Department of the Treasury

Internal Revenue Service

Publication 15

Cat. No. 10000W

(Circular E), 

Employer's 

Tax Guide

For use in 2022

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Contents

What's New .............................. 1

Reminders ............................... 2

Calendar ................................. 9

Introduction ............................. 10

1. Employer Identification Number (EIN) ....... 11

2. Who Are Employees? .................... 12

3. Family Employees ...................... 13

4. Employee's Social Security Number (SSN) ... 14

5. Wages and Other Compensation ........... 15

6. Tips .................................. 19

7. Supplemental Wages .................... 20

8. Payroll Period .......................... 21

9. Withholding From Employees' Wages ....... 21

10. Required Notice to Employees About the 

Earned Income Credit (EIC) .............. 26

11. Depositing Taxes ...................... 27

12. Filing Form 941 or Form 944 .............. 32

13. Reporting Adjustments to Form 941 or 

Form 944 ............................ 35

14. Federal Unemployment (FUTA) Tax ........ 38

15. Special Rules for Various Types of 

Services and Payments ................. 40

16. Third-Party Payer Arrangements .......... 45

How To Get Tax Help ...................... 46

Index .................................. 49

Future Developments

For the latest information about developments related to 

Pub. 15, such as legislation enacted after it was 

published, go to IRS.gov/Pub15.

What's New

The COVID-19 related credit for qualified sick and 

family leave wages is limited to leave taken after 

March 31, 2020, and before October 1, 2021. Generally, the credit for qualified sick and family leave wages as 

enacted under the Families First Coronavirus Response 

Act (FFCRA) and amended and extended by the 

COVID-related Tax Relief Act of 2020 for leave taken after 

March 31, 2020, and before April 1, 2021, and the credit 

for qualified sick and family leave wages under sections 

Dec 16, 2021
3131, 3132, and 3133 of the Internal Revenue Code, as 

enacted under the American Rescue Plan Act of 2021 (the 

ARP), for leave taken after March 31, 2021, and before 

October 1, 2021, have expired. However, employers that 

pay qualified sick and family leave wages in 2022 for 

leave taken after March 31, 2020, and before October 1, 

2021, are eligible to claim a credit for qualified sick and 

family leave wages in 2022. See the March 2022 revision 

of the Instructions for Form 941 or the 2022 Instructions 

for Form 944 for more information.

The COVID-19 related employee retention credit has 

expired. The employee retention credit enacted under 

the Coronavirus Aid, Relief, and Economic Security 

(CARES) Act and amended and extended by the Taxpayer Certainty and Disaster Tax Relief Act of 2020 was 

limited to qualified wages paid after March 12, 2020, and 

before July 1, 2021. The employee retention credit under 

section 3134 of the Internal Revenue Code, as enacted by 

the ARP and amended by the Infrastructure Investment 

and Jobs Act, was limited to wages paid after June 30, 

2021, and before October 1, 2021, unless the employer 

was a recovery startup business. An employer that was a 

recovery startup business could also claim the employee 

retention credit for wages paid after September 30, 2021, 

and before January 1, 2022.

Credit for COBRA premium assistance payments is 

limited to periods of coverage beginning on or after 

April 1, 2021, through periods of coverage beginning 

on or before September 30, 2021. Section 9501 of the 

ARP provides for COBRA premium assistance in the form 

of a full reduction in the premium otherwise payable by 

certain individuals and their families who elect COBRA 

continuation coverage due to a loss of coverage as the result of a reduction in hours or an involuntary termination of 

employment (assistance eligible individuals). This COBRA premium assistance is available for periods of coverage beginning on or after April 1, 2021, through periods of 

coverage beginning on or before September 30, 2021. A 

premium payee is entitled to the COBRA premium assistance credit at the time an eligible individual elects coverage. Therefore, due to the COBRA notice and election period requirements (generally, employers have 60 days to 

provide notice and assistance eligible individuals have 60 

days to elect coverage), some employers may be eligible 

to claim the COBRA premium assistance credit on employment tax returns for the first quarter of 2022. See the 

March 2022 revision of the Instructions for Form 941 or 

the 2022 Instructions for Form 944 for more information.

Social security and Medicare tax for 2022. The rate of 

social security tax on taxable wages, including qualified 

sick leave wages and qualified family leave wages paid in 

2022 for leave taken after March 31, 2021, and before October 1, 2021, is 6.2% each for the employer and employee or 12.4% for both. Qualified sick leave wages and 

qualified family leave wages paid in 2022 for leave taken 

after March 31, 2020, and before April 1, 2021, aren't subject to the employer share of social security tax; therefore, 

the tax rate on these wages is 6.2%. The social security 

wage base limit is $147,000.

The Medicare tax rate is 1.45% each for the employee 

and employer, unchanged from 2021. There is no wage 

base limit for Medicare tax.

Social security and Medicare taxes apply to the wages 

of household workers you pay $2,400 or more in cash wages in 2022. Social security and Medicare taxes apply to 

election workers who are paid $2,000 or more in cash or 

an equivalent form of compensation in 2022.

Reminders

Paying the deferred amount of the employer share of 

social security tax. The CARES Act allowed employers 

to defer the deposit and payment of the employer share of 

social security tax. The deferred amount of the employer 

share of social security tax was only available for deposits 

due on or after March 27, 2020, and before January 1, 

2021, as well as deposits and payments due after January 

1, 2021, that were required for wages paid on or after 

March 27, 2020, and before January 1, 2021. One-half of 

the employer share of social security tax is due by December 31, 2021, and the remainder is due by December 

31, 2022. Because both December 31, 2021, and December 31, 2022, are nonbusiness days, payments made on 

the next business day will be considered timely. Any payments or deposits you make before December 31, 2021, 

are first applied against your payment due on December 

31, 2021, and then applied against your payment due on 

December 31, 2022. For more information, go to IRS.gov/

ETD. Also see the Instructions for Form 941 or the Instructions for Form 944 for more information, including how to 

pay the deferred amount.

Paying the deferred amount of the employee share of 

social security tax. The Presidential Memorandum on 

Deferring Payroll Tax Obligations in Light of the Ongoing 

COVID-19 Disaster, issued on August 8, 2020, directed 

the Secretary of the Treasury to defer the withholding, deposit, and payment of the employee share of social security tax on wages paid during the period from September 1, 

2020, through December 31, 2020. The deferral of the 

withholding and payment of the employee share of social 

security tax was available for employees whose social security wages paid for a biweekly pay period were less than 

$4,000, or the equivalent threshold amount for other pay 

periods. The employer was required to withhold and pay 

the total deferred employee share of social security tax 

ratably from wages paid to the employee between January 1, 2021, and December 31, 2021. If necessary, the 

employer could have made arrangements to otherwise 

collect the total deferred taxes from the employee. The 

employer is liable to pay the deferred taxes to the IRS and 

must do so before January 1, 2022, to avoid interest, penalties, and additions to tax on those amounts. Because 

January 1, 2022, is a nonbusiness day, payments made 

on January 3, 2022, will be considered timely. For more 

information about the deferral of employee social security 

tax, see Notice 2020-65, 2020-38 I.R.B. 567, available at 

IRS.gov/irb/2020-38_IRB#NOT-2020-65, and Notice 

2021-11, 2021-06 I.R.B. 827, available at IRS.gov/irb/

2021-06_IRB#NOT-2021-11. Also see the Instructions for 

Page 2 Publication 15 (2022)
Form 941 or the Instructions for Form 944 for more information, including how to pay the deferred amount.

Disaster tax relief. Disaster tax relief is available for 

those impacted by disasters. For more information about 

disaster relief, go to IRS.gov/DisasterTaxRelief.

Payroll tax credit for certain tax-exempt organizations affected by qualified disasters. Section 303(d) of 

the Taxpayer Certainty and Disaster Tax Relief Act of 

2020 allows for a payroll tax credit for certain tax-exempt 

organizations affected by certain qualified disasters not 

related to COVID-19. This credit will be claimed on Form 

5884-D (not on Form 941 and Form 944). Form 5884-D is 

filed after the Form 941 and Form 944 for the year for 

which the credit is being claimed has been filed. For more 

information about this credit, go to IRS.gov/Form5884D.

2022 withholding tables. The Percentage Method and 

Wage Bracket Method withholding tables, the employer 

instructions on how to figure employee withholding, and 

the amount to add to a nonresident alien employee's wages for figuring income tax withholding are included in 

Pub. 15-T, Federal Income Tax Withholding Methods, 

available at IRS.gov/Pub15T. You may also use the Income Tax Withholding Assistant for Employers at 

IRS.gov/ITWA to help you figure federal income tax withholding.

Moving expense reimbursement. P.L. 115-97 suspends the exclusion for qualified moving expense reimbursements from your employee's income for tax years 

beginning after 2017 and before 2026. However, the exclusion is still available in the case of a member of the 

U.S. Armed Forces on active duty who moves because of 

a permanent change of station due to a military order. The 

exclusion applies only to reimbursement of moving expenses that the member could deduct if he or she had paid or 

incurred them without reimbursement. See Moving Expenses in Pub. 3, Armed Forces' Tax Guide, for the definition of what constitutes a permanent change of station 

and to learn which moving expenses are deductible.

Withholding on supplemental wages. P.L. 115-97 

lowered the withholding rates on supplemental wages for 

tax years beginning after 2017 and before 2026. See section 7 for the withholding rates.

Backup withholding. P.L. 115-97 lowered the backup 

withholding rate to 24% for tax years beginning after 2017 

and before 2026. For more information on backup withholding, see Backup withholding, later.

Qualified small business payroll tax credit for increasing research activities. For tax years beginning 

after 2015, a qualified small business may elect to claim 

up to $250,000 of its credit for increasing research activities as a payroll tax credit against the employer share of 

social security tax. The payroll tax credit election must be 

made on or before the due date of the originally filed income tax return (including extensions). The portion of the 

credit used against the employer share of social security 

tax is allowed in the first calendar quarter beginning after 

the date that the qualified small business filed its income 

tax return. The election and determination of the credit 

amount that will be used against the employer share of 

social security tax are made on Form 6765, Credit for Increasing Research Activities. The amount from Form 

6765, line 44, must then be reported on Form 8974, Qualified Small Business Payroll Tax Credit for Increasing Research Activities. Form 8974 is used to determine the 

amount of the credit that can be used in the current quarter. The amount from Form 8974, line 12, is reported on 

Form 941 or Form 944. For more information about the 

payroll tax credit, see Notice 2017-23, 2017-16 I.R.B. 

1100, available at IRS.gov/irb/

2017-16_IRB#NOT-2017-23, and IRS.gov/

ResearchPayrollTC. Also see the line 16 instructions in 

the Instructions for Form 941 (line 13 instructions in the Instructions for Form 944).

Certification program for professional employer organizations (PEOs). The Stephen Beck, Jr., Achieving a 

Better Life Experience Act of 2014 required the IRS to establish a voluntary certification program for PEOs. PEOs 

handle various payroll administration and tax reporting responsibilities for their business clients and are typically 

paid a fee based on payroll costs. To become and remain 

certified under the certification program, certified professional employer organizations (CPEOs) must meet various requirements described in sections 3511 and 7705 

and related published guidance. Certification as a CPEO 

may affect the employment tax liabilities of both the CPEO 

and its customers. A CPEO is generally treated for employment tax purposes as the employer of any individual 

who performs services for a customer of the CPEO and is 

covered by a contract described in section 7705(e)(2) between the CPEO and the customer (CPEO contract), but 

only for wages and other compensation paid to the individual by the CPEO. To become a CPEO, the organization 

must apply through the IRS Online Registration System. 

For more information or to apply to become a CPEO, go to 

IRS.gov/CPEO. Also see Revenue Procedure 2017-14, 

2017-3 I.R.B. 426, available at IRS.gov/irb/

2017-03_IRB#RP-2017-14.

Outsourcing payroll duties. Generally, as an employer, 

you’re responsible to ensure that tax returns are filed and 

deposits and payments are made, even if you contract 

with a third party to perform these acts. You remain responsible if the third party fails to perform any required action. Before 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, go to IRS.gov/

OutsourcingPayrollDuties for helpful information on this 

topic. If a CPEO pays wages and other compensation to 

an individual performing services for you, and the services 

are covered by a contract described in section 7705(e)(2) 

between you and the CPEO (CPEO contract), then the 

CPEO is generally treated as the employer, but only for 

wages and other compensation paid to the individual by 

the CPEO. However, with respect to certain employees 

covered by a CPEO contract, you may also be treated as 

an employer of the employees and, consequently, may 

also be liable for federal employment taxes imposed on 

wages and other compensation paid by the CPEO to such 

Publication 15 (2022) Page 3
employees. For more information on the different types of 

third-party payer arrangements, see section 16.

