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Tax amended 13. Tax amended   Employment Taxes Table of Contents What's New for 2013 What's New for 2014 Reminders Important Dates for 2014 Introduction Topics - This chapter discusses: Useful Items - You may want to see: Farm Employment Family Employees Crew Leaders Social Security and Medicare TaxesReligious exemption. Tax amended Wage limit. Tax amended Federal Income Tax WithholdingNew Form W-4 for 2014. Tax amended Required Notice to Employees About Earned Income Credit (EIC) Reporting and Paying Social Security, Medicare, and Withheld Federal Income TaxesElectronic deposit requirement. Tax amended Federal Unemployment (FUTA) TaxReporting and Paying FUTA Tax What's New for 2013 Social security and Medicare tax for 2013. Tax amended  The employee tax rate for social security is 6. Tax amended 2%. Tax amended Previously, the employee tax rate for social security was 4. Tax amended 2%. Tax amended The employer tax rate for social security remains unchanged at 6. Tax amended 2%. Tax amended The social security wage base limit is $113,700. Tax amended The Medicare tax rate is 1. Tax amended 45% each for the employee and employer, unchanged from 2012. Tax amended There is no wage base limit for Medicare tax. Tax amended Additional Medicare Tax. Tax amended  In addition to withholding Medicare tax at 1. Tax amended 45%, you must withhold a 0. Tax amended 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Tax amended 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. Tax amended Additional Medicare Tax is only imposed on the employee. Tax amended There is no employer share of Additional Medicare Tax. Tax amended All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 threshold. Tax amended 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. Tax amended For more information on Additional Medicare Tax, visit IRS. Tax amended gov and enter “Additional Medicare Tax” in the search box. Tax amended Leave-based donation programs to aid victims of Hurricane Sandy. Tax amended  Under these programs, employees may donate their vacation, sick, or personal leave in exchange for employer cash payments made before January 1, 2014, to qualified tax-exempt organizations providing relief for the victims of Hurricane Sandy. Tax amended The donated leave will not be included in the income or wages of the employee. Tax amended The employer may deduct the cash payments as business expenses or charitable contributions. Tax amended For more information, see Notice 2012-69, 2012-51 I. Tax amended R. Tax amended B. Tax amended 712, available at www. Tax amended irs. Tax amended gov/irb/2012-51_IRB/ar09. Tax amended html. Tax amended Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans extended. Tax amended  The work opportunity tax credit is now available for eligible unemployed veterans who begin work before January 1, 2014. Tax amended Previously, the credit was available for unemployed veterans who began work on or after November 22, 2011, and before January 1, 2013. Tax amended 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. Tax amended For more information, visit IRS. Tax amended gov and enter “work opportunity credit” in the search box. Tax amended What's New for 2014 Social security and Medicare tax for 2014. Tax amended  The employee and employer tax rates for social security and the maximum amount of wages subject to social security tax for 2014 will be discussed in Publication 51 (Circular A), Agricultural Employer's Tax Guide (For use in 2014). Tax amended The Medicare tax rate for 2014 will also be discussed in Publication 51 (Circular A) (For use in 2014). Tax amended There is no limit on the amount of wages subject to Medicare tax. Tax amended Reminders Additional employment tax information for farmers. Tax amended  See Publication 51 (Circular A) for more detailed guidance on employment taxes. Tax amended For the latest information about employment tax developments impacting farmers, go to www. Tax amended irs. Tax amended gov/pub51. Tax amended Correcting a previously filed Form 943. Tax amended  If you discover an error on a previously filed Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, make the correction using Form 943-X, Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund. Tax amended Form 943-X is filed separately from Form 943. Tax amended For more information on correcting Form 943, see the Instructions for Form 943-X. Tax amended Federal tax deposits must be made by electronic funds transfer. Tax amended  You must use electronic funds transfer to make all federal tax deposits. Tax amended Generally, electronic funds transfers are made using the Electronic Federal Tax Payment System (EFTPS). Tax amended 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. Tax amended Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. Tax amended EFTPS is a free service provided by the Department of Treasury. Tax amended Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Tax amended For more information on making federal tax deposits, see section 7 of Publication 51 (Circular A). Tax amended To get more information about EFTPS or to enroll in EFTPS, visit www. Tax amended eftps. Tax amended gov or call 1-800-555-4477 or 1-800-733-4829 (TDD). Tax amended Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax Payment System: A Guide To Getting Started. Tax amended Important Dates for 2014 You should take the action indicated by the dates listed. Tax amended See By February 15 and On February 16 for Form W-4, Employee's Withholding Allowance Certificate, information. Tax amended Due dates for deposits of withheld federal income taxes, social security