more information on paying your taxes using EFW, visit the IRS website at www. 1040nr instructions irs. 1040nr instructions gov/e-pay. 1040nr instructions A fee may be charged to file electronically. 1040nr instructions Credit or debit card payments. 1040nr instructions   Employers can pay the balance due shown on Form 943 by credit or debit card. 1040nr instructions Do not use a credit or debit card to make federal tax deposits. 1040nr instructions For more information on paying your taxes with a credit or debit card, visit the IRS website at www. 1040nr instructions irs. 1040nr instructions gov/e-pay. 1040nr instructions When you hire a new employee. 1040nr instructions  Ask each new employee to complete the 2014 Form W-4 or its Spanish version, Formulario W-4(SP), Certificado de Exención de Retenciones del Empleado. 1040nr instructions Also, ask the employee to show you his or her social security card so that you can record the employee's name and social security number accurately. 1040nr instructions If the employee has lost the card or recently changed names, have the employee apply for a duplicate or corrected card. 1040nr instructions If the employee does not have a card, have the employee apply for one on Form SS-5, Application for a Social Security Card. 1040nr instructions See section 1 for more information. 1040nr instructions Eligibility for employment. 1040nr instructions  You must verify that each new employee is legally eligible to work in the United States. 1040nr instructions This includes completing the U. 1040nr instructions S. 1040nr instructions Citizenship and Immigration Services (USCIS) Form I-9, Employment Eligibility Verification. 1040nr instructions You can get the form from USCIS offices or by calling 1-800-870-3676. 1040nr instructions Contact the USCIS at 1-800-375-5283, or visit the USCIS website at www. 1040nr instructions uscis. 1040nr instructions gov for more information. 1040nr instructions New hire reporting. 1040nr instructions   You are required to report any new employee to a designated state new-hire registry. 1040nr instructions A new employee is an employee who has not previously been employed by you or was previously employed by you but has been separated from such prior employment for at least 60 consecutive days. 1040nr instructions Many states accept a copy of Form W-4 with employer information added. 1040nr instructions Visit the Office of Child Support Enforcement's website at www. 1040nr instructions acf. 1040nr instructions hhs. 1040nr instructions gov/programs/cse/newhire for more information. 1040nr instructions Dishonored payments. 1040nr instructions  Any form of payment that is dishonored and returned from a financial institution is subject to a penalty. 1040nr instructions The penalty is $25 or 2% of the payment, whichever is more. 1040nr instructions However, the penalty on dishonored payments of $24. 1040nr instructions 99 or less is an amount equal to the payment. 1040nr instructions For example, a dishonored payment of $18 is charged a penalty of $18. 1040nr instructions Forms in Spanish. 1040nr instructions  You can provide Formulario W-4(SP) in place of Form W-4 to your Spanish-speaking employees. 1040nr instructions For more information, see Publicación 17(SP), El Impuesto Federal sobre los Ingresos (Para Personas Físicas). 1040nr instructions For nonemployees, Formulario W-9(SP), Solicitud y Certificación del Número de Identificación del Contribuyente, may be used in place of Form W-9, Request for Taxpayer Identification Number and Certification. 1040nr instructions References in this publication to Form W-4 or Form W-9 also apply to their equivalent Spanish translations—Formulario W-4(SP) or Formulario W-9(SP). 1040nr instructions Information returns. 1040nr instructions  You may be required to file information returns to report certain types of payments made during the year. 1040nr instructions For example, you must file Form 1099-MISC, Miscellaneous Income, to report payments of $600 or more to persons not treated as employees (for example, independent contractors) for services performed for your trade or business. 1040nr instructions For details about filing Forms 1099 and for information about required electronic filing, see the General Instructions for Certain Information Returns for general information and the separate, specific instructions for each information return that you file (for example, Instructions for Form 1099-MISC). 1040nr instructions Generally, do not use Forms 1099 to report wages or other compensation that you paid to employees; report these amounts on Form W-2. 