Aggregate Form 941 filers. Approved section 3504 

agents and CPEOs must complete Schedule R (Form 

941), Allocation Schedule for Aggregate Form 941 Filers, 

when filing an aggregate Form 941. Aggregate Forms 941 

are filed by agents approved by the IRS under section 

3504 of the Internal Revenue Code. To request approval 

to act as an agent for an employer, the agent files Form 

2678 with the IRS unless you're a state or local government agency acting as an agent under the special procedures provided in Revenue Procedure 2013-39, 2013-52 

I.R.B. 830, available at IRS.gov/irb/

2013-52_IRB#RP-2013-39. Aggregate Forms 941 are 

also filed by CPEOs approved by the IRS under section 

7705. To become a CPEO, the organization must apply 

through the IRS Online Registration System at IRS.gov/

CPEO. CPEOs file Form 8973, Certified Professional Employer Organization/Customer Reporting Agreement, to 

notify the IRS that they’ve started or ended a service contract with a client or customer. CPEOs must generally file 

Form 941 and Schedule R (Form 941) electronically. For 

more information about a CPEO's requirement to file electronically, see Revenue Procedure 2017-14, 2017-3 I.R.B. 

426, available at IRS.gov/irb/2017-03_IRB#RP-2017-14.

Other third-party payers that file aggregate Forms 941, 

such as non-certified PEOs, must complete and file 

Schedule R (Form 941) if they have clients that are claiming any employment tax credit (for example, the qualified 

small business payroll tax credit for increasing research 

activities).

Aggregate Form 940 filers. Approved section 3504 

agents and CPEOs must complete Schedule R (Form 

940), Allocation Schedule for Aggregate Form 940 Filers, 

when filing an aggregate Form 940, Employer's Annual 

Federal Unemployment (FUTA) Tax Return. Aggregate 

Forms 940 can be filed by agents acting on behalf of 

home care service recipients who receive home care 

services through a program administered by a federal, 

state, or local government. To request approval to act as 

an agent on behalf of home care service recipients, the 

agent files Form 2678 with the IRS unless you're a state or 

local government agency acting as an agent under the 

special procedures provided in Revenue Procedure 

2013-39. Aggregate Forms 940 are also filed by CPEOs 

approved by the IRS under section 7705. CPEOs file 

Form 8973 to notify the IRS that they’ve started or ended 

a service contract with a client or customer. CPEOs must 

generally file Form 940 and Schedule R (Form 940) electronically. For more information about a CPEO's requirement to file electronically, see Revenue Procedure 

2017-14.

Work opportunity tax credit for qualified tax-exempt 

organizations hiring qualified veterans. Qualified 

tax-exempt organizations that hire eligible unemployed 

veterans may be able to claim the work opportunity tax 

credit against their payroll tax liability using Form 5884-C. 

For more information, go to IRS.gov/WOTC.

Medicaid waiver payments. Notice 2014-7 provides 

that certain Medicaid waiver payments are excludable 

from income for federal income tax purposes. See Notice 

2014-7, 2014-4 I.R.B. 445, available at IRS.gov/irb/

2014-04_IRB#NOT-2014-7. For more information, including questions and answers related to Notice 2014-7, go to 

IRS.gov/MedicaidWaiverPayments.

No federal income tax withholding on disability payments for injuries incurred as a direct result of a terrorist attack directed against the United States. Disability payments for injuries incurred as a direct result of a 

terrorist attack directed against the United States (or its allies) aren't included in income. Because federal income 

tax withholding is only required when a payment is includible in income, no federal income tax should be withheld 

from these payments. See Pub. 907, Tax Highlights for 

Persons With Disabilities.

Voluntary withholding on dividends and other distributions by an Alaska Native Corporation (ANC). A 

shareholder of an ANC may request voluntary income tax 

withholding on dividends and other distributions paid by 

an ANC. A shareholder may request voluntary withholding 

by giving the ANC a completed Form W-4V. For more information, see Notice 2013-77, 2013-50 I.R.B. 632, available at IRS.gov/irb/2013-50_IRB#NOT-2013-77.

Definition of marriage. A marriage of two individuals is 

recognized for federal tax purposes if the marriage is recognized by the state, possession, or territory of the United 

States in which the marriage is entered into, regardless of 

legal residence. Two individuals who enter into a relationship that is denominated as marriage under the laws of a 

foreign jurisdiction are recognized as married for federal 

tax purposes if the relationship would be recognized as 

marriage under the laws of at least one state, possession, 

or territory of the United States, regardless of legal residence. Individuals who have entered into a registered domestic partnership, civil union, or other similar relationship 

that isn't denominated as a marriage under the law of the 

state, possession, or territory of the United States where 

such relationship was entered into aren't lawfully married 

for federal tax purposes, regardless of legal residence.

Severance payments. Severance payments are wages 

subject to social security and Medicare taxes, income tax 

withholding, and FUTA tax.

You must receive written notice from the IRS to file 

Form 944. If you’ve been filing Forms 941 (or Forms 

941-SS, Employer's QUARTERLY Federal Tax Return—American Samoa, Guam, the Commonwealth of the 

Northern Mariana Islands, and the U.S. Virgin Islands; or 

Formularios 941-PR, Planilla para la Declaración Federal 

TRIMESTRAL del Patrono), and believe your employment 

taxes for the calendar year will be $1,000 or less, and you 

would like to file Form 944 instead of Forms 941, you must 

contact the IRS during the first calendar quarter of the tax 

year to request to file Form 944. You must receive written 

notice from the IRS to file Form 944 instead of Forms 941 

before you may file this form. For more information on requesting to file Form 944, including the methods and 

deadlines for making a request, see the Instructions for 

Form 944.

Employers can request to file Forms 941 instead of 

Form 944. If you received notice from the IRS to file 

Page 4 Publication 15 (2022)
Form 944 but would like to file Forms 941 instead, you 

must contact the IRS during the first calendar quarter of 

the tax year to request to file Forms 941. You must receive 

written notice from the IRS to file Forms 941 instead of 

Form 944 before you may file these forms. For more information on requesting to file Forms 941, including the 

methods and deadlines for making a request, see the Instructions for Form 944.

Correcting Form 941 or 944. If you discover an error on 

a previously filed Form 941, make the correction using 

Form 941-X. If you discover an error on a previously filed 

Form 944, make the correction using Form 944-X. Forms 

941-X and 944-X are filed separately from Forms 941 and 

944. Forms 941-X and 944-X are used by employers to 

claim refunds or abatements of employment taxes, rather 

than Form 843. See section 13 for more information.

Zero wage return. If you haven't filed a “final” Form 940 

and "final" Form 941 or 944, or aren't a “seasonal” employer (Form 941 only), you must continue to file a Form 

940 and Form 941 or 944, even for periods during which 

you paid no wages. The IRS encourages you to file your 

“zero wage” Form 940 and Form 941 or 944 electronically. 

Go to IRS.gov/EmploymentEfile for more information on 

electronic filing.

Federal tax deposits must be made by electronic 

funds transfer (EFT). You must use EFT to make all 

federal tax deposits. Generally, an EFT is made using the 

Electronic Federal Tax Payment System (EFTPS). If you 

don't 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. Also, you may arrange for your financial institution to 

initiate a same-day wire payment on your behalf. EFTPS 

is a free service provided by the Department of the Treasury. Services provided by your tax professional, financial 

institution, payroll service, or other third party may have a 

fee.

For more information on making federal tax deposits, 

see How To Deposit in section 11. To get more information about EFTPS or to enroll in EFTPS, go to EFTPS.gov, 

or call 800-555-4477 or 800-733-4829 (TDD). Additional 

information about EFTPS is also available in Pub. 966.

Pub. 5146 explains employment tax examinations 

and appeal rights. Pub. 5146 provides employers with 

information on how the IRS selects employment tax returns to be examined, what happens during an exam, and 

what options an employer has in responding to the results 

of an exam, including how to appeal the results. Pub. 

5146 also includes information on worker classification issues and tip exams.

Electronic Filing and Payment

Businesses can enjoy the benefits of filing and paying 

their federal taxes electronically. Whether you rely on a 

tax professional or handle your own taxes, the IRS offers 

you convenient programs to make filing and payment 

easier.

Spend less time worrying about taxes and more time 

running your business. Use e-file and EFTPS to your 

benefit.

• For e-file, go to IRS.gov/EmploymentEfile for 

additional information. A fee may be charged to file 

electronically.

• For EFTPS, go to EFTPS.gov, or call EFTPS 

Customer Service at 800-555-4477 or 800-733-4829 

(TDD).

• For electronic filing of Forms W-2, Wage and Tax 

Statement, go to SSA.gov/employer. You may be 

required to file Forms W-2 electronically. For details, 

see the General Instructions for Forms W-2 and W-3.

If you’re filing your tax return or paying your federal taxes electronically, a valid EIN is required at 

the time the return is filed or the payment is made. 

If a valid EIN isn't provided, the return or payment won't be 

processed. This may result in penalties. See section 1 for 

information about applying for an EIN.

Electronic funds withdrawal (EFW). If you file your employment tax return electronically, you can e-file and use 

EFW to pay the balance due in a single step using tax 

preparation software or through a tax professional. However, don't use EFW to make federal tax deposits. For 

more information on paying your taxes using EFW, go to 

IRS.gov/EFW.

Credit or debit card payments. You can pay the balance due shown on your employment tax return by credit 

or debit card. Your payment will be processed by a payment processor who will charge a processing fee. Don't 

use a credit or debit card to make federal tax deposits. For 

more information on paying your taxes with a credit or 

debit card, go to IRS.gov/PayByCard.

Online payment agreement. You may be eligible to apply for an installment agreement online if you can’t pay the 

full amount of tax you owe when you file your employment 

tax return. For more information, see the instructions for 

your employment tax return or go to IRS.gov/OPA.

Forms in Spanish

You can provide Formulario W-4(SP), Certificado de 

Retenciones del Empleado, in place of Form W-4, 

Employee's Withholding Certificate, to your 

Spanish-speaking employees. For more information, see 

Pub. 17(SP), El Impuesto Federal sobre los Ingresos 

(Para Personas Físicas). For nonemployees, such as 

independent contractors, 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.

CAUTION

!

Publication 15 (2022) Page 5
Hiring New Employees

Eligibility for employment. You must verify that each 

new employee is legally eligible to work in the United 

States. This includes completing the U.S. Citizenship and 

Immigration Services (USCIS) Form I-9, Employment Eligibility Verification. You can get Form I-9 at USCIS.gov/

Forms. For more information, visit the USCIS website at 

USCIS.gov/I-9-Central or call 800-375-5283 or 

800-767-1833 (TTY).

You may use the Social Security Number Verification 

Service (SSNVS) at SSA.gov/employer/ssnv.htm to verify 

that an employee name matches an SSN. A person may 

have a valid SSN but not be authorized to work in the United States. You may use E-Verify at e-verify.gov to confirm the employment eligibility of newly hired employees.

New hire reporting. You’re required to report any new 

employee to a designated state new hire registry. A new 

employee is an employee who hasn't 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.

Many states accept a copy of Form W-4 with employer 

information added. Visit the Office of Child Support Enforcement website at acf.hhs.gov/programs/css/

employers for more information.

W-4 request. Ask each new employee to complete the 

2022 Form W-4. See section 9.

Name and social security number (SSN). Record 

each new employee's name and SSN from his or her social security card. Any employee without a social security 

card should apply for one. See section 4.

Information Returns

You must file Forms W-2 to report wages paid to 

employees. You may also be required to file information 

returns to report certain types of payments made during 

the year. For example, you must file Form 1099-NEC, 

Nonemployee Compensation, 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. 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 you file (for 

example, the Instructions for Forms 1099-MISC and 

1099-NEC). Generally, don't use Forms 1099 to report 

wages and other compensation you paid to employees; 

report these on Form W-2. See the General Instructions 

for Forms W-2 and W-3 for details about filing Form W-2 

and for information about required electronic filing.

Information reporting customer service site. The IRS 

operates an information return customer service site to 

answer questions about reporting on Forms W-2, W-3, 

1099, and other information returns. If you have questions 

related to reporting on information returns, call 

866-455-7438 (toll free), 304-263-8700 (toll call), or 

304-579-4827 (TDD/TTY for persons who are deaf, hard 

of hearing, or have a speech disability). The center can 

also be reached by email at mccirp@irs.gov. Don't include 

tax identification numbers (TINs) or attachments in email 

correspondence because electronic mail isn't secure.

Federal Income Tax 

Withholding

Withhold federal income tax from each wage payment or 

supplemental unemployment compensation plan benefit 

payment according to the employee's Form W-4 and the 

correct withholding table in Pub. 15-T. If you're paying 

supplemental wages to an employee, see section 7. If you 

have nonresident alien employees, see Withholding 

income taxes on the wages of nonresident alien 

employees in section 9.

See section 8 of Pub. 15-A, Employer’s Supplemental 

Tax Guide, for information about withholding on pensions 

(including distributions from tax-favored retirement plans), 

annuities, and individual retirement arrangements (IRAs).

Nonpayroll Income Tax 

Withholding

Nonpayroll federal income tax withholding (reported on 

Forms 1099 and Form W-2G, Certain Gambling 

Winnings) must be reported on Form 945, Annual Return 

of Withheld Federal Income Tax. Separate deposits are 

required for payroll (Form 941 or Form 944) and 

nonpayroll (Form 945) withholding. Nonpayroll items 

include the following.

• Pensions (including distributions from tax-favored 

retirement plans, for example, section 401(k), section 

403(b), and governmental section 457(b) plans), 

annuities, and IRA distributions.

• Military retirement.

• Gambling winnings.

• Indian gaming profits.

• Certain government payments on which the recipient 

elected voluntary income tax withholding.

• Dividends and other distributions by an ANC on which 

the recipient elected voluntary income tax withholding.