taxes, and Medicare taxes are not listed here. Tax amended For these dates, see Publication 509, Tax Calendars (For use in 2014). Tax amended Note. Tax amended  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. Tax amended A statewide legal holiday delays a filing or furnishing due date only if the IRS office where you are required to file a return or furnish a form is located in that state. Tax amended For any due date, you will meet the “file” or “furnish” date requirement if the envelope containing the tax return or form is properly addressed, contains sufficient postage, and is postmarked by the U. Tax amended S. Tax amended Postal Service by the due date, or sent by an IRS-designated delivery service by the due date. Tax amended See Private delivery services in Publication 51 (Circular A). Tax amended Federal tax deposits can only be made by electronic funds transfer and are governed by legal holidays in the District of Columbia. Tax amended Statewide holidays no longer apply. Tax amended For a list of legal holidays that delay the due date of a federal tax deposit, see section 7 of Publication 51 (Circular A). Tax amended Fiscal year taxpayers. Tax amended  The due dates listed below apply whether you use a calendar or a fiscal year. Tax amended By January 31. Tax amended   File Form 943 with the IRS. Tax amended If you deposited all Form 943 taxes when due, you have 10 additional days to file. Tax amended Furnish each employee with a completed Form W-2, Wage and Tax Statement. Tax amended Furnish each recipient to whom you paid $600 or more in nonemployee compensation with a completed Form 1099 (for example, Form 1099-MISC). Tax amended File Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, with the IRS. Tax amended If you deposited all the FUTA tax when due, you have 10 additional days to file. Tax amended File Form 945, Annual Return of Withheld Federal Income Tax, with the IRS to report any nonpayroll income tax withheld during 2013. Tax amended If you deposited all Form 945 taxes when due, you have 10 additional days to file. Tax amended By February 15. Tax amended  Ask for a new Form W-4 or Formulario W-4(SP), Certificado de Exención de Retenciones del Empleado, from each employee who claimed exemption from federal income tax withholding last year. Tax amended On February 16. Tax amended  Any Form W-4 claiming exemption from withholding for the previous year has now expired. Tax amended 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. Tax amended If the employee does not give you a new Form W-4, withhold taxes 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. Tax amended 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. Tax amended By February 28. Tax amended   File paper Forms 1099 and 1096. Tax amended File Copy A of all paper Forms 1099 with Form 1096, Annual Summary and Transmittal of U. Tax amended S. Tax amended Information Returns, with the IRS. Tax amended For electronically filed returns, see By March 31 below. Tax amended File paper Forms W-2 and W-3. Tax amended File Copy A of all paper Forms W-2 with Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration (SSA). Tax amended For electronically filed returns, see By March 31 below. Tax amended By March 31. Tax amended   File electronic Forms W-2 and 1099. Tax amended File electronic Forms W-2 with the SSA and Forms 1099 with the IRS. Tax amended 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. Tax amended socialsecurity. Tax amended gov/employer. Tax amended For information on filing information returns electronically with the IRS, see Publication 1220, Specifications for Filing Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935, and W-2G Electronically. Tax amended By April 30, July 31, October 31, and January 31. Tax amended   Deposit FUTA taxes. Tax amended Deposit FUTA tax due if it is more than $500. Tax amended Before December 1. Tax amended  Remind employees to submit a new Form W-4 if their withholding allowances have changed or will change for the next year. Tax amended Introduction You are generally required to withhold federal income tax from the wages of your employees. Tax amended You may also be subject to social security and Medicare taxes under the Federal Insurance Contributions Act (FICA) and federal unemployment tax under the Federal Unemployment Tax Act (FUTA). Tax amended You must also withhold Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Tax amended This chapter includes information about these taxes. Tax amended You must also pay self-employment tax on your net earnings from farming. Tax amended See chapter 12 for information on self-employment tax. Tax amended Topics - This chapter discusses: Farm employment, Family employees, Crew leaders, Social security and Medicare taxes, Additional Medicare Tax withholding, Federal income tax withholding, Reporting and paying social security, Medicare, and withheld federal income taxes, and FUTA tax. Tax amended 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 51 (Circular A), Agricultural Employer's Tax Guide 926 Household Employer's Tax Guide Form (and Instructions) W-2 Wage and Tax Statement W-4 Employee's Withholding Allowance Certificate W-9 Request for Taxpayer Identification Number and Certification 940 Employer's Annual Federal Unemployment (FUTA) Tax Return 943 Employer's Annual Federal Tax Return for Agricultural Employees 943-X Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund See chapter 16 for information about getting publications and forms. Tax amended Farm Employment In general, you are an employer of farmworkers if your employees do any of the following types of work. Tax amended Raising or harvesting agricultural or