1040nr instructions See the General Instructions for Forms W-2 and W-3 for details about filing Forms W-2 and for information about required electronic filing. 1040nr instructions If you file 250 or more Forms W-2, you must file them electronically. 1040nr instructions SSA will not accept Forms W-2 and W-3 filed on any magnetic media. 1040nr instructions Information reporting customer service site. 1040nr instructions  The IRS operates the Enterprise Computing Center—Martinsburg, a centralized customer service site, to answer questions about reporting on Forms W-2, W-3, 1099, and other information returns. 1040nr instructions If you have questions related to reporting on information returns, you may call 1-866-455-7438 (toll free), 304-263-8700 (toll call), or 304-267-3367 (TDD/TTY for persons who are deaf, heard of hearing, or have a speech disability). 1040nr instructions The call site can also be reached by email at mccirp@irs. 1040nr instructions gov. 1040nr instructions Do not include tax identification numbers (TINs) or attachments in email correspondence because electronic mail is not secure. 1040nr instructions Web-based application for an employer identification number (EIN). 1040nr instructions  You can apply for an employer identification number (EIN) online by visiting IRS. 1040nr instructions gov and clicking on the Apply for an EIN Online link under Tools. 1040nr instructions When a crew leader furnishes workers to you. 1040nr instructions  Record the crew leader's name, address, and EIN. 1040nr instructions See sections 2 and 10. 1040nr instructions Change of address. 1040nr instructions  Use Form 8822-B to notify the IRS of an address change. 1040nr instructions Do not mail form 8822-B with your employment tax return. 1040nr instructions Ordering forms and publications. 1040nr instructions  You can order your 2013 and 2014 employment tax and information return forms, instructions, and publications online at www. 1040nr instructions irs. 1040nr instructions gov/businesses. 1040nr instructions Click on the Online Ordering for Information Returns and Employer Returns. 1040nr instructions You can also visit www. 1040nr instructions irs. 1040nr instructions gov/formspubs to download other forms and publications. 1040nr instructions Instead of ordering paper Forms W-2 and W-3, consider filing them electronically using the Social Security Administration's (SSA) free e-file service. 1040nr instructions Visit the SSA's Employer W-2 Filing Instructions & Information website at  www. 1040nr instructions socialsecurity. 1040nr instructions gov/employer, to register for Business Services Online. 1040nr instructions You will be able to create and file “fill-in” versions of Forms W-2 with SSA and can print out completed copies of Forms W-2 for filing with state and local governments, distribution to your employees, and for your records. 1040nr instructions Form W-3 will be created for you based on your Forms W-2. 1040nr instructions Tax Questions. 1040nr instructions   If you have a tax question, check the information available on IRS. 1040nr instructions gov or call 1-800-829-4933 (businesses), 1-800-829-1040 (individuals), or 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability) Monday–Friday from 7:00 a. 1040nr instructions m. 1040nr instructions –7:00 p. 1040nr instructions m. 1040nr instructions local time (Alaska and Hawaii follow Pacific time). 1040nr instructions We cannot answer tax questions sent to the address provided later for comments and suggestions. 1040nr instructions Recordkeeping. 1040nr instructions  Keep all records of employment taxes for at least 4 years. 1040nr instructions These should be available for IRS review. 1040nr instructions Your records should include the following information. 1040nr instructions Your employer identification number (EIN). 1040nr instructions Amounts and dates of all wage, annuity, and pension payments. 1040nr instructions Names, addresses, social security numbers, and occupations of employees and recipients. 1040nr instructions Any employee copies of Forms W-2 and W-2c returned to you as undeliverable. 1040nr instructions Dates of employment for each employee. 1040nr instructions Periods for which employees and recipients were paid while absent due to sickness or injury and the amount and weekly rate of payments you or third-party payers made to them. 1040nr instructions Copies of employees' and recipients' income tax withholding allowance certificates (Forms W-4, W-4(SP), W-4P, and W-4S). 1040nr instructions Dates and amounts of tax deposits you made and acknowledgment numbers for deposits made by EFTPS. 1040nr instructions Copies of returns filed and confirmation numbers. 