• Payments subject to backup withholding.

For details on depositing and reporting nonpayroll 

income tax withholding, see the Instructions for Form 945.

Distributions from nonqualified pension plans and 

deferred compensation plans. Because distributions to 

participants from some nonqualified pension plans and 

deferred compensation plans (including section 457(b) 

plans of tax-exempt organizations) are treated as wages 

and are reported on Form W-2, income tax withheld must 

be reported on Form 941 or Form 944, not on Form 945. 

Page 6 Publication 15 (2022)
However, distributions from such plans to a beneficiary or 

estate of a deceased employee aren't wages and are reported on Forms 1099-R, Distributions From Pensions, 

Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.; income tax withheld must be reported on Form 945.

Backup withholding. You must generally withhold 24% 

of certain taxable payments if the payee fails to furnish 

you with his or her correct taxpayer identification number 

(TIN). This withholding is referred to as “backup withholding.”

Payments subject to backup withholding include interest, dividends, patronage dividends, rents, royalties, commissions, nonemployee compensation, payments made in 

settlement of payment card or third-party network transactions, and certain other payments you make in the course 

of your trade or business. In addition, transactions by 

brokers and barter exchanges and certain payments 

made by fishing boat operators are subject to backup 

withholding.

Backup withholding doesn't apply to wages, pensions, annuities, IRAs (including simplified employee pension (SEP) and SIMPLE retirement 

plans), section 404(k) distributions from an employee 

stock ownership plan (ESOP), medical savings accounts 

(MSAs), health savings accounts (HSAs), long-term-care 

benefits, or real estate transactions.

You can use Form W-9 or Formulario W-9(SP) to request payees to furnish a TIN. Form W-9 or Formulario 

CAUTION

!

W-9(SP) must be used when payees must certify that the 

number furnished is correct, or when payees must certify 

that they’re not subject to backup withholding or are exempt from backup withholding. The Instructions for the 

Requester of Form W-9 or Formulario W-9(SP) includes a 

list of types of payees who are exempt from backup withholding. For more information, see Pub. 1281, Backup 

Withholding for Missing and Incorrect Name/TIN(s).

Recordkeeping

Keep all records of employment taxes for at least 4 years. 

These should be available for IRS review. Your records 

should include the following information.

• Your EIN.

• Amounts and dates of all wage, annuity, and pension 

payments.

• Amounts of tips reported to you by your employees.

• Records of allocated tips.

• The fair market value of in-kind wages paid.

• Names, addresses, SSNs, and occupations of 

employees and recipients.

• Any employee copies of Forms W-2 and W-2c 

returned to you as undeliverable.

• Dates of employment for each employee.

Employer Responsibilities

Employer Responsibilities: The following list provides a brief summary of your basic responsibilities. Because the individual 

circumstances for each employer can vary greatly, responsibilities for withholding, depositing, and reporting employment taxes can 

differ. Each item in this list has a page reference to a more detailed discussion in this publication.

New Employees: Page Annually (see Calendar for due dates): Page

Verify work eligibility of new employees ....... 5 File Form 944 if required (pay tax with return if

Record employees' names and SSNs from not required to deposit) ..................... 33

social security cards .................... 6 Remind employees to submit a new Form W-4

Ask employees for Form W-4 .............. 6 if they need to change their withholding .......... 22

Each Payday: Ask for a new Form W-4 from employees

Withhold federal income tax based on each claiming exemption from income tax

employee's Form W-4 ................... 22 withholding .............................. 23

Withhold employee's share of social security Reconcile Forms 941 (or Form 944) with Forms

and Medicare taxes .................... 25 W-2 and W-3 ............................ 35

Deposit: Furnish each employee a Form W-2 ............ 10

• Withheld income tax File Copy A of Forms W-2 and the transmittal

• Withheld and employer social security taxes Form W-3 with the SSA ..................... 10

• Withheld and employer Medicare taxes ..... 27 Furnish each other payee a Form 1099 (for example, 

Note: Due date of deposit generally depends Form 1099-NEC) ......................... 10

on your deposit schedule (monthly or File Forms 1099 and the transmittal Form

semiweekly). 1096 .................................. 10

Quarterly (By April 30, July 31, October 31, File Form 940 ............................ 10

and January 31): File Form 945 for any nonpayroll income tax

Deposit FUTA tax if undeposited amount withholding .............................. 10

is over $500 .......................... 39

File Form 941 (pay tax with return if not

required to deposit) ..................... 33

Publication 15 (2022) Page 7
• 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.

• Copies of employees' and recipients' income tax 

withholding certificates (Forms W-4, W-4P, W-4(SP), 

W-4S, and W-4V).

• Dates and amounts of tax deposits you made and 

acknowledgment numbers for deposits made by 

EFTPS.

• Copies of returns filed and confirmation numbers.

• Records of fringe benefits and expense 

reimbursements provided to your employees, 

including substantiation.

• Documentation to substantiate any credits claimed. 

Records related to qualified sick leave wages and 

qualified family leave wages for leave taken after 

March 31, 2021, and records related to qualified 

wages for the employee retention credit paid after 

June 30, 2021, should be kept for at least 6 years. For 

more information on substantiation requirements, go 

to IRS.gov/PLC and IRS.gov/ERC.

• Documentation to substantiate the amount of any 

employer or employee share of social security tax that 

you deferred and paid for 2020.

Change of Business Name

Notify the IRS immediately if you change your business 

name. Write to the IRS office where you file your returns, 

using the Without a payment address provided in the 

instructions for your employment tax return, to notify the 

IRS of any business name change. See Pub. 1635 to see 

if you need to apply for a new EIN.

Change of Business Address 

or Responsible Party

Notify the IRS immediately if you change your business 

address or responsible party. Complete and mail Form 

8822-B to notify the IRS of a business address or 

responsible party change. For a definition of “responsible 

party,” see the Instructions for Form SS-4.

Filing Addresses

Generally, your filing address for Form 940, 941, 943, 

944, 945, or CT-1 depends on the location of your 

residence or principal place of business and whether or 

not you’re including a payment with your return. There are 

separate filing addresses for these returns if you’re a 

tax-exempt organization or government entity. See the 

separate instructions for Form 940, 941, 943, 944, 945, or 

CT-1 for the filing addresses.

Private Delivery Services

You can use certain private delivery services (PDSs) 

designated by the IRS to meet the “timely mailing as 

timely filing” rule for tax returns. Go to IRS.gov/PDS for the 

current list of PDSs.

The PDS can tell you how to get written proof of the 

mailing date.

For the IRS mailing address to use if you're using a 

PDS, go to IRS.gov/PDSstreetAddresses. Select the 

mailing address listed on the webpage that is in the same 

state as the address to which you would mail returns filed 

without a payment, as shown in the instructions for your 

employment tax return.

PDSs can't deliver items to P.O. boxes. You must 

use the U.S. Postal Service to mail any item to an 

IRS P.O. box address.

Dishonored Payments

Any form of payment that is dishonored and returned from 

a financial institution is subject to a penalty. The penalty is 

$25 or 2% of the payment, whichever is more. However, 

the penalty on dishonored payments of $24.99 or less is 

an amount equal to the payment. For example, a 

dishonored payment of $18 is charged a penalty of $18.

E-News for Payroll 

Professionals

The IRS has a subscription-based email service for 

payroll professionals. Subscribers will receive periodic 

updates from the IRS. The updates may include 

information regarding recent legislative changes affecting 

federal payroll reporting, IRS news releases and special 

announcements pertaining to the payroll industry, new 

employment tax procedures, and other information 

specifically affecting federal payroll tax returns. To 

subscribe, go to IRS.gov/ENewsPayroll.

Telephone Help

Tax questions. You can call the IRS Business and Specialty Tax Line with your employment tax questions at 

800-829-4933.

Help for people with disabilities. You may call 

800-829-4059 (TDD/TTY for persons who are deaf, hard 

of hearing, or have a speech disability) with any employment tax questions. You may also use this number for assistance with unresolved tax problems.

Additional information. Go to IRS.gov/

EmploymentTaxes for additional employment tax information. For information about employer responsibilities under 

the Affordable Care Act, go to IRS.gov/ACA. For 

CAUTION

!

Page 8 Publication 15 (2022)
information about COVID-19 tax relief, go to IRS.gov/

Coronavirus.

Ordering Employer Tax Forms, 

Instructions, and Publications

You can view, download, or print most of the forms, 

instructions, and publications you may need at IRS.gov/

Forms. Otherwise, you can go to IRS.gov/OrderForms to 

place an order and have them mailed to you. The IRS will 

process your order as soon as possible. Don't resubmit 

requests you've already sent us. You can get forms, 

instructions, and publications faster online.

Instead of ordering paper Forms W-2 and W-3, 

consider filing them electronically using the SSA's free 

e-file service. Visit the SSA's Employer W-2 Filing 

Instructions & Information webpage at SSA.gov/employer 

to register for Business Services Online. You’ll be able to 

create Forms W-2 online and submit them to the SSA by 

typing your wage information into easy-to-use fill-in fields. 

In addition, you can print out completed copies of Forms 

W-2 to file with state or local governments, distribute to 

your employees, and keep for your records. Form W-3 will 

be created for you based on your Forms W-2.

Photographs of Missing 

Children

The IRS is a proud partner with the National Center for 

Missing & Exploited Children® (NCMEC). Photographs of 

missing children selected by the Center may appear in 

this publication on pages that would otherwise be blank. 

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.

Calendar

The following is a list of important dates and 

responsibilities. The dates listed here haven’t been 

adjusted for Saturdays, Sundays, and legal holidays (see 

the TIP next). Pub. 509, Tax Calendars (for use in 2022), 

adjusts the dates for Saturdays, Sundays, and legal 

holidays. See section 11 for information about depositing 

taxes reported on Forms 941, 944, and 945. See section 

14 for information about depositing FUTA tax. Due dates 

for forms required for health coverage reporting aren't 

listed here. For these dates, see Pub. 509.

If any date shown next 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. The term "legal holiday" means any legal 

holiday in the District of Columbia. A statewide legal holiday delays a filing due date only if the IRS office where 

you’re required to file is located in that state. However, a 

TIP

statewide legal holiday doesn't delay the due date of federal tax deposits. See Deposits Due on Business Days 

Only in section 11. For any filing due date, you’ll 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.S. Postal Service on or before the due date, or sent by an IRS-designated PDS on or before the due date. See Private Delivery 

Services under Reminders, earlier, for more information.

Fiscal year taxpayers. The due dates listed next apply 

whether you use a calendar or a fiscal year.

By January 31

File Form 941 or Form 944. File Form 941 for the 

fourth quarter of the previous calendar year and deposit 

any undeposited income, social security, and Medicare 

taxes. You may pay these taxes with Form 941 if your 

total tax liability for the quarter (Form 941, line 12) is less 

than $2,500. File Form 944 for the previous calendar 

year instead of Form 941 if the IRS has notified you in 

writing to file Form 944. Pay any undeposited income, 

social security, and Medicare taxes with your Form 944. 

You may pay these taxes with Form 944 if your total tax 

liability for the year (Form 944, line 9) is less than 

$2,500. For additional rules on when you can pay your 

taxes with your return, see Payment with return in section 11. If you timely deposited all taxes when due, you 

may file by February 10.

File Form 940. File Form 940 to report any FUTA tax. 

However, if you deposited all of the FUTA tax when due, 

you may file by February 10. See section 14 for more information on FUTA tax.

Furnish Forms 1099 and W-2. Furnish each employee a completed 2021 Form W-2. Furnish a 2021 

Form 1099-NEC to payees for nonemployee compensation. Most Forms 1099 must be furnished to payees by 

January 31, but some can be furnished by February 15. 

For more information, see the Guide to Information Returns chart in the General Instructions for Certain Information Returns.

File Form W-2. File with the SSA Copy A of all 2021 

paper and electronic Forms W-2 with Form W-3, Transmittal of Wage and Tax Statements. 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 SSA.gov/

employer. If filing electronically, via the SSA's Form W-2 

Online service, the SSA will generate Form W-3 data 

from the electronic submission of Form(s) W-2.

File Form 1099-NEC reporting nonemployee compensation. File with the IRS Copy A of all 2021 paper 

and electronic Forms 1099-NEC with Form 1096, Annual Summary and Transmittal of U.S. Information Returns. For information on filing information returns electronically with the IRS, see Pub. 1220, Specifications for 

Electronic Filing of Forms 1097, 1098, 1099, 3921, 

3922, 5498, and W-2G.

Publication 15 (2022) Page 9
File Form 945. File Form 945 to report any nonpayroll 

federal income tax withheld. If you deposited all taxes 

when due, you may file by February 10. See Nonpayroll 

Income Tax Withholding under Reminders, earlier, for 

more information.

By February 15

Request a new Form W-4 from exempt employees.

Ask for a new Form W-4 from each employee who 

claimed exemption from income tax withholding last 

year.

On February 16

Forms W-4 claiming exemption from withholding expire. Any Form W-4 claiming exemption from withholding for the previous year has now expired. Begin 

withholding for any employee who previously claimed 

exemption from withholding but hasn't given you a new 

Form W-4 for the current year. If the employee doesn't 

give you a new Form W-4, withhold tax as if he or she 

had checked the box for Single or Married filing separately in Step 1(c) and made no entries in Step 2, Step 

3, or Step 4 of the 2022 Form W-4. See section 9 for 

more information. If the employee gives you a new Form 

W-4 claiming exemption from withholding after February 

15, you may apply the exemption to future wages, but 

don't refund taxes withheld while the exempt status 

wasn't in place.