horticultural products on a farm, including raising and feeding of livestock. Tax amended Operating, managing, conserving, improving, or maintaining your farm and its tools and equipment. Tax amended Services performed in salvaging timber, or clearing land of brush and other debris, left by a hurricane (also known as hurricane labor). Tax amended Handling, processing, or packaging any agricultural or horticultural commodity if you produced more than half of the commodity (for a group of up to 20 unincorporated operators, all of the commodity). Tax amended Work related to cotton ginning, turpentine, gum resin products, or the operation and maintenance of irrigation facilities. Tax amended For more information, see Publication 51 (Circular A). Tax amended Generally, a worker who performs services for you is your employee if you have the right to control what will be done and how it will be done. Tax amended This is so even when you give the employee freedom of action. Tax amended What matters is that you have the right to control the details of how the services are performed. Tax amended You are responsible for withholding and paying employment taxes for your employees. Tax amended You are also required to file employment tax returns. Tax amended These requirements do not apply to amounts that you pay to independent contractors. Tax amended See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. Tax amended If you employ a family of workers, each worker subject to your control (not just the head of the family) is an employee. Tax amended Special rules apply to crew leaders. Tax amended See Crew Leaders , later. Tax amended Employer identification number (EIN). Tax amended   If you have employees, you must have an EIN. Tax amended If you do not have an EIN, you may apply for one online. Tax amended Go to IRS. Tax amended gov and click on the Apply for an EIN Online link under Tools. Tax amended You may also apply for an EIN by calling 1-800-829-4933 or 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability). Tax amended The hours of operation for both numbers are Monday–Friday form 7:00 a. Tax amended m. Tax amended –7:00 p. Tax amended m. Tax amended local time (Alaska and Hawaii follow Pacific time). Tax amended You can also fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. Tax amended Employee's social security number (SSN). Tax amended   An employee who does not have an SSN should submit Form SS-5, Application for a Social Security Card, to the Social Security Administration (SSA). Tax amended Form SS-5 is available from any SSA office or by calling 1-800-772-1213 (operates 24 hours per day). Tax amended It is also available from the SSA's website at www. Tax amended socialsecurity. Tax amended gov. Tax amended   The employee must furnish evidence of age, identity, and U. Tax amended S. Tax amended citizenship or lawful immigration status permitting employment with the Form SS-5. Tax amended An employee who is age 18 or older must appear in person with this evidence at an SSA office. Tax amended Form I-9. Tax amended    You must verify that each new employee is legally eligible to work in the United States. Tax amended This includes completing the Form I-9, Employment Eligibility Verification. Tax amended Form I-9 is available from the U. Tax amended S. Tax amended Citizenship and Immigration Services (USCIS) offices or by calling the Bureau of Citizenship and Immigration Services Forms Request Line at 1-800-870-3676. Tax amended Form I-9 is also available from the USCIS website at www. Tax amended uscis. Tax amended gov. Tax amended You can also contact the USCIS at 1-800-375-5283 for more information. Tax amended New hire reporting. Tax amended   You are required to report any new employee to a designated state new hire registry. Tax amended Many states accept a copy of Form W-4 with employer information added. Tax amended Visit the Office of Child Support Enforcement website at www. Tax amended acf. Tax amended hhs. Tax amended gov/programs/cse/newhire for more information. Tax amended Family Employees Generally, the wages you pay to family members who are your employees are subject to employment taxes. Tax amended However, certain exemptions may apply to wages paid to your child, spouse, or parent. Tax amended Exemptions for your child. Tax amended   Payments for the services of your child under age 18 who works for you in your trade or business (including a farm) are not subject to social security and Medicare taxes. Tax amended However, see Nonexempt services of a child or spouse , later. Tax amended Payments for the services of your child under age 21 employed by you in other than a trade or business, such as payments for household services in your home, are also not subject to social security or Medicare taxes. Tax amended Payments for the services of your child under age 21 employed by you, whether or not in your trade or business, are not subject to FUTA tax. Tax amended Although not subject to social security, Medicare, or FUTA tax, the child's wages still may be subject to federal income tax withholding. Tax amended Exemptions for your spouse. Tax amended   Payments for the services of your spouse who works for you in your trade or business are subject to federal income tax withholding and social security and Medicare taxes, but not FUTA tax. Tax amended   Payments for the services of your spouse employed by you in other than a trade or business, such as payments for household services in your home, are not subject to social security, Medicare, or FUTA taxes. Tax amended Nonexempt services of a child or spouse. Tax amended   Payments for the services of your child or spouse are subject to