1040nr instructions Records of fringe benefits and expense reimbursements provided to your employees, including substantiation. 1040nr instructions If a crew leader furnished you with farmworkers, you must keep a record of the name, permanent mailing address, and EIN of the crew leader. 1040nr instructions If the crew leader has no permanent mailing address, record his or her present address. 1040nr instructions Private delivery services. 1040nr instructions  You can use certain private delivery services designated by the IRS to send tax returns and payments. 1040nr instructions The list includes only the following. 1040nr instructions DHL Express (DHL): DHL Same Day Service. 1040nr instructions Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First. 1040nr instructions United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. 1040nr instructions M. 1040nr instructions , UPS Worldwide Express Plus, and UPS Worldwide Express. 1040nr instructions For the IRS mailing address to use if you are using a private delivery service, go to IRS. 1040nr instructions gov and enter "private delivery service" in the search box. 1040nr instructions Your private delivery service can tell you how to get written proof of the mailing date. 1040nr instructions Private delivery services cannot deliver items to P. 1040nr instructions O. 1040nr instructions boxes. 1040nr instructions You must use the U. 1040nr instructions S. 1040nr instructions Postal Service to mail any item to an IRS P. 1040nr instructions O. 1040nr instructions box address. 1040nr instructions Photographs of missing children. 1040nr instructions  The IRS is a proud partner with the National Center for Missing and Exploited Children. 1040nr instructions Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 1040nr instructions You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. 1040nr instructions Calendar The following are important dates and responsibilities. 1040nr instructions See section 7 for information about depositing taxes reported on Forms 941, 943, 944, and 945. 1040nr instructions Also see Publication 509, Tax Calendars. 1040nr instructions   If any date shown below for filing a return, furnishing a form, or depositing taxes falls on a Saturday, Sunday, or legal holiday, the due date is the next business day. 1040nr instructions A statewide legal holiday delays a filing due date only if the IRS office where you are required to file is located in that state. 1040nr instructions However, a statewide legal holiday does not delay the due date of federal tax deposits. 1040nr instructions See Deposits on Business Days Only in section 7. 1040nr instructions For any filing due date, you will meet the “file” or “furnish” requirement if the envelope containing the return or form is properly addressed, contains sufficient postage, and is postmarked by the U. 1040nr instructions S. 1040nr instructions Postal Service on or before the due date, or sent by an IRS-designated delivery service on or before the due date. 1040nr instructions See Private delivery services under Reminders. 1040nr instructions By January 31 . 1040nr instructions   File Form 943. 1040nr instructions See section 8 for more information on Form 943. 1040nr instructions If you deposited all Form 943 taxes when due, you have 10 additional calendar days to file. 1040nr instructions Furnish each employee with a completed Form W-2. 1040nr instructions Furnish each recipient to whom you paid $600 or more in nonemployee compensation with a completed Form 1099 (for example, Form 1099-MISC). 1040nr instructions File Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. 1040nr instructions See section 10 for more information on FUTA. 1040nr instructions If you deposited all the FUTA tax when due, you have 10 additional calendar days to file. 1040nr instructions File Form 945, Annual Return of Withheld Federal Income Tax, to report any nonpayroll federal income tax withheld in 2013. 1040nr instructions If you deposited all Form 945 taxes when due, you have 10 additional calendar days to file. 1040nr instructions By February 15. 1040nr instructions  Ask for a new Form W-4 or Formulario W-4(SP) from each employee who claimed exemption from federal income tax withholding last year. 1040nr instructions On February 16. 1040nr instructions  Any Form W-4 claiming exemption from withholding for the previous year has now expired. 1040nr instructions Begin withholding for any employee who previously claimed exemption from withholding but has not given you a new Form W-4 for the current year. 1040nr instructions If the employee does not give you a new Form W-4, withhold tax based on the last valid Form W-4 you have for the employee that does not claim exemption from withholding or, if one does not exist, as if he or she is single with zero withholding allowances. 