By February 28

File paper 2021 Forms 1099 and 1096. File Copy A 

of all paper 2021 Forms 1099, except Forms 1099-NEC, 

with Form 1096 with the IRS. For electronically filed returns, see By March 31, later.

File paper Form 8027. File paper Form 8027, Employer's Annual Information Return of Tip Income and 

Allocated Tips, with the IRS. See section 6. For electronically filed returns, see By March 31 next.

By March 31

File electronic 2021 Forms 1099 and 8027. File 

electronic 2021 Forms 1099, except Forms 1099-NEC, 

with the IRS. Also file electronic Form 8027 with the IRS. 

For information on filing information returns electronically with the IRS, see Pub. 1220 and Pub. 1239, Specifications for Electronic Filing of Form 8027, Employer's 

Annual Information Return of Tip Income and Allocated 

Tips.

By April 30, July 31, October 31, and 

January 31

Deposit FUTA taxes. Deposit FUTA tax for the quarter (including any amount carried over from other quarters) if over $500. If $500 or less, carry it over to the next 

quarter. See section 14 for more information.

File Form 941. File Form 941 and deposit any undeposited income, social security, and Medicare taxes. 

You may pay these taxes with Form 941 if your total tax 

liability for the quarter (Form 941, line 12) is less than 

$2,500. If you timely deposited all taxes when due, you 

may file by May 10, August 10, November 10, or February 10, respectively. Don't file Form 941 for these quarters if you have been notified to file Form 944 and you 

didn't request and receive written notice from the IRS to 

file quarterly Forms 941.

Before December 1

New Forms W-4. Remind employees to submit a new 

Form W-4 if their filing status, other income, deductions, 

or credits have changed or will change for the next year.

If you deferred the employer share of social security tax under the CARES Act, one-half is due 

by December 31, 2021, and the remainder is due 

by December 31, 2022. Any payments or deposits you 

make before December 31, 2021, are first applied against 

your payment due on December 31, 2021, and then applied against your payment due on December 31, 2022. If 

you deferred the employee share of social security taxes 

under Notice 2020-65 and Notice 2021-11, you must withhold and pay the deferred taxes ratably from wages paid 

between January 1, 2021, and December 31, 2021. Because both December 31, 2021, and December 31, 2022, 

are nonbusiness days, payments made on the next business day will be considered timely. For more information 

and payment instructions, see the Instructions for Form 

941 or the Instructions for Form 944, IRS.gov/ETD, Notice 

2020-65, and Notice 2021-11.

Introduction

This publication explains your tax responsibilities as an 

employer. It explains the requirements for withholding, depositing, reporting, paying, and correcting employment 

taxes. It explains the forms you must give to your employees, those your employees must give to you, and those 

you must send to the IRS and the SSA. References to “income tax” in this guide apply only to federal income tax. 

Contact your state or local tax department to determine 

their rules.

When you pay your employees, you don't pay them all 

the money they earned. As their employer, you have the 

added responsibility of withholding taxes from their paychecks. The federal income tax and employees' share of 

social security and Medicare taxes that you withhold from 

your employees' paychecks are part of their wages that 

you pay to the U.S. Treasury instead of to your employees. Your employees trust that you pay the withheld taxes 

to the U.S. Treasury by making federal tax deposits. This 

is the reason that these withheld taxes are called trust 

fund taxes. If federal income, social security, or Medicare 

TIP

Page 10 Publication 15 (2022)
taxes that must be withheld aren't withheld or aren't deposited or paid to the U.S. Treasury, the trust fund recovery penalty may apply. See section 11 for more information.

Additional employment tax information is available in 

Pubs. 15-A, 15-B, and 15-T. Pub. 15-A includes specialized information supplementing the basic employment tax 

information provided in this publication. Pub. 15-B, Employer's Tax Guide to Fringe Benefits, contains information about the employment tax treatment and valuation of 

various types of noncash compensation. Pub. 15-T includes the federal income tax withholding tables and instructions on how to use the tables.

Most employers must withhold (except FUTA), deposit, 

report, and pay the following employment taxes.

• Income tax.

• Social security tax.

• Medicare tax.

• FUTA tax.

There are exceptions to these requirements. See section 15 for guidance. Railroad retirement taxes are explained in the Instructions for Form CT-1. Employment 

taxes for agricultural employers are explained in Pub. 51. 

If you have employees in the U.S. Virgin Islands, Guam, 

American Samoa, or the Commonwealth of the Northern 

Mariana Islands, see Pub. 80.

Comments and suggestions. We welcome your comments about this publication and your suggestions for future editions.

You can send us comments through IRS.gov/

FormComments.

Or you can write to:

Internal Revenue Service

Tax Forms and Publications

1111 Constitution Ave. NW, IR-6526

Washington, DC 20224

Although we can’t respond individually to each comment received, we do appreciate your feedback and will 

consider your comments as we revise our tax forms, instructions, and publications. Don’t send tax questions, tax 

returns, or payments to this address.

Getting answers to your tax questions. If you have 

a tax question not answered by this publication, check 

IRS.gov and How To Get Tax Help at the end of this publication.

Federal government employers. The information in this 

publication, including the rules for making federal tax deposits, applies to federal agencies.

State and local government employers. Payments to 

employees for services in the employ of state and local 

government employers are generally subject to federal income tax withholding but not FUTA tax. Most elected and 

appointed public officials of state or local governments are 

employees under common law rules. See chapter 3 of 

Pub. 963, Federal-State Reference Guide. In addition, wages, with certain exceptions, are subject to social security 

and Medicare taxes. See section 15 for more information 

on the exceptions.

If an election worker is employed in another capacity 

with the same government entity, see Revenue Ruling 

2000-6 on page 512 of Internal Revenue Bulletin 2000-6 

at IRS.gov/pub/irs-irbs/irb00-06.pdf.

You can get information on reporting and social security coverage from your local IRS office. If you have any 

questions about coverage under a section 218 (Social Security Act) agreement, contact the appropriate state official. To find your State Social Security Administrator, visit 

the National Conference of State Social Security Administrators website at NCSSSA.org.

Indian tribal governments. See Pub. 4268 for employment tax information for Indian tribal governments.

Disregarded entities and qualified subchapter S subsidiaries (QSubs). Eligible single-owner disregarded entities and QSubs are treated as separate entities for employment tax purposes. Eligible single-member entities 

must report and pay employment taxes on wages paid to 

their employees using the entities' own names and EINs. 

See Regulations sections 1.1361-4(a)(7) and 

301.7701-2(c)(2)(iv).

1. Employer Identification 

Number (EIN)

If you’re required to report employment taxes or give tax 

statements to employees or annuitants, you need an EIN.

The EIN is a nine-digit number the IRS issues. The digits are arranged as follows: 00-0000000. It is used to identify the tax accounts of employers and certain others who 

have no employees. Use your EIN on all of the items you 

send to the IRS and the SSA. For more information, see 

Pub. 1635.

If you don’t have an EIN, you may apply for one online 

by visiting the IRS website at IRS.gov/EIN. You may also 

apply for an EIN by faxing or mailing Form SS-4 to the 

IRS. If the principal business was created or organized 

outside of the United States or U.S. territories, you may 

also apply for an EIN by calling 267-941-1099 (toll call). 

Don't use an SSN in place of an EIN.

You should have only one EIN. If you have more than 

one and aren't sure which one to use, call 800-829-4933 

or 800-829-4059 (TDD/TTY for persons who are deaf, 

hard of hearing, or have a speech disability). Give the 

numbers you have, the name and address to which each 

was assigned, and the address of your main place of business. The IRS will tell you which number to use. For more 

information, see Pub. 1635.

If you took over another employer's business (see Successor employer in section 9), don't use that employer's 

EIN. If you’ve applied for an EIN but don't have your EIN 

by the time a return is due, file a paper return and write 

Publication 15 (2022) Page 11
“Applied For” and the date you applied for it in the space 

shown for the number.

Always be sure the EIN on the form you file exactly matches the EIN the IRS assigned to your 

business. Don't use your SSN or individual taxpayer identification number (ITIN) on forms that ask for an 

EIN. If you used an EIN (including a prior owner's EIN) on 

Form 941, or Form 944, that is different from the EIN reported on Form W-3, see Box h—Other EIN used this year 

in the General Instructions for Forms W-2 and W-3. The 

name and EIN on Form 945 must match the name and 

EIN on your information returns where federal income tax 

withholding is reported (for example, backup withholding 

reported on Form 1099-NEC). Filing a Form 945 with an 

incorrect EIN or using another business's EIN may result 

in penalties and delays in processing your return.

2. Who Are Employees?

Generally, employees are defined either under common 

law or under statutes for certain situations. See Pub. 15-A 

for details on statutory employees and nonemployees.

Employee status under common law. 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. This is so even when you give the employee 

freedom of action. What matters is that you have the right 

to control the details of how the services are performed. 

See Pub. 15-A for more information on how to determine 

whether an individual providing services is an independent contractor or an employee.

Generally, people in business for themselves aren't 

employees. For example, doctors, lawyers, veterinarians, 

and others in an independent trade in which they offer 

their services to the public are usually not employees. If 

the business is incorporated, corporate officers who work 

in the business are employees of the corporation.

If an employer-employee relationship exists, it doesn't 

matter what it is called. The employee may be called an 

agent or independent contractor. It also doesn't matter 

how payments are measured or paid, what they’re called, 

or if the employee works full or part time.

Statutory employees. If someone who works for you 

isn't an employee under the common law rules discussed 

earlier, don't withhold federal income tax from his or her 

pay, unless backup withholding applies. Although the following persons may not be common law employees, 

they’re considered employees by statute for social security and Medicare tax purposes under certain conditions.

• An agent or commission driver who delivers meat, 

vegetable, fruit, or bakery products; beverages (other 

than milk); laundry; or dry cleaning for someone else.

• A full-time life insurance salesperson who sells primarily for one company.

• A homeworker who works at home or off premises according to guidelines of the person for whom the work 

CAUTION

!

is done, with materials or goods furnished by and returned to that person or to someone that person designates.

• A traveling or city salesperson (other than an agent or 

commission driver) who works full time (except for 

sideline sales activities) for one firm or person getting 

orders from customers. The orders must be for merchandise for resale or supplies for use in the customer's business. The customers must be retailers, 

wholesalers, contractors, or operators of hotels, restaurants, or other businesses dealing with food or 

lodging.

For FUTA tax, an agent or commission driver and a 

traveling or city salesperson are considered statutory employees; however, a full-time life insurance salesperson 

and a homeworker aren't considered statutory employees.

Statutory nonemployees. Direct sellers, qualified real 

estate agents, and certain companion sitters are, by law, 

considered nonemployees. They’re generally treated as 

self-employed for all federal tax purposes, including income and employment taxes. See Pub. 15-A for more information.

H-2A agricultural workers. On Form W-2, don't check 

box 13 (Statutory employee), as H-2A workers aren't statutory employees.

Treating employees as nonemployees. You’ll generally be liable for social security and Medicare taxes and 

withheld income tax if you don't deduct and withhold these 

taxes because you treated an employee as a nonemployee. You may be able to figure your liability using special section 3509 rates for the employee share of social 

security and Medicare taxes and federal income tax withholding. The applicable rates depend on whether you filed 

required Forms 1099. You can't recover the employee 

share of social security tax, Medicare tax, or income tax 

withholding from the employee if the tax is paid under section 3509. You’re liable for the income tax withholding regardless of whether the employee paid income tax on the 

wages. You continue to owe the full employer share of social security and Medicare taxes. The employee remains 

liable for the employee share of social security and Medicare taxes. See section 3509 for details. Also see the Instructions for Form 941-X or the Instructions for Form 

944-X.

Section 3509 rates aren't available if you intentionally 

disregard the requirement to withhold taxes from the employee or if you withheld income taxes but not social security or Medicare taxes. Section 3509 isn't available for 

reclassifying statutory employees. See Statutory employees, earlier.

If the employer issued required information returns, the 

section 3509 rates are the following.

• For social security taxes: employer rate of 6.2% plus 

20% of the employee rate of 6.2%, for a total rate of 

7.44% of wages.

Page 12 Publication 15 (2022)
• For Medicare taxes: employer rate of 1.45% plus 20% 

of the employee rate of 1.45%, for a total rate of 

1.74% of wages.

• For Additional Medicare Tax: 0.18% (20% of the employee rate of 0.9%) of wages subject to Additional 

Medicare Tax.

• For federal income tax withholding, the rate is 1.5% of 

wages.

If the employer didn't issue required information returns, the section 3509 rates are the following.

• For social security taxes: employer rate of 6.2% plus 

40% of the employee rate of 6.2%, for a total rate of 

8.68% of wages.

• For Medicare taxes: employer rate of 1.45% plus 40% 

of the employee rate of 1.45%, for a total rate of 

2.03% of wages.

• For Additional Medicare Tax: 0.36% (40% of the employee rate of 0.9%) of wages subject to Additional 

Medicare Tax.