federal income tax withholding as well as social security, Medicare, and FUTA taxes if he or she works for any of the following entities. Tax amended A corporation, even if it is controlled by you. Tax amended A partnership, even if you are a partner. Tax amended This does not apply to wages paid to your child if each partner is a parent of the child. Tax amended An estate or trust, even if it is the estate of a deceased parent. Tax amended In these situations, the child or spouse is considered to work for the corporation, partnership, or estate, not you. Tax amended Exemptions for your parent. Tax amended   Payments for the services of your parent employed by you in your trade or business are subject to federal income tax withholding and social security and Medicare taxes. Tax amended Social security and Medicare taxes do not apply to wages paid to your parent for services not in your trade or business, but they do apply to payments for household services in your home if both the following conditions are satisfied. Tax amended You have a child living in your home who is under age 18 or has a physical or mental condition that requires care by an adult for at least 4 continuous weeks in a calendar quarter. Tax amended You are a widow or widower; or divorced and not remarried; or have a spouse in the home who, because of a physical or mental condition, cannot care for your child for at least 4 continuous weeks in the quarter. Tax amended   Wages you pay to your parent are not subject to FUTA tax, regardless of the type of services provided. Tax amended Qualified joint venture. Tax amended   If spouses elect to be treated as a qualified joint venture instead of a partnership, either spouse may report and pay the employment taxes due on the wages paid to employees using the EIN of that spouse's sole proprietorship. Tax amended For more information about qualified joint ventures, see chapter 12. Tax amended Crew Leaders If farmworkers are provided by a crew leader, the crew leader may be the employer of the workers. Tax amended Social security and Medicare taxes. Tax amended   For social security and Medicare tax purposes, the crew leader is the employer of the workers if both of the following requirements are met. Tax amended The crew leader pays (either on his or her own behalf or on behalf of the farmer) the workers for their farm labor. Tax amended The crew leader has not entered into a written agreement with the farmer under which the crew leader is designated as an employee of the farmer. Tax amended Federal income tax withholding. Tax amended   If the crew leader is the employer for social security and Medicare tax purposes, the crew leader is the employer for federal income tax withholding purposes. Tax amended Federal unemployment (FUTA) tax. Tax amended   For FUTA tax purposes, the crew leader is the employer of the workers if, in addition to the earlier requirements, either of the following requirements are met. Tax amended The crew leader is registered under the Migrant and Seasonal Agricultural Worker Protection Act. Tax amended Substantially all crew members operate or maintain mechanized equipment provided by the crew leader as part of the service to the farmer. Tax amended   The farmer is the employer of workers furnished by a crew leader in all other situations. Tax amended In addition, the farmer is the employer of workers furnished by a registered crew leader if the workers are the employees of the farmer under the common-law test. Tax amended For example, some farmers employ individuals to recruit farmworkers exclusively for them. Tax amended Although these individuals may be required to register under the Migrant and Seasonal Agricultural Worker Protection Act, the workers are employed directly by the farmer. Tax amended The farmer is the employer in these cases. Tax amended For information about common-law employees, see section 1 of Publication 15-A. Tax amended For information about crew leaders, see the Department of Labor website at www. Tax amended dol. Tax amended gov/whd/regs/compliance/whdfs49. Tax amended htm. Tax amended Social Security and Medicare Taxes All cash wages you pay to an employee during the year for farmwork are subject to social security and Medicare taxes if you meet either of the following tests. Tax amended You pay the employee $150 or more in cash wages (count all wages paid on a time, piecework, or other basis) during the year for farmwork (the $150 test). Tax amended The $150 test applies separately to each farmworker that you employ. Tax amended If you employ a family of workers, each member is treated separately. Tax amended Do not count wages paid by other employers. Tax amended You pay cash and noncash wages of $2,500 or more during the year to all your employees for farmwork (the $2,500 test). Tax amended If the $2,500 test for the group is not met, the $150 test for an employee still applies. Tax amended Exceptions. Tax amended   Annual cash wages of less than $150 you pay to a seasonal farmworker are not subject to social security and Medicare taxes, even if you pay $2,500 or more to all your farmworkers. Tax amended However, these wages count toward the $2,500 test for determining whether other farmworkers' wages are subject to social security and Medicare taxes. Tax amended   A seasonal farmworker is a worker who: Works as a hand-harvest laborer, Is paid piece rates in an operation usually paid on this basis in the region of employment, Commutes daily from his or her permanent home to the farm, and Worked in agriculture less than 13 weeks in the preceding calendar year. Tax amended   See Family Employees , earlier, for certain exemptions from social security and