1040nr instructions See section 5 for more information. 1040nr instructions If the employee furnishes a new Form W-4 claiming exemption from withholding after February 15, you may apply the exemption to future wages, but do not refund taxes withheld while the exempt status was not in place. 1040nr instructions By February 28. 1040nr instructions   File paper Forms 1099 and 1096. 1040nr instructions File Copy A of all paper Forms 1099 with Form 1096, Annual Summary and Transmittal of U. 1040nr instructions S. 1040nr instructions Information Returns, with the IRS. 1040nr instructions For electronically filed returns, see By March 31 below. 1040nr instructions File paper Forms W-2 and W-3. 1040nr instructions File Copy A of all paper Forms W-2 with Form W-3, Transmittal of Wage and Tax Statements, with the SSA. 1040nr instructions For electronically filed returns, see By March 31 next. 1040nr instructions By March 31. 1040nr instructions   File electronic Forms W-2 and 1099. 1040nr instructions File electronic Forms W-2 with the SSA and Forms 1099 with the IRS. 1040nr instructions For more information on reporting Form W-2 information to the SSA electronically, visit the SSA's Employer W-2 Filing Instructions & Information webpage at www. 1040nr instructions socialsecurity. 1040nr instructions gov/employer. 1040nr instructions For information on filing information returns electronically with the IRS, see Publication 1220, Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935, and W-2G. 1040nr instructions By April 30, July 31, October 31, and January 31. 1040nr instructions   Deposit FUTA taxes. 1040nr instructions Deposit FUTA tax if the undeposited amount is over $500. 1040nr instructions Before December 1. 1040nr instructions  Remind employees to submit a new Form W-4 if their marital status or withholding allowances have changed or will change for the next year. 1040nr instructions Introduction This publication is for employers of agricultural workers (farmworkers). 1040nr instructions It contains information that you may need to comply with the laws for agricultural labor (farmwork) relating to social security and Medicare taxes, FUTA tax, and withheld federal income tax (employment taxes). 1040nr instructions Agricultural employers report social security and Medicare taxes and withheld federal income tax on Form 943 and report FUTA tax on Form 940. 1040nr instructions If you have nonfarm employees, see Publication 15 (Circular E). 1040nr instructions If you have employees in the U. 1040nr instructions S. 1040nr instructions Virgin Islands, Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands, see Publication 80 (Circular SS). 1040nr instructions Publication 15-A, Employer's Supplemental Tax Guide, contains more employment-related information, including information about sick pay and pension income. 1040nr instructions 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. 1040nr instructions Comments and suggestions. 1040nr instructions   We welcome your comments about this publication and your suggestions for future editions. 1040nr instructions   You can write to us at the following address:  Internal Revenue Service Tax Forms and Publications Division  1111 Constitution Ave. 1040nr instructions NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. 1040nr instructions Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 1040nr instructions   You can also send us comments from www. 1040nr instructions irs. 1040nr instructions gov/formspubs. 1040nr instructions Click on More Information and then click on Comment on Tax Forms and Publications. 1040nr instructions   Although we cannot respond individually to each email, we do appreciate your feedback and will consider your comments as we revise our tax forms, instructions, and publications. 1040nr instructions COBRA premium assistance credit. 1040nr instructions   The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) provides certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates. 1040nr instructions COBRA generally covers multiemployer health plans and health plans maintained by private-sector employers (other than churches) with 20 or more full and part-time employees. 1040nr instructions Parallel requirements apply to these plans under the Employee Retirement Income Security Act of 1974 (ERISA). 1040nr instructions Under the Public Health Service Act, COBRA requirements apply also to health plans covering state or local government employees. 