• For federal income tax withholding, the rate is 3.0% of 

wages.

Relief provisions. If you have a reasonable basis for 

not treating a worker as an employee, you may be relieved from having to pay employment taxes for that 

worker. To get this relief, you must file all required federal 

tax returns, including information returns, on a basis consistent with your treatment of the worker. You (or your 

predecessor) must not have treated any worker holding a 

substantially similar position as an employee for any periods beginning after 1977. See Pub. 1976, Do You Qualify 

for Relief Under Section 530.

IRS help. If you want the IRS to determine whether a 

worker is an employee, file Form SS-8.

Voluntary Classification Settlement Program (VCSP). 

Employers who are currently treating their workers (or a 

class or group of workers) as independent contractors or 

other nonemployees and want to voluntarily reclassify 

their workers as employees for future tax periods may be 

eligible to participate in the VCSP if certain requirements 

are met. File Form 8952 to apply for the VCSP. For more 

information, go to IRS.gov/VCSP.

Business Owned and Operated by 

Spouses

If you and your spouse jointly own and operate a business 

and share in the profits and losses, you may be partners 

in a partnership, whether or not you have a formal partnership agreement. See Pub. 541 for more details. The partnership is considered the employer of any employees, 

and is liable for any employment taxes due on wages paid 

to its employees.

Exception—Qualified joint venture. For tax years beginning after 2006, the Small Business and Work Opportunity Tax Act of 2007 (Public Law 110-28) provides that a 

“qualified joint venture,” whose only members are spouses filing a joint income tax return, can elect not to be treated as a partnership for federal tax purposes. A qualified 

joint venture conducts a trade or business where:

• The only members of the joint venture are spouses 

who file a joint income tax return,

• Both spouses materially participate (see Material participation in the instructions for Schedule C (Form 

1040), line G) in the trade or business (mere joint ownership of property isn't enough),

• Both spouses elect to not be treated as a partnership, 

and

• The business is co-owned by both spouses and isn't 

held in the name of a state law entity such as a partnership or limited liability company (LLC).

To make the election, all items of income, gain, loss, 

deduction, and credit must be divided between the spouses, in accordance with each spouse's interest in the venture, and reported as sole proprietors on a separate 

Schedule C (Form 1040) or Schedule F (Form 1040). 

Each spouse must also file a separate Schedule SE (Form 

1040) to pay self-employment taxes, as applicable.

Spouses using the qualified joint venture rules are treated as sole proprietors for federal tax purposes and generally don't need an EIN. If employment taxes are owed by 

the qualified joint venture, either spouse may report and 

pay the employment taxes due on the wages paid to the 

employees using the EIN of that spouse's sole proprietorship. Generally, filing as a qualified joint venture won't increase the spouses' total tax owed on the joint income tax 

return. However, it gives each spouse credit for social security earnings on which retirement benefits are based 

and for Medicare coverage without filing a partnership return.

Note. If your spouse is your employee, not your partner, see One spouse employed by another in section 3.

For more information on qualified joint ventures, go to 

IRS.gov/QJV.

Exception—Community income. If you and your 

spouse wholly own an unincorporated business as community property under the community property laws of a 

state, foreign country, or U.S. possession, you can treat 

the business either as a sole proprietorship (of the spouse 

who carried on the business) or a partnership. You may 

still make an election to be taxed as a qualified joint venture instead of a partnership. See Exception—Qualified 

joint venture, earlier.

3. Family Employees

Child employed by parents. Payments for the services 

of a child under age 18 who works for his or her parent in 

a trade or business aren't subject to social security and 

Medicare taxes if the trade or business is a sole proprietorship or a partnership in which each partner is a parent 

of the child. If these payments are for work other than in a 

trade or business, such as domestic work in the parent's 

Publication 15 (2022) Page 13
private home, they’re not subject to social security and 

Medicare taxes until the child reaches age 21. However, 

see Covered services of a child or spouse, later. Payments for the services of a child under age 21 who works 

for his or her parent, whether or not in a trade or business, 

aren't subject to FUTA tax. Payments for the services of a 

child of any age who works for his or her parent are generally subject to income tax withholding unless the payments are for domestic work in the parent's home, or unless the payments are for work other than in a trade or 

business and are less than $50 in the quarter or the child 

isn't regularly employed to do such work.

One spouse employed by another. The wages for the 

services of an individual who works for his or her spouse 

in a trade or business are subject to income tax withholding and social security and Medicare taxes, but not to 

FUTA tax. However, the payments for services of one 

spouse employed by another in other than a trade or business, such as domestic service in a private home, aren't 

subject to social security, Medicare, and FUTA taxes.

Covered services of a child or spouse. The wages for 

the services of a child or spouse are subject to income tax 

withholding as well as social security, Medicare, and 

FUTA taxes if he or she works for:

• A corporation, even if it is controlled by the child's parent or the individual's spouse;

• A partnership, even if the child's parent is a partner, 

unless each partner is a parent of the child;

• A partnership, even if the individual's spouse is a partner; or

• An estate, even if it is the estate of a deceased parent.

In these situations, the child or spouse is considered to 

work for the corporation, partnership, or estate, not you.

Parent employed by son or daughter. When the employer is a son or daughter employing his or her parent, 

the following rules apply.

• Payments for the services of a parent in the son’s or 

daughter’s (the employer’s) trade or business are subject to income tax withholding and social security and 

Medicare taxes.

• Payments for the services of a parent not in the son’s 

or daughter’s (the employer’s) trade or business are 

generally not subject to social security and Medicare 

taxes.

Social security and Medicare taxes do apply to 

payments made to a parent for domestic services 

if all of the following apply.

• The parent is employed by his or her son or daughter.

• The son or daughter (the employer) has a child or 

stepchild (including an adopted child) living in the 

home.

• The son or daughter (the employer) is a widow or widower, divorced and not remarried, or living with a 

spouse who, because of a mental or physical 

CAUTION

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condition, can't care for the child or stepchild for at 

least 4 continuous weeks in the calendar quarter in 

which the service is performed.

• The child or stepchild is either under age 18 or, due to 

a mental or physical condition, requires the personal 

care of an adult for at least 4 continuous weeks in the 

calendar quarter in which the service is performed.

Payments made to a parent employed by his or her 

child aren't subject to FUTA tax, regardless of the type of 

services provided.

4. Employee's Social Security 

Number (SSN)

You’re required to get each employee's name and SSN 

and to enter them on Form W-2. This requirement also applies to resident and nonresident alien employees. You 

should ask your employee to show you his or her social 

security card. The employee may show the card if it is 

available.

Don't accept a social security card that says “Not 

valid for employment.” An SSN issued with this 

legend doesn't permit employment.

You may, but aren't required to, photocopy the social 

security card if the employee provides it. If you don't provide the correct employee name and SSN on Form W-2, 

you may owe a penalty unless you have reasonable 

cause. See Pub. 1586, Reasonable Cause Regulations & 

Requirements for Missing and Incorrect Name/TINs, for 

information on the requirement to solicit the employee's 

SSN.

Applying for a social security card. Any employee 

who is legally eligible to work in the United States and 

doesn't have a social security card can get one by completing Form SS-5, Application for a Social Security Card, 

and submitting the necessary documentation. You can get 

Form SS-5 from the SSA website at SSA.gov/forms/

ss-5.pdf, at SSA offices, or by calling 800-772-1213 or 

800-325-0778 (TTY). The employee must complete and 

sign Form SS-5; it can't be filed by the employer. You may 

be asked to supply a letter to accompany Form SS-5 if the 

employee has exceeded his or her yearly or lifetime limit 

for the number of replacement cards allowed.

Applying for an SSN. If you file Form W-2 on paper and 

your employee applied for an SSN but doesn't have one 

when you must file Form W-2, enter “Applied For” on the 

form. If you’re filing electronically, enter all zeros 

(000-00-0000 if creating forms online or 000000000 if uploading a file) in the SSN field. When the employee receives the SSN, file Copy A of Form W-2c, Corrected 

Wage and Tax Statement, with the SSA to show the employee's SSN. Furnish Copies B, C, and 2 of Form W-2c 

to the employee. Up to 25 Forms W-2c for each Form 

W-3c, Transmittal of Corrected Wage and Tax Statements, may be filed per session over the Internet, with no 

CAUTION

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Page 14 Publication 15 (2022)
limit on the number of sessions. For more information, visit 

the SSA's Employer W-2 Filing Instructions & Information 

webpage at SSA.gov/employer. Advise your employee to 

correct the SSN on his or her original Form W-2.

Correctly record the employee's name and SSN. Record the name and SSN of each employee as they’re 

shown on the employee's social security card. If the employee's name isn't correct as shown on the card (for example, because of marriage or divorce), the employee 

should request an updated card from the SSA. Continue 

to report the employee's wages under the old name until 

the employee shows you the updated social security card 

with the corrected name.

If the SSA issues the employee an updated card after a 

name change, or a new card with a different SSN after a 

change in alien work status, file a Form W-2c to correct 

the name/SSN reported for the most recently filed Form 

W-2. It isn't necessary to correct other years if the previous name and number were used for years before the 

most recent Form W-2.

IRS individual taxpayer identification numbers 

(ITINs) for aliens. Don't accept an ITIN in place of an 

SSN for employee identification or for work. An ITIN is 

only available to resident and nonresident aliens who 

aren't eligible for U.S. employment and need identification 

for other tax purposes. You can identify an ITIN because it 

is a nine-digit number, formatted like an SSN, that starts 

with the number "9" and has a range of numbers from “50–

65,” “70–88,” “90–92,” and “94–99” for the fourth and fifth 

digits (for example, 9NN-7N-NNNN). For more information about ITINs, see the Instructions for Form W-7 or go 

to IRS.gov/ITIN.

An individual with an ITIN who later becomes eligible to work in the United States must obtain an 

SSN. If the individual is currently eligible to work 

in the United States, instruct the individual to apply for an 

SSN and follow the instructions under Applying for an 

SSN, earlier. Don't use an ITIN in place of an SSN on 

Form W-2.

Verification of SSNs. Employers and authorized reporting agents can use the Social Security Number Verification Service (SSNVS) to instantly verify that an employee 

name matches an SSN for up to 10 names and SSNs (per 

screen) at a time, or submit an electronic file of up to 

250,000 names and SSNs and usually receive the results 

the next business day. Go to SSA.gov/employer/ssnv.htm 

for more information. A person may have a valid SSN but 

not be authorized to work in the United States. Employers 

may use E-Verify at e-verify.gov to confirm the employment eligibility of newly hired employees.

Registering for SSNVS. You must register online to 

use SSNVS. To register, visit the SSA's website at 

SSA.gov/bso and click on the Register link under Business Services Online. Follow the registration instructions 

to obtain a user identification (ID) and password. You’ll 

CAUTION

!

need to provide the following information about yourself 

and your company.

• Name.

• SSN.

• Date of birth.

• Type of employer.

• EIN.

• Company name, address, and telephone number.

• Email address.

When you have completed the online registration process, the SSA will mail a one-time activation code to you. 

You must enter the activation code online to use SSNVS. 

Your employees must receive authorization from you to 

use SSNVS. If your employees register, the one-time activation code will be mailed to you.

5. Wages and Other 

Compensation

Wages subject to federal employment taxes generally include all pay you give to an employee for services performed. The pay may be in cash or in other forms. It includes salaries, vacation allowances, bonuses, 

commissions, and taxable fringe benefits. It doesn't matter 

how you measure or make the payments. Amounts an 

employer pays as a bonus for signing or ratifying a contract in connection with the establishment of an employer-employee relationship and an amount paid to an 

employee for cancellation of an employment contract and 

relinquishment of contract rights are wages subject to social security, Medicare, and FUTA taxes and income tax 

withholding. Also, compensation paid to a former employee for services performed while still employed is wages subject to employment taxes.

More information. See section 6 for a discussion of tips 

and section 7 for a discussion of supplemental wages. 

Also, see section 15 for exceptions to the general rules for 

wages. Pub. 15-A provides additional information on wages, including nonqualified deferred compensation, and 

other compensation. Pub. 15-B provides information on 

other forms of compensation, including:

• Accident and health benefits,

• Achievement awards,

• Adoption assistance,

• Athletic facilities,

• De minimis (minimal) benefits,

• Dependent care assistance,

• Educational assistance,

• Employee discounts,

• Employee stock options,

Publication 15 (2022) Page 15
• Employer-provided cell phones,

• Group-term life insurance coverage,

• Health savings accounts,

• Lodging on your business premises,

• Meals,

• No-additional-cost services,

• Retirement planning services,

• Transportation (commuting) benefits,

• Tuition reduction, and

• Working condition benefits.

Employee business expense reimbursements. A reimbursement or allowance arrangement is a system by 

which you pay the advances, reimbursements, and 

charges for your employees' business expenses. How you 

report a reimbursement or allowance amount depends on 

whether you have an accountable or a nonaccountable 

plan. If a single payment includes both wages and an expense reimbursement, you must specify the amount of the 

reimbursement.

These rules apply to all allowable ordinary and necessary employee business expenses.

Accountable plan. To be an accountable plan, your 

reimbursement or allowance arrangement must require 

your employees to meet all three of the following rules.

1. They must have paid or incurred allowable expenses 

while performing services as your employees. The reimbursement or advance must be payment for the expenses and must not be an amount that would have 

otherwise been paid to the employee as wages.