Medicare taxes that apply to your child, spouse, and parent. Tax amended Religious exemption. Tax amended   An exemption from social security and Medicare taxes is available to members of a recognized religious group or division opposed to public insurance. Tax amended This exemption is available only if both the employee and the employer are members of the group or division. Tax amended   For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. Tax amended Cash wages. Tax amended   Only cash wages paid to farmworkers are subject to social security and Medicare taxes. Tax amended Cash wages include checks, money orders, and any kind of money or cash. Tax amended   Only cash wages subject to social security and Medicare taxes are credited to your employees for social security benefit purposes. Tax amended Payments not subject to these taxes, such as commodity wages, do not contribute to your employees' social security coverage. Tax amended For information about social security benefits, contact the SSA at 1-800-772-1213 or online at www. Tax amended socialsecurity. Tax amended gov. Tax amended Noncash wages. Tax amended    Noncash wages include food, lodging, clothing, transportation passes, and other goods and services. Tax amended Noncash wages paid to farmworkers, including commodity wages, are not subject to social security and Medicare taxes. Tax amended However, they are subject to these taxes if the substance of the transaction is a cash payment. Tax amended For information on lodging provided as a condition of employment, see Publication 15-B. Tax amended   Report the value of noncash wages in box 1 of Form W-2 together with cash wages. Tax amended Do not show noncash wages in box 3 or in box 5, (unless the substance of the transaction is a cash payment). Tax amended Tax rates and social security wage limit. Tax amended   For 2013, the employer and the employee will pay the following taxes. Tax amended The employer and employee each pay 6. Tax amended 2% of cash wages for social security tax (old-age, survivors, and disability insurance). Tax amended The employer and employee each pay 1. Tax amended 45% of cash wages for Medicare tax (hospital insurance). Tax amended The employee pays 0. Tax amended 9% of cash wages in excess of $200,000 for Additional Medicare Tax. Tax amended Wage limit. Tax amended   The limit on wages subject to the social security tax for 2013 is $113,700. Tax amended There is no limit on wages subject to the Medicare tax. Tax amended All covered wages are subject to the Medicare tax. Tax amended Additionally, all wages in excess of $200,000 are subject to Additional Medicare Tax withholding. Tax amended Paying employee's share. Tax amended   If you would rather pay the employee's share of social security and Medicare taxes without deducting it from his or her wages, you may do so. Tax amended It is additional income to the employee. Tax amended You must include it in box 1 of the employee's Form W-2, but do not count it as social security and Medicare wages (boxes 3 and 5 on Form W-2) or as wages for federal unemployment (FUTA) tax purposes. Tax amended Example. Tax amended Jane operates a small family fruit farm. Tax amended She employs day laborers in the picking season to enable her to timely get her crop to market. Tax amended She does not deduct the employees' share of social security and Medicare taxes from their pay; instead, she pays it on their behalf. Tax amended When her accountant, Susan, prepares the employees' Forms W-2, she adds each employee's share of social security and Medicare taxes paid by Jane to the employee's wage income (box 1 of Form W-2), but does not include it in box 3 (social security wages) or box 5 (Medicare wages and tips). Tax amended For 2013, Jane paid Mary $1,000 during the year. Tax amended Susan enters $1,076. Tax amended 50 in box 1 of Mary's Form W-2 ($1,000 wages plus $76. Tax amended 50 social security and Medicare taxes paid for Mary). Tax amended She enters $1,000 in boxes 3 and 5 of Mary's Form W-2. Tax amended Additional Medicare Tax. Tax amended   In addition to withholding Medicare tax at 1. Tax amended 45%, you must withhold a 0. Tax amended 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Tax amended 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. Tax amended Additional Medicare Tax is only imposed on the employee. Tax amended There is no employer share of Additional Medicare Tax. Tax amended All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 threshold. Tax amended   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). Tax amended For more information on Additional Medicare Tax, visit IRS. Tax amended gov and enter “Additional Medicare Tax” in the search box. Tax amended Federal Income Tax Withholding If the cash wages you pay to farmworkers are subject to social security and Medicare taxes, they are also subject to federal income tax withholding. Tax amended Although noncash wages are subject to federal income tax, withhold income tax only if you and the employee agree to do so. Tax amended The amount to withhold is figured on gross wages without taking out social security and Medicare taxes, union dues, insurance, etc. Tax amended Form W-4. Tax amended   Generally, the amount of federal income tax you withhold is based on the employee's marital status and withholding allowances claimed on the employee's Form W-4. Tax amended In general, an employee can claim withholding allowances on Form W-4 equal to the number of exemptions the employee will be entitled to claim on his or her tax return. Tax amended An employee may also be able to claim a special withholding allowance and allowances for estimated deductions and credits. Tax