1040nr instructions Similar requirements apply under the Federal Employees Health Benefits Program and under some state laws. 1040nr instructions For the premium assistance (or subsidy) discussed below, these requirements are all referred to as COBRA requirements. 1040nr instructions   Under the American Recovery and Reinvestment Act of 2009 (ARRA), employers are allowed a credit against “payroll taxes” (referred to in this publication as “employment taxes”) for providing COBRA premium assistance to assistance eligible individuals. 1040nr instructions For periods of COBRA continuation coverage beginning after February 16, 2009, a group health plan must treat an assistance eligible individual as having paid the required COBRA continuation coverage premium if the individual elects COBRA coverage and pays 35% of the amount of the premium. 1040nr instructions   An assistance eligible individual is a qualified beneficiary of an employer's group health plan who is eligible for COBRA continuation coverage during the period beginning September 1, 2008, and ending May 31, 2010, due to the involuntarily termination from employment of a covered employee during the period and elects continuation COBRA coverage. 1040nr instructions The assistance for the coverage can last up to 15 months. 1040nr instructions   Employees terminated during the period beginning September 1, 2008, and ending May 31, 2010, who received a severance package that delayed the start of the COBRA continuation coverage, may still be eligible for premium assistance for COBRA continuation coverage. 1040nr instructions For more information, see Notice 2009-27, 2009-16 I. 1040nr instructions R. 1040nr instructions B. 1040nr instructions 838, available at www. 1040nr instructions irs. 1040nr instructions gov/irb/2009-16_irb/ar09. 1040nr instructions html. 1040nr instructions   Administrators of the group health plans (or other entities) that provide or administer COBRA continuation coverage must provide notice to assistance eligible individuals of the COBRA premium assistance. 1040nr instructions   The 65% of the premium not paid by the assistance eligible individual is reimbursed to the employer maintaining the group health plan. 1040nr instructions The reimbursement is made through a credit against the employer's employment tax liabilities. 1040nr instructions For information on how to claim the credit, see the Instructions for Form 943. 1040nr instructions The credit is treated as a deposit made on the first day of the return period. 1040nr instructions In the case of a multiemployer plan, the credit is claimed by the plan, rather than the employer. 1040nr instructions In the case of an insured plan subject to state law continuation coverage requirements, the credit is claimed by the insurance company, rather than the employer. 1040nr instructions   Anyone claiming the credit for COBRA premium assistance payments must maintain the following information to support their claim, including the following. 1040nr instructions Information on the receipt of the assistance eligible individuals' 35% share of the premium including dates and amounts. 1040nr instructions In the case of an insurance plan, a copy of invoice or other supporting statement from the insurance carrier and proof of timely payment of the full premium to the insurance carrier required under COBRA. 1040nr instructions In the case of a self-insured plan, proof of the premium amount and proof of the coverage provided to the assistance eligible individuals. 1040nr instructions Attestation of involuntary termination, including the date of the involuntary termination for each covered employee whose involuntary termination is the basis for eligibility for the subsidy. 1040nr instructions Proof of each assistance eligible individual's eligibility for COBRA coverage and the election of COBRA coverage. 1040nr instructions A record of the social security numbers (SSNs) of all covered employees, the amount of the subsidy reimbursed with respect to each covered employee, and whether the subsidy was for one individual or two or more individuals. 1040nr instructions   For more information, visit IRS. 1040nr instructions gov and enter “COBRA” in the search box. 1040nr instructions Useful Items - You may want to see: Publication 15 (Circular E), Employer's Tax Guide 15-A Employer's Supplemental Tax Guide 15-B Employer's Tax Guide to Fringe Benefits 225 Farmer's Tax Guide 535 Business Expenses 583 Starting a Business and Keeping Records 1635 Employer Identification Number: Understanding Your EIN Prev  Up  Next   Home   More Online Publications