2. They must substantiate these expenses to you within 

a reasonable period of time.

3. They must return any amounts in excess of substantiated expenses within a reasonable period of time.

Amounts paid under an accountable plan aren't wages 

and aren't subject to income, social security, Medicare, 

and FUTA taxes.

If the expenses covered by this arrangement aren't 

substantiated (or amounts in excess of substantiated expenses aren't returned within a reasonable period of time), 

the amount paid under the arrangement in excess of the 

substantiated expenses is treated as paid under a nonaccountable plan. This amount is subject to income, social 

security, Medicare, and FUTA taxes for the first payroll period following the end of the reasonable period of time.

A reasonable period of time depends on the facts and 

circumstances. Generally, it is considered reasonable if 

your employees receive their advance within 30 days of 

the time they pay or incur the expenses, adequately account for the expenses within 60 days after the expenses 

were paid or incurred, and return any amounts in excess 

of expenses within 120 days after the expenses were paid 

or incurred. Alternatively, it is considered reasonable if 

you give your employees a periodic statement (at least 

quarterly) that asks them to either return or adequately 

account for outstanding amounts and they do so within 

120 days.

Nonaccountable plan. Payments to your employee 

for travel and other necessary expenses of your business 

under a nonaccountable plan are wages and are treated 

as supplemental wages and subject to income, social security, Medicare, and FUTA taxes. Your payments are 

treated as paid under a nonaccountable plan if:

• Your employee isn't required to or doesn't substantiate timely those expenses to you with receipts or other 

documentation,

• You advance an amount to your employee for business expenses and your employee isn't required to or 

doesn't return timely any amount he or she doesn't 

use for business expenses,

• You advance or pay an amount to your employee regardless of whether you reasonably expect the employee to have business expenses related to your 

business, or

• You pay an amount as a reimbursement you would 

have otherwise paid as wages.

See section 7 for more information on supplemental 

wages.

Per diem or other fixed allowance. You may reimburse your employees by travel days, miles, or some 

other fixed allowance under the applicable revenue procedure. In these cases, your employee is considered to have 

accounted to you if your reimbursement doesn't exceed 

rates established by the federal government. The standard mileage rate for auto expenses is provided in Pub. 

15-B. 

The government per diem rates for meals and lodging 

in the continental United States can be found by visiting 

the U.S. General Services Administration website at 

GSA.gov/PerDiemRates. Other than the amount of these 

expenses, your employees' business expenses must be 

substantiated (for example, the business purpose of the 

travel or the number of business miles driven). For information on substantiation methods, see Pub. 463.

If the per diem or allowance paid exceeds the amounts 

substantiated, you must report the excess amount as wages. This excess amount is subject to income tax withholding and payment of social security, Medicare, and 

FUTA taxes. Show the amount equal to the substantiated 

amount (that is, the nontaxable portion) in box 12 of Form 

W-2 using code “L.”

Wages not paid in money. If in the course of your trade 

or business you pay your employees in a medium that is 

neither cash nor a readily negotiable instrument, such as 

a check, you’re said to pay them “in kind.” Payments in 

kind may be in the form of goods, lodging, food, clothing, 

or services. Generally, the fair market value of such payments at the time they’re provided is subject to federal income tax withholding and social security, Medicare, and 

FUTA taxes.

However, noncash payments for household work, agricultural labor, and service not in the employer's trade or 

Page 16 Publication 15 (2022)
business are exempt from social security, Medicare, and 

FUTA taxes. Withhold income tax on these payments only 

if you and the employee agree to do so. Nonetheless, 

noncash payments for agricultural labor, such as commodity wages, are treated as cash payments subject to 

employment taxes if the substance of the transaction is a 

cash payment.

Meals and lodging. The value of meals isn't taxable income and isn't subject to federal income tax withholding 

and social security, Medicare, and FUTA taxes if the 

meals are furnished for the employer's convenience and 

on the employer's premises. The value of lodging isn't 

subject to federal income tax withholding and social security, Medicare, and FUTA taxes if the lodging is furnished for the employer's convenience, on the employer's 

premises, and as a condition of employment.

“For the convenience of the employer” means you have 

a substantial business reason for providing the meals and 

lodging other than to provide additional compensation to 

the employee. For example, meals you provide at the 

place of work so that an employee is available for emergencies during his or her lunch period are generally considered to be for your convenience. You must be able to 

show these emergency calls have occurred or can reasonably be expected to occur, and that the calls have resulted, or will result, in you calling on your employees to 

perform their jobs during their meal period.

Whether meals or lodging are provided for the convenience of the employer depends on all of the facts and circumstances. A written statement that the meals or lodging 

are for your convenience isn't sufficient.

50% test. If over 50% of the employees who are provided meals on an employer's business premises receive 

these meals for the convenience of the employer, all 

meals provided on the premises are treated as furnished 

for the convenience of the employer. If this 50% test is 

met, the value of the meals is excludable from income for 

all employees and isn't subject to federal income tax withholding or employment taxes. For more information, see 

Pub. 15-B.

Health insurance plans. If you pay the cost of an accident or health insurance plan for your employees, including an employee's spouse and dependents, your payments aren't wages and aren't subject to social security, 

Medicare, and FUTA taxes, or federal income tax withholding. Generally, this exclusion also applies to qualified 

long-term care insurance contracts. However, for income 

tax withholding, the value of health insurance benefits 

must be included in the wages of S corporation employees who own more than 2% of the S corporation (2% 

shareholders). For social security, Medicare, and FUTA 

taxes, the health insurance benefits are excluded from the 

2% shareholder's wages. See Announcement 92-16 for 

more information. You can find Announcement 92-16 on 

page 53 of Internal Revenue Bulletin 1992-5.

Health savings accounts (HSAs) and medical savings accounts (MSAs). Your contributions to an employee's HSA or Archer MSA aren't subject to social 

security, Medicare, or FUTA taxes, or federal income tax 

withholding if it is reasonable to believe at the time of payment of the contributions they’ll be excludable from the income of the employee. To the extent it isn't reasonable to 

believe they’ll be excludable, your contributions are subject to these taxes. Employee contributions to their HSAs 

or MSAs through a payroll deduction plan must be included in wages and are subject to social security, Medicare, 

and FUTA taxes and income tax withholding. However, 

HSA contributions made under a salary reduction arrangement in a section 125 cafeteria plan aren't wages 

and aren't subject to employment taxes or withholding. 

For more information, see the Instructions for Form 8889.

Medical care reimbursements. Generally, medical care 

reimbursements paid for an employee under an employer's self-insured medical reimbursement plan aren't wages and aren't subject to social security, Medicare, and 

FUTA taxes, or income tax withholding. See Pub. 15-B for 

a rule regarding inclusion of certain reimbursements in the 

gross income of highly compensated individuals.

Differential wage payments. Differential wage payments are any payments made by an employer to an individual for a period during which the individual is performing service in the uniformed services while on active duty 

for a period of more than 30 days and represent all or a 

portion of the wages the individual would have received 

from the employer if the individual were performing services for the employer.

Differential wage payments are wages for income tax 

withholding, but aren't subject to social security, Medicare, or FUTA taxes. Employers should report differential 

wage payments in box 1 of Form W-2. For more information about the tax treatment of differential wage payments, 

see Revenue Ruling 2009-11, 2009-18 I.R.B. 896, available at IRS.gov/irb/2009-18_IRB#RR-2009-11.

Fringe benefits. You must generally include fringe benefits in an employee's wages (but see Nontaxable fringe 

benefits next). The benefits are subject to income tax 

withholding and employment taxes. Fringe benefits include cars you provide, flights on aircraft you provide, free 

or discounted commercial flights, vacations, discounts on 

property or services, memberships in country clubs or 

other social clubs, and tickets to entertainment or sporting 

events. In general, the amount you must include is the 

amount by which the fair market value of the benefit is 

more than the sum of what the employee paid for it plus 

any amount the law excludes. There are other special 

rules you and your employees may use to value certain 

fringe benefits. See Pub. 15-B for more information.

Nontaxable fringe benefits. Some fringe benefits 

aren't taxable (or are minimally taxable) if certain conditions are met. See Pub. 15-B for details. The following are 

some examples of nontaxable fringe benefits.

• Services provided to your employees at no additional 

cost to you.

• Qualified employee discounts.

Publication 15 (2022) Page 17
• Working condition fringes that are property or services 

that would be allowable as a business expense or depreciation expense deduction to the employee if he or 

she had paid for them. Examples include a company 

car for business use and subscriptions to business 

magazines.

• Certain minimal value fringes (including an occasional 

cab ride when an employee must work overtime and 

meals you provide at eating places you run for your 

employees if the meals aren't furnished at below cost).

• Qualified transportation fringes subject to specified 

conditions and dollar limitations (including transportation in a commuter highway vehicle, any transit pass, 

and qualified parking).

• The use of on-premises athletic facilities operated by 

you if substantially all of the use is by employees, their 

spouses, and their dependent children.

• Qualified tuition reduction an educational organization 

provides to its employees for education. For more information, see Pub. 970.

• Employer-provided cell phones provided primarily for 

a noncompensatory business reason.

However, don't exclude the following fringe benefits 

from the wages of highly compensated employees unless 

the benefit is available to other employees on a nondiscriminatory basis.

• No-additional-cost services.

• Qualified employee discounts.

• Meals provided at an employer-operated eating facility.

• Reduced tuition for education.

For more information, including the definition of a highly 

compensated employee, see Pub. 15-B.

When taxable fringe benefits are treated as paid. 

You may choose to treat certain taxable noncash fringe 

benefits as paid by the pay period, by the quarter, or on 

any other basis you choose, as long as you treat the benefits as paid at least once a year. You don't have to make 

a formal choice of payment dates or notify the IRS of the 

dates you choose. You don't have to make this choice for 

all employees. You may change methods as often as you 

like, as long as you treat all benefits provided in a calendar year as paid by December 31 of the calendar year. 

See section 4 of Pub. 15-B for more information, including 

a discussion of the special accounting rule for fringe benefits provided during November and December.

Valuation of fringe benefits. Generally, you must 

determine the value of fringe benefits no later than January 31 of the next year. Before January 31, you may reasonably estimate the value of the fringe benefits for purposes of withholding and depositing on time.

Withholding on fringe benefits. You may add the 

value of fringe benefits to regular wages for a payroll period and figure withholding taxes on the total, or you may 

withhold federal income tax on the value of the fringe 

benefits at the optional flat 22% supplemental wage rate. 

However, see Withholding on supplemental wages when 

an employee receives more than $1 million of supplemental wages during the calendar year in section 7.

You may choose not to withhold income tax on the 

value of an employee's personal use of a vehicle you provide. You must, however, withhold social security and 

Medicare taxes on the use of the vehicle. See Pub. 15-B 

for more information on this election.

Depositing taxes on fringe benefits. Once you 

choose when fringe benefits are paid, you must deposit 

taxes in the same deposit period you treat the fringe benefits as paid. To avoid a penalty, deposit the taxes following 

the general deposit rules for that deposit period.

If you determine by January 31 you overestimated the 

value of a fringe benefit at the time you withheld and deposited for it, you may claim a refund for the overpayment 

or have it applied to your next employment tax return. See 

Valuation of fringe benefits, earlier. If you underestimated 

the value and deposited too little, you may be subject to a 

failure-to-deposit (FTD) penalty. See section 11 for information on deposit penalties.

If you deposited the required amount of taxes but withheld a lesser amount from the employee, you can recover 

from the employee the social security, Medicare, or income taxes you deposited on his or her behalf and included in the employee's Form W-2. However, you must recover the income taxes before April 1 of the following 

year.

Sick pay. In general, sick pay is any amount you pay under a plan to an employee who is unable to work because 

of sickness or injury. These amounts are sometimes paid 

by a third party, such as an insurance company or an employees' trust. In either case, these payments are subject 

to social security, Medicare, and FUTA taxes. These 

taxes don't apply to sick pay paid more than 6 calendar 

months after the last calendar month in which the employee worked for the employer. The payments are always subject to federal income tax. See section 6 of Pub. 

15-A for more information.

For purposes of this publication, all references to 

"sick pay" mean ordinary sick pay, not "qualified 

sick leave wages" under the FFCRA, as amended 

by the COVID-related Tax Relief Act of 2020, and the 

ARP.

Identity protection services. The value of identity protection services provided by an employer to an employee 

isn't included in an employee's gross income and doesn't 

need to be reported on an information return (such as 

Form W-2) filed for employees. This includes identity protection services provided before a data breach occurs. 

This exception doesn't apply to cash received instead of 

identity protection services or to proceeds received under 

an identity theft insurance policy. For more information, 

see Announcement 2015-22, 2015-35 I.R.B. 288, available at IRS.gov/irb/2015-35_IRB#ANN-2015-22, and Announcement 2016-02, 2016-3 I.R.B. 283, available at 

IRS.gov/irb/2016-03_IRB#ANN-2016-02.