amended   Do not withhold federal income tax from the wages of an employee who, by filing Form W-4, certifies that he or she had no federal income tax liability last year and anticipates no liability for the current year. Tax amended   You should give each new employee a Form W-4 as soon as you hire the employee. Tax amended For Spanish-speaking employees, you may use Formulario W-4(SP) which is the Spanish translation of Form W-4. Tax amended Have the employee complete and return the form to you before the first payday. Tax amended If the employee does not return the completed form, you must withhold federal income tax as if the employee is single and claims no withholding allowances. Tax amended New Form W-4 for 2014. Tax amended   You should make the 2014 Form W-4 available to your employees and encourage them to check their income tax withholding for 2014. Tax amended Those employees who owed a large amount of tax or received a large refund for 2013 may want to submit a new Form W-4. Tax amended You cannot accept substitute Forms W-4 developed by employees. Tax amended How to figure withholding. Tax amended   You can use one of several methods to determine the amount to withhold. Tax amended The methods are described in Publication 51 (Circular A), which contains tables showing the correct amount of federal income tax you should withhold. Tax amended Publication 51 (Circular A) also contains additional information about federal income tax withholding. Tax amended Nonemployee compensation. Tax amended   Generally, you do not have to withhold federal income tax on payments for services to individuals who are not your employees. Tax amended However, you may be required to report these payments on Form 1099-MISC, Miscellaneous Income, and to withhold under the backup withholding rules. Tax amended For more information, see the Instructions for Form 1099-MISC. Tax amended Required Notice to Employees About Earned Income Credit (EIC) You must provide notification about EIC to each employee who worked for you at any time during the year and from whom you did not withhold any federal income tax. Tax amended However, you do not have to notify employees who claim exemption from federal income tax withholding on Form W-4. Tax amended You meet the notification requirement by giving each employee any of the following. Tax amended Form W-2, which contains EIC notification on the back of Copy B. Tax amended A substitute Form W-2 with the exact EIC wording shown on the back of copy B of Form W-2. Tax amended Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC). Tax amended Your own written statement with the exact wording of Notice 797. Tax amended For more information, see Publication 51 (Circular A). Tax amended Reporting and Paying Social Security, Medicare, and Withheld Federal Income Taxes You must withhold federal income, social security, and Medicare taxes required to be withheld from the salaries and wages of your employees. Tax amended You are liable for the payment of these taxes to the federal government whether or not you collect them from your employees. Tax amended If, for example, you withhold less than the correct tax from an employee's wages, you are still liable for the full amount. Tax amended You must also pay the employer's share of social security and Medicare taxes. Tax amended There is no employer share of Additional Medicare Tax. Tax amended Form 943. Tax amended   Report withheld federal income tax, social security tax, and Medicare tax on Form 943. Tax amended Your 2013 Form 943 is due by January 31, 2014 (or February 10, 2014, if you made deposits on time in full payment of the taxes due for the year). Tax amended Deposits. Tax amended   Generally, you must deposit both the employer and employee shares of social security and Medicare taxes and federal income tax withheld during the year. Tax amended However, you may make payments with Form 943 instead of depositing them if you accumulate less than a $2,500 tax liability (“Total taxes after adjustments” line on Form 943) during the year and you pay in full with a timely filed return. Tax amended   For more information on deposit rules, see Publication 51 (Circular A). Tax amended Electronic deposit requirement. Tax amended   You must use electronic funds transfer to make all federal tax deposits. Tax amended Generally, electronic funds transfers are made using EFTPS. Tax amended 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. Tax amended Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. Tax amended EFTPS is a free service provided by the Department of Treasury. Tax amended Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Tax amended   For more information on making federal tax deposits, see section 7 of Publication 51 (Circular A). Tax amended To get more information about EFTPS or to enroll in EFTPS, visit www. Tax amended eftps. Tax amended gov or call 1-800-555-4477 or 1-800-733-4829 (TDD). Tax amended Additional information about EFTPS is also available in Publication 966. Tax amended Form W-2. Tax amended   By January 31, you must furnish each employee a Form W-2 showing total wages for the previous year and total federal income tax, social security tax, and Medicare tax withheld. Tax amended However, if an employee stops working for you and requests the form earlier, you must give it to the employee within 30 days of the later of the following dates. Tax amended The date the employee requests the form. Tax amended The date you make your final payment of wages to the employee. Tax amended Compensation paid to H-2A visa holders. Tax amended   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. Tax amended 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 (line 6) on Form 943, and should not be reported as social security wages (box 3) or Medicare wages (box 5) on Form W-2. Tax amended   An employer is not required to withhold federal income tax from compensation it pays to an H-2A worker for agricultural labor performed in connection with this visa unless the worker asks for withholding and the employer agrees. Tax amended In this case, the worker must give the employer a completed Form W-4. Tax amended Federal income tax withheld should be reported on Form 943, line 8, and in box 2 of Form W-2. Tax amended   These reporting rules apply when the H-2A worker provides his or her taxpayer identification number (TIN) to the employer. Tax amended 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. Tax amended Trust fund recovery penalty. Tax amended   If you are responsible for withholding, accounting for, depositing, or paying federal withholding taxes and willfully fail to do so, you can be held liable for a penalty equal to the withheld tax not paid. Tax amended A responsible person can be an officer of a corporation, a partner, a sole proprietor, or an employee of any form of business. Tax amended A trustee or agent with authority over the funds of the business can also be held responsible for the penalty. Tax amended   Willfully means voluntarily, consciously, and intentionally. Tax amended Paying other expenses of the business instead of the taxes due is acting willfully. Tax amended Consequences of treating an employee as an independent contractor. Tax amended   If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that worker. Tax amended See Publication 15-A for more information. Tax amended Federal Unemployment (FUTA) Tax You must pay FUTA tax if you meet either of the following tests. Tax amended You paid cash wages of $20,000 or more to farmworkers in any calendar quarter during the current or preceding calendar year. Tax amended You employed 10 or more farmworkers for some part of at least 1 day during any 20 or more different calendar weeks during the current or preceding calendar year. Tax amended These rules do not apply to exempt services of your spouse, your parents, or your children under age 21. Tax amended See Family Employees , earlier. Tax amended Alien farmworkers. Tax amended   Wages paid to aliens admitted on a temporary basis to the United States to perform farmwork (also known as “H-2A visa workers”) are exempt from FUTA tax. Tax amended However, include your employment of these workers and the wages you paid them to determine whether you meet either of the above tests. Tax amended Commodity wages. Tax amended   Payments in kind for farm labor are not cash wages. Tax amended Do not count them to figure whether you are subject to FUTA tax or to figure how much tax you owe. Tax amended Tax rate and credit. Tax amended   The gross FUTA tax rate is 6. Tax amended 0% of the first $7,000 cash wages you pay to each employee during the year. Tax amended However, you are given a credit of up to 5. Tax amended 4% of the first $7,000 cash wages you pay to each employee for the state unemployment tax you pay. Tax amended If your state tax rate (experience rate) is less than 5. Tax amended 4%, you may still be allowed the full 5. Tax amended 4% credit. Tax amended   If you do not pay the state tax, you cannot take the credit. Tax amended If you are exempt from state unemployment tax for any reason, the full 6. Tax amended 0% rate applies. Tax amended See the Instructions for Form 940 for additional information. Tax amended More information. Tax amended   For more information on FUTA tax, see Publication 51 (Circular A). Tax amended Reporting and Paying FUTA Tax The FUTA tax is imposed on you as the employer. Tax amended It must not be collected or deducted from the wages of your employees. Tax amended Form 940. Tax amended   Report FUTA tax on Form 940. Tax amended The 2013 Form 940 is due January 31, 2014 (or February 10, 2014, if you timely deposited the full amount of your 2013 FUTA tax). Tax amended Deposits. Tax amended   If at the end of any calendar quarter you owe, but have not yet deposited, more than $500 in FUTA tax for the year, you must make a deposit by the end of the following month. Tax amended If the undeposited tax is $500 or less at the end of a quarter, you do not have to deposit it. Tax amended You can add it to the tax for the next quarter. Tax amended If the total undeposited tax is more than $500 at the end of the next quarter, a deposit will be required. Tax amended If the total undeposited tax at the end of the 4th quarter is $500 or less, you can either make a deposit or pay it with your return by the January 31, 2014, due date. Tax amended Electronic deposit requirement. Tax amended   You must use electronic funds transfer to make all federal tax deposits. Tax amended Generally, electronic funds transfers are made using EFTPS. Tax amended 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. Tax amended Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. Tax amended EFTPS is a free service provided by the Department of Treasury. Tax amended Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Tax amended   For more information on making federal tax deposits, see section 7 of Publication 51 (Circular A). Tax amended To get more information about EFTPS or to enroll in EFTPS, visit www. Tax amended eftps. Tax amended gov or call 1-800-555-4477 or 1-800-733-4829 (TDD). Tax amended Additional information about EFTPS is also available in Publication 966. Tax amended Prev  Up  Next   Home   More Online Publications
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Understanding your CP27 Notice