TIP

Page 18 Publication 15 (2022)
6. Tips

Cash tips your employee receives from customers are 

generally subject to withholding. Your employee must report cash tips to you by the 10th of the month after the 

month the tips are received. Cash tips include tips paid by 

cash, check, debit card, and credit card. The report 

should include tips you paid over to the employee for 

charge customers, tips the employee received directly 

from customers, and tips received from other employees 

under any tip-sharing arrangement. Both directly and indirectly tipped employees must report tips to you. No report 

is required for months when tips are less than $20. Your 

employee reports the tips on Form 4070 or on a similar 

statement. The statement must be signed and dated by 

the employee and must include:

• The employee's name, address, and SSN;

• Your name and address;

• The month and year (or the beginning and ending 

dates, if the statement is for a period of less than 1 

calendar month) the report covers; and

• The total of tips received during the month or period.

Both Forms 4070 and 4070-A, Employee's Daily Record of Tips, are included in Pub. 1244, Employee's Daily 

Record of Tips and Report to Employer.

You’re permitted to establish a system for electronic tip reporting by employees. See Regulations section 31.6053-1(d).

Collecting taxes on tips. You must collect federal income tax, employee social security tax, and employee 

Medicare tax on the employee's tips. The withholding 

rules for withholding an employee's share of Medicare tax 

on tips also apply to withholding the Additional Medicare 

Tax once wages and tips exceed $200,000 in the calendar year.

You can collect these taxes from the employee's wages 

(excluding tips) or from other funds he or she makes available. See Tips are treated as supplemental wages in section 7 for more information. Stop collecting the employee 

social security tax when his or her wages and tips for tax 

year 2022 reach $147,000; collect the income and employee Medicare taxes for the whole year on all wages 

and tips. You’re responsible for the employer social security tax on wages and tips until the wages (including tips) 

reach the limit. You’re responsible for the employer Medicare tax for the whole year on all wages and tips. Tips are 

considered to be paid at the time the employee reports 

them to you. Deposit taxes on tips based on your deposit 

schedule as described in section 11. File Form 941 or 

Form 944 to report withholding and employment taxes on 

tips.

Ordering rule. If, by the 10th of the month after the 

month for which you received an employee's report on 

tips, you don't have enough employee funds available to 

deduct the employee tax, you no longer have to collect it. 

TIP

If there aren't enough funds available, withhold taxes in 

the following order.

1. Withhold on regular wages and other compensation.

2. Withhold social security and Medicare taxes on tips.

3. Withhold income tax on tips.

Reporting tips. Report tips and any collected and uncollected social security and Medicare taxes on Form W-2 

and on Form 941, lines 5b, 5c, and, if applicable, 5d 

(Form 944, lines 4b, 4c, and, if applicable, 4d). Report a 

negative adjustment on Form 941, line 9 (Form 944, 

line 6), for the uncollected social security and Medicare 

taxes. Enter the amount of uncollected social security tax 

and Medicare tax in box 12 of Form W-2 with codes “A” 

and “B,” respectively. Don't include any uncollected Additional Medicare Tax in box 12 of Form W-2. For additional 

information on reporting tips, see section 13 and the General Instructions for Forms W-2 and W-3.

Revenue Ruling 2012-18 provides guidance for employers regarding social security and Medicare taxes imposed on tips, including information on the reporting of the 

employer share of social security and Medicare taxes under section 3121(q), the difference between tips and service charges, and the section 45B credit. See Revenue 

Ruling 2012-18, 2012-26 I.R.B. 1032, available at 

IRS.gov/irb/2012-26_IRB#RR-2012-18.

FUTA tax on tips. If an employee reports to you in writing $20 or more of tips in a month, the tips are also subject 

to FUTA tax.

Allocated tips. If you operate a large food or beverage 

establishment, you must report allocated tips under certain circumstances. However, don't withhold income, social security, or Medicare taxes on allocated tips.

A large food or beverage establishment is one that provides food or beverages for consumption on the premises, 

where tipping is customary, and where there were normally more than 10 employees on a typical business day 

during the preceding year.

The tips may be allocated by one of three methods—hours worked, gross receipts, or good faith agreement. For information about these allocation methods, 

and for information about required electronic filing of Form 

8027, see the Instructions for Form 8027. For more information on filing Form 8027 electronically with the IRS, see 

Pub. 1239.

Tip Rate Determination and Education Program. Employers may participate in the Tip Rate Determination and 

Education Program. The program primarily consists of two 

voluntary agreements developed to improve tip income 

reporting by helping taxpayers to understand and meet 

their tip reporting responsibilities. The two agreements are 

the Tip Rate Determination Agreement (TRDA) and the 

Tip Reporting Alternative Commitment (TRAC). A tip 

agreement, the Gaming Industry Tip Compliance Agreement (GITCA), is available for the gaming (casino) industry. For more information, see Pub. 3144.

Publication 15 (2022) Page 19
More information. Advise your employees to see Pub. 

531 or use the IRS Interactive Tax Assistant at IRS.gov/

TipIncome for help in determining if their tip income is taxable and for information about how to report tip income.

7. Supplemental Wages

Supplemental wages are wage payments to an employee 

that aren't regular wages. They include, but aren't limited 

to, bonuses, commissions, overtime pay, payments for 

accumulated sick leave, severance pay, awards, prizes, 

back pay, reported tips, retroactive pay increases, and 

payments for nondeductible moving expenses. However, 

employers have the option to treat overtime pay and tips 

as regular wages instead of supplemental wages. Other 

payments subject to the supplemental wage rules include 

taxable fringe benefits and expense allowances paid under a nonaccountable plan. How you withhold on supplemental wages depends on whether the supplemental payment is identified as a separate payment from regular 

wages. See Regulations section 31.3402(g)-1 for additional guidance. Also see Revenue Ruling 2008-29, 

2008-24 I.R.B. 1149, available at IRS.gov/irb/

2008-24_IRB#RR-2008-29.

Withholding on supplemental wages when an employee receives more than $1 million of supplemental wages from you during the calendar year. Special 

rules apply to the extent supplemental wages paid to any 

one employee during the calendar year exceed $1 million. 

If a supplemental wage payment, together with other supplemental wage payments made to the employee during 

the calendar year, exceeds $1 million, the excess is subject to withholding at 37% (or the highest rate of income 

tax for the year). Withhold using the 37% rate without regard to the employee's Form W-4. In determining supplemental wages paid to the employee during the year, include payments from all businesses under common 

control. For more information, see Treasury Decision 

9276, 2006-37 I.R.B. 423, available at IRS.gov/irb/

2006-37_IRB#TD-9276.

Withholding on supplemental wage payments to an 

employee who doesn't receive $1 million of supplemental wages during the calendar year. If the supplemental wages paid to the employee during the calendar 

year are less than or equal to $1 million, the following 

rules apply in determining the amount of income tax to be 

withheld.

Supplemental wages combined with regular wages. 

If you pay supplemental wages with regular wages but 

don't specify the amount of each, withhold federal income 

tax as if the total were a single payment for a regular payroll period.

Supplemental wages identified separately from regular wages. If you pay supplemental wages separately 

(or combine them in a single payment and specify the 

amount of each), the federal income tax withholding 

method depends partly on whether you withhold income 

tax from your employee's regular wages.

1. If you withheld income tax from an employee's regular 

wages in the current or immediately preceding calendar year, you can use one of the following methods 

for the supplemental wages.

a. Withhold a flat 22% (no other percentage allowed).

b. If the supplemental wages are paid concurrently 

with regular wages, add the supplemental wages 

to the concurrently paid regular wages and withhold federal income tax as if the total were a single 

payment for a regular payroll period. If there are 

no concurrently paid regular wages, add the supplemental wages to, alternatively, either the regular wages paid or to be paid for the current payroll 

period or the regular wages paid for the preceding 

payroll period. Figure the income tax withholding 

as if the total of the regular wages and supplemental wages is a single payment. Subtract the tax already withheld or to be withheld from the regular 

wages. Withhold the remaining tax from the supplemental wages. If there were other payments of 

supplemental wages paid during the payroll period 

made before the current payment of supplemental 

wages, aggregate all the payments of supplemental wages paid during the payroll period with the 

regular wages paid during the payroll period, figure the tax on the total, subtract the tax already 

withheld from the regular wages and the previous 

supplemental wage payments, and withhold the 

remaining tax.

2. If you didn't withhold income tax from the employee's 

regular wages in the current or immediately preceding 

calendar year, use method 1b.

Regardless of the method you use to withhold income tax 

on supplemental wages, they’re subject to social security, 

Medicare, and FUTA taxes.

Example 1. You pay John Peters a base salary on the 

1st of each month. His most recent Form W-4 is from 

2018, and he is single, claims one withholding allowance, 

and did not enter an amount for additional withholding on 

his Form W-4. In January, he is paid $1,000. You decide 

to use the Wage Bracket Method of withholding. Using 

Worksheet 3 and the withholding tables in section 3 of 

Pub. 15-T, you withhold $29 from this amount. In February, he receives salary of $1,000 plus a commission of 

$500, which you combine with regular wages and don't 

separately identify. You figure the withholding based on 

the total of $1,500. The correct withholding from the tables 

is $78.

Example 2. You pay Sharon Warren a base salary on 

the 1st of each month. She submitted a 2022 Form W-4 

and checked the box that she is Single or Married filing 

separately. She did not complete Steps 2, 3, and 4 on her 

Form W-4. Her May 1 pay is $2,000. You decide to use 

the Wage Bracket Method of withholding. Using 

Page 20 Publication 15 (2022)
Worksheet 2 and the withholding tables in section 2 of 

Pub. 15-T, you withhold $95. On May 15, she receives a 

bonus of $1,000. Electing to use supplemental wage withholding method 1b, you do the following.

1. Add the bonus amount to the amount of wages from 

the most recent base salary pay date (May 1) ($2,000 

+ $1,000 = $3,000).

2. Determine the amount of withholding on the combined $3,000 amount to be $213 using the wage 

bracket tables.

3. Subtract the amount withheld from wages on the most 

recent base salary pay date (May 1) from the combined withholding amount ($213 – $95 = $118).

4. Withhold $118 from the bonus payment.

Example 3. The facts are the same as in Example 2, 

except you elect to use the flat rate method of withholding 

on the bonus. You withhold 22% of $1,000, or $220, from 

Sharon's bonus payment.

Example 4. The facts are the same as in Example 2, 

except you elect to pay Sharon a second bonus of $2,000 

on May 29. Using supplemental wage withholding method 

1b, you do the following.

1. Add the first and second bonus amounts to the 

amount of wages from the most recent base salary 

pay date (May 1) ($2,000 + $1,000 + $2,000 = 

$5,000).

2. Determine the amount of withholding on the combined $5,000 amount to be $500 using the wage 

bracket tables.

3. Subtract the amounts withheld from wages on the 

most recent base salary pay date (May 1) and the 

amounts withheld from the first bonus payment from 

the combined withholding amount ($500 – $95 – $118 

= $287).

4. Withhold $287 from the second bonus payment.

Tips are treated as supplemental wages. Withhold income tax on tips from wages earned by the employee or 

from other funds the employee makes available. Don't 

withhold the income tax due on tips from employee tips. If 

an employee receives regular wages and reports tips, figure income tax withholding as if the tips were supplemental wages. If you withheld income tax from the regular wages in the current or immediately preceding calendar year, 

you can withhold on the tips by method 1a or 1b discussed earlier in this section under Supplemental wages 

identified separately from regular wages. If you didn’t withhold income tax from the regular wages in the current or 

immediately preceding calendar year, add the tips to the 

regular wages and withhold income tax on the total by 

method 1b discussed earlier. Employers also have the option to treat tips as regular wages rather than supplemental wages. Service charges aren't tips; therefore, withhold 

taxes on service charges as you would on regular wages.

Vacation pay. Vacation pay is subject to withholding as if 

it were a regular wage payment. When vacation pay is in 

addition to regular wages for the vacation period (for example, an annual lump-sum payment for unused vacation 

leave), treat it as a supplemental wage payment. If the vacation pay is for a time longer than your usual payroll period, spread it over the pay periods for which you pay it.

8. Payroll Period

Your payroll period is a period of service for which you 

usually pay wages. When you have a regular payroll period, withhold income tax for that time period even if your 

employee doesn't work the full period.

No regular payroll period. When you don't have a regular payroll period, withhold the tax as if you paid wages 

for a daily or miscellaneous payroll period. Figure the 

number of days (including Sundays and holidays) in the 

period covered by the wage payment. If the wages are unrelated to a specific length of time (for example, commissions paid on completion of a sale), count back the number of days from the payment period to the latest of:

• The last wage payment made during the same calendar year;

• The date employment began, if during the same calendar year; or

• January 1 of the same year.

Employee paid for period less than 1 week. When 

you pay an employee for a period of less than 1 week, and 

the employee signs a statement under penalties of perjury 

indicating he or she isn't working for any other employer 

during the same week for wages subject to withholding, 

figure withholding based on a weekly payroll period. If the 

employee later begins to work for another employer for 

wages subject to withholding, the employee must notify 

you within 10 days. You then figure withholding based on 

the daily or miscellaneous period.

9. Withholding From 

Employees' Wages

Federal Income Tax Withholding

Redesigned Form W-4. The IRS redesigned Form W-4 

for 2020 and subsequent years. Before 2020, the value of 

a withholding allowance was tied to the amount of the personal exemption. Due to changes in the law, taxpayers 

can no longer claim personal exemptions or dependency 

exemptions; therefore, Form W-4 no longer asks an employee to report the number of withholding allowances 

that they are claiming. The revised Form W-4 is divided 

into five steps. Step 1 and Step 5 apply to all employees. 

In Step 1, employees enter personal information like their 

name and filing status. In Step 5, employees sign the 

Publication 15 (2022) Page 21
form. Employees who complete only Step 1 and Step 5 

will have their withholding figured based on their filing status's standard deduction and tax rates with no other adjustments. If applicable, in Step 2, employees increase 

their withholding to account for higher tax rates due to income from other jobs in their household. Under Step 2, 

employees either enter an additional amount to withhold 

per payroll period in Step 4(c) or check the box in Step 

2(c) for higher withholding rate tables to apply to their wages. In Step 3, employees decrease their withholding by 

reporting the annual amount of any credits they will claim 

on their income tax return. In Step 4, employees may increase or decrease their withholding based on the annual 

amount of other income or deductions they will report on 

their income tax return and they may also request any additional federal income tax they want withheld each pay 

period.

Employees who have submitted Form W-4 in any year 

before 2020 aren't required to submit a new form merely 

because of the redesign. Employers will continue to figure 

withholding based on the information from the employee's 

most recently submitted Form W-4. The withholding tables in Pub. 15-T allow employers to figure withholding 

based on a Form W-4 for 2019 or earlier, as well as the redesigned Form W-4. While you may ask your employees 

first paid wages before 2020 that have not yet submitted a 

redesigned Form W-4 to submit new Forms W-4 using the 

redesigned version of the form, you should explain to 

them that they’re not required to do this and if they don't 

submit a new Form W-4, withholding will continue based 

on a valid Form W-4 previously submitted. All newly hired 

employees must use the redesigned form. Similarly, any 

other employees who wish to adjust their withholding must 

use the redesigned form.

Pub. 15-T provides an optional computational bridge to 

treat 2019 or earlier Forms W-4 as if they were 2020 or 

later Forms W-4 for purposes of figuring federal income 

tax withholding. This computational bridge allows you to 

use computational procedures and data fields for a 2020 

and later Form W-4 to arrive at the equivalent withholding 

for an employee that would have applied using the computational procedures and data fields on a 2019 or earlier 

Form W-4. See How To Treat 2019 and Earlier Forms W4 as if They Were 2020 or Later Forms W-4 in the Introduction section of Pub. 15-T.

More information. For more information about the redesigned Form W-4 and regulations that provide guidance 

for employers concerning income tax withholding from 

employees’ wages, see Treasury Decision 9924, 2020-44 

I.R.B. 943, available at IRS.gov/irb/2020-44_IRB#TD9924. For information about Form W-4, go to IRS.gov/

FormW4. Employer instructions on how to figure employee withholding are provided in Pub. 15-T, available at 

IRS.gov/Pub15T. You may also use the Income Tax Withholding Assistant for Employers at IRS.gov/ITWA to help 

you figure federal income tax withholding; however, this 

transitional tool will no longer be available after 2022.

Using Form W-4 to figure withholding. To know how 

much federal income tax to withhold from employees' wages, you should have a Form W-4 on file for each employee. Encourage your employees to file an updated 

Form W-4 for 2022, especially if they owed taxes or received a large refund when filing their 2021 tax return.

Ask all new employees to give you a signed Form W-4 

when they start work. Make the form effective with the first 

wage payment. If a new employee doesn't give you a 

completed Form W-4 in 2022 (including an employee who 

previously worked for you and was rehired in 2022, and 

who fails to furnish a Form W-4), treat the new employee 

as if they had checked the box for Single or Married filing 

separately in Step 1(c) and made no entries in Step 2, 

Step 3, or Step 4 of the 2022 Form W-4. An employee 

who was paid wages before 2020 and who failed to furnish a Form W-4 should continue to be treated as single 

and claiming zero allowances on a 2019 Form W-4. If you 

use the optional computational bridge, described earlier 

under Redesigned Form W-4, you may treat this employee as if they had checked the box for Single or Married filing separately in Step 1(c), and made no entries in 

Step 2 and Step 3, an entry of $8,600 in Step 4(a), and an 

entry of zero in Step 4(b) of the 2022 Form W-4.

Form in Spanish. You can provide Formulario 

W-4(SP) in place of Form W-4 to your Spanish-speaking 

employees. For more information, see Pub. 17(SP). The 

rules discussed in this section that apply to Form W-4 also 

apply to Formulario W-4(SP).

Electronic system to receive Form W-4. You may 

establish a system to electronically receive Forms W-4 

from your employees. See Regulations section 31.3402(f)

(5)-1(c) and Pub. 15-A for more information.

Effective date of Form W-4. A Form W-4 for 2021 or 

earlier years remains in effect for 2022 unless the employee gives you a 2022 Form W-4. When you receive a 

new Form W-4 from an employee, don't adjust withholding 

for pay periods before the effective date of the new form. If 

an employee gives you a Form W-4 that replaces an existing Form W-4, begin withholding no later than the start of 

the first payroll period ending on or after the 30th day from 

the date when you received the replacement Form W-4. 

For exceptions, see Exemption from federal income tax 

withholding, IRS review of requested Forms W-4, and Invalid Forms W-4, later in this section.

A Form W-4 that makes a change for the next calendar year won't take effect in the current calendar year.

Successor employer. If you’re a successor employer 

(see Successor employer, later in this section), secure 

new Forms W-4 from the transferred employees unless 

the “Alternative Procedure” in section 5 of Revenue Procedure 2004-53 applies. See Revenue Procedure 

2004-53, 2004-34 I.R.B. 320, available at IRS.gov/irb/

2004-34_IRB#RP-2004-53.

Completing Form W-4. The amount of any federal 

income tax withholding must be based on filing status, income (including income from other jobs), deductions, and 

credits. Your employees may not base their withholding 

amounts on a fixed dollar amount or percentage. However, an employee may specify a dollar amount to be 

CAUTION

!

Page 22 Publication 15 (2022)
withheld each pay period in addition to the amount of withholding based on filing status and other information reported on Form W-4.

Employees that are married filing jointly and have spouses that also currently work, or employees that hold more 

than one job at the same time, should account for their 

higher tax rate by completing Step 2 of their 2022 Form 

W-4. Employees also have the option to report on their 

2022 Form W-4 other income they will receive that isn't 

subject to withholding and other deductions they will claim 

in order to increase the accuracy of their federal income 

tax withholding.

See Pub. 505 for more information about completing 

Form W-4. Along with Form W-4, you may wish to order 

Pub. 505 for use by your employees.

Don't accept any withholding or estimated tax payments from your employees in addition to withholding 

based on their Form W-4. If they require additional withholding, they should submit a new Form W-4 and, if necessary, pay estimated tax by filing Form 1040-ES or by 

using EFTPS to make estimated tax payments. Employees who receive tips may provide funds to their employer 

for withholding on tips; see Collecting taxes on tips in section 6.

Exemption from federal income tax withholding.

Generally, an employee may claim exemption from federal income tax withholding because he or she had no income tax liability last year and expects none this year. 

See the Form W-4 instructions for more information. However, the wages are still subject to social security and 

Medicare taxes. See also Invalid Forms W-4, later in this 

section.

A Form W-4 claiming exemption from withholding is effective when it is given to the employer and only for that 

calendar year. To continue to be exempt from withholding, 

an employee must give you a new Form W-4 by February 

15. If the employee doesn't give you a new Form W-4 by 

February 15, begin withholding as if he or she had 

checked the box for Single or Married filing separately in 

Step 1(c) and made no entries in Step 2, Step 3, or Step 4 

of the 2022 Form W-4. If the employee provides a new 

Form W-4 claiming exemption from withholding on February 16 or later, you may apply it to future wages but don't 

refund any taxes withheld while the exempt status wasn’t 

in place.

Withholding income taxes on the wages of nonresident alien employees. In general, you must withhold 

federal income taxes on the wages of nonresident alien 

employees. However, see Pub. 515 for exceptions to this 

general rule. Also see section 3 of Pub. 51 for guidance 

on H-2A visa workers.

Withholding adjustment for nonresident alien employees. Nonresident aliens may not claim the standard 

deduction on their tax return; therefore, employers must 

add an amount to the wages of nonresident alien employees performing services within the United States in order 

to figure the amount of federal income tax to withhold from 

their wages. The amount is added to their wages solely for 

calculating federal income tax withholding. The amount 

isn’t included in any box on the employee's Form W-2 and 

doesn’t increase the income tax liability of the employee. 

The amount also doesn't increase the social security tax 

or Medicare tax liability of the employer or the employee, 

or the FUTA tax liability of the employer. See Withholding 

Adjustment for Nonresident Alien Employees in the Introduction section of Pub. 15-T for the amount to add to their 

wages for the payroll period.

Supplemental wage payment. The adjustment for 

determining the amount of income tax withholding for nonresident alien employees doesn't apply to a supplemental 

wage payment (see section 7) if the 37% mandatory flat 

rate withholding applies or if the 22% optional flat rate 

withholding is being used to calculate income tax withholding on the supplemental wage payment.

Nonresident alien employee's Form W-4. When completing Forms W-4, nonresident aliens are required to:

• Not claim exemption from income tax withholding 

(even if they meet both of the conditions to claim exemption from withholding listed in the Form W-4 instructions);

• Request withholding as if they’re single, regardless of 

their actual filing status;

• Not claim the child tax credit or credit for other dependents in Step 3 of Form W-4 (if the nonresident 

alien is a resident of Canada, Mexico, or South Korea, 

or a student from India, or a business apprentice from 

India, he or she may claim, under certain circumstances (see Pub. 519), the child tax credit or credit for 

other dependents); and

• Write “Nonresident Alien” or “NRA” in the space below 

Step 4(c) of Form W-4.

If you maintain an electronic Form W-4 system, you 

should provide a field for nonresident aliens to enter nonresident alien status instead of writing “Nonresident Alien” 

or “NRA” in the space below Step 4(c) of Form W-4. You 

should instruct nonresident aliens to see Notice 1392, 

Supplemental Form W-4 Instructions for Nonresident Aliens, before completing Form W-4.

Form 8233. If a nonresident alien employee claims a 

tax treaty exemption from withholding, the employee must 

submit Form 8233 with respect to the income exempt under the treaty, instead of Form W-4. For more information, 

see the Instructions for Form 8233 and Pay for Personal 

Services Performed in the Withholding on Specific Income 

section of Pub. 515.

IRS review of requested Forms W-4. When requested 

by the IRS, you must make original Forms W-4 available 

for inspection by an IRS employee. You may also be directed to send certain Forms W-4 to the IRS. You may receive a notice from the IRS requiring you to submit a copy 

of Form W-4 for one or more of your named employees. 

Send the requested copy or copies of Form W-4 to the 

IRS at the address provided and in the manner directed 

by the notice. The IRS may also require you to submit 

copies of Form W-4 to the IRS as directed by a revenue 

procedure or notice published in the Internal Revenue 

Publication 15 (2022) Page 23
Bulletin. When we refer to Form W-4, the same rules apply to Formulario W-4(SP), its Spanish translation.

After submitting a copy of a requested Form W-4 to the 

IRS, continue to withhold federal income tax based on 

that Form W-4 if it is valid (see Invalid Forms W-4, later in 

this section). However, if the IRS later notifies you in writing that the employee isn't entitled to claim exemption 

from withholding or a claimed amount of deductions or 

credits, withhold federal income tax based on the effective 

date, employee's permitted filing status, and withholding 

instructions specified in the IRS notice (commonly referred to as a “lock-in letter”).

Initial lock-in letter. The IRS uses information reported on Form W-2 to identify employees with withholding 

compliance problems. In some cases, if a serious underwithholding problem is found to exist for a particular employee, the IRS may issue a lock-in letter to the employer 

specifying the employee's permitted filing status and providing withholding instructions for the specific employee. 

You’ll also receive a copy for the employee that identifies 

the permitted filing status and provides a description of 

the withholding instructions you’re required to follow and 

the process by which the employee can provide additional 

information to the IRS for purposes of determining the appropriate withholding and/or modifying the specified filing 

status. You must furnish the employee copy to the employee within 10 business days of receipt if the employee 

is employed by you as of the date of the notice. You may 

follow any reasonable business practice to furnish the employee copy to the employee. Begin withholding based on 

the notice on the date specified in the notice.

Implementation of lock-in letter. When you receive 

the notice specifying the permitted filing status and providing withholding instructions, you may not withhold immediately on the basis of the notice. You must begin withholding tax on the basis of the notice for any wages paid after 

the date specified in the notice. The delay between your 

receipt of the notice and the date to begin the withholding 

on the basis of the notice permits the employee time to 

contact the IRS.

Seasonal employees and employees not currently 

performing services. If you receive a notice for an employee who isn't currently performing services for you, 

you’re still required to furnish the employee copy to the 

employee and withhold based on the notice if any of the 

following apply.

• You’re paying wages for the employee's prior services 

and the wages are subject to income tax withholding 

on or after the date specified in the notice.

• You reasonably expect the employee to resume services within 12 months of the date of the notice.

• The employee is on a leave of absence that doesn't 

exceed 12 months or the employee has a right to reemployment after the leave of absence.

Termination and rehire of employees. If you must 

furnish and withhold based on the notice and the employment relationship is terminated after the date of the notice, 

you must continue to withhold based on the notice if you 