We've sent you this notice because our records indicate you may be eligible for the Earned Income Credit (EIC), but didn't claim it on your tax return.


What you need to do

  • Read your notice carefully — it will explain the steps needed to determine your qualifications.
  • Complete the Earned Income Credit Eligibility Worksheet.

    If you are eligible for the credit,
    • Sign and date the worksheet.
    • Mail the signed worksheet in the envelope provided.

    If you are not eligible for the credit,
    • Do not return the eligibility worksheet to us.

What we will do

We will review your worksheet and make a determination.

  • If you're eligible for the credit, we'll send you a refund check in 6 ― 8 weeks, as long as you don't owe tax or any other debts we're required to collect.
  • If we deny the credit, we will send you a letter of explanation.
  • If you don't hear from us after 8 weeks, call our toll free line at 1-800-829-0922 to check the status.

You may want to...


Answers to Common Questions

Why did the IRS send me this notice?
You may be eligible for the Earned Income Credit (EIC). The EIC is a credit for certain people who work and have earned income. People without dependent children may qualify for a refund up to $464, even if they do not owe any tax.

I lost the return envelope. Where do I mail my Earned Income Credit Eligibility Worksheet?
Mail the completed worksheet to the address listed on the top left corner of the worksheet. This office handles cases in your region, so it's important you send it there to avoid potential delays in processing.


Tips for next year

Claim the credit if you are still eligible.

Ask the IRS to figure the earned income credit for you by writing "EIC" on the EIC line, complete Schedule EIC, and attach it to your return. If you qualify for the credit, the IRS will calculate it for you.

Write "NO" on the EIC line if you do not want or you do not qualify for the credit.

Page Last Reviewed or Updated: 03-Mar-2014

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The Tax Amended

Tax amended Publication 925 - Introductory Material Table of Contents Future Developments Reminders IntroductionOrdering forms and publications. Tax amended Tax questions. Tax amended Useful Items - You may want to see: Future Developments For the latest developments related to Publication 925, such as legislation enacted after it was published, go to www. Tax amended irs. Tax amended gov/pub925. Tax amended Reminders At-risk amounts. Tax amended  The following rules apply to amounts borrowed after May 3, 2004. Tax amended You must file Form 6198, At-Risk Limitations, if you are engaged in an activity included in (6) under Activities Covered by the At-Risk Rules and you have borrowed certain amounts described in Certain borrowed amounts excluded under At-Risk Amounts in this publication. Tax amended You may be considered at risk for certain amounts described in Certain borrowed amounts excluded under At-Risk Amounts secured by real property used in the activity of holding real property (other than mineral property) that, if nonrecourse, would be qualified nonrecourse financing. Tax amended Photographs of missing children. Tax amended  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Tax amended Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Tax amended 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. Tax amended Introduction This publication discusses two sets of rules that may limit the amount of your deductible loss from a trade, business, rental, or other income-producing activity. Tax amended The first part of the publication discusses the passive activity rules. Tax amended The second part discusses the at-risk rules. Tax amended However, when you figure your allowable losses from any activity, you must apply the at-risk rules before the passive activity rules. Tax amended Comments and suggestions. Tax amended   We welcome your comments about this publication and your suggestions for future editions. Tax amended   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Tax amended NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Tax amended Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Tax amended   You can send your comments from www. Tax amended irs. Tax amended gov/formspubs/. Tax amended Click on “More Information” and then on “Comment on Tax Forms and Publications. Tax amended ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Tax amended Ordering forms and publications. Tax amended   Visit www. Tax amended irs. Tax amended gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Tax amended Internal Revenue Service 1201 N. Tax amended Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Tax amended   If you have a tax question, check the information available on IRS. Tax amended gov or call 1-800-829-1040. Tax amended We cannot answer tax questions sent to either of the above addresses. Tax amended Useful Items - You may want to see: Publication 527 Residential Rental Property (Including Rental of Vacation Homes) 541 Partnerships Form (and Instructions) 4952 Investment Interest Expense Deduction 6198 At-Risk Limitations 8582 Passive Activity Loss Limitations 8582-CR Passive Activity Credit Limitations 8810 Corporate Passive Activity Loss and Credit Limitations 8949 Sales and Other Dispositions of Capital Assets See How To Get Tax Help near the end of this publication for information about getting these publications and forms. Tax amended Prev  Up  Next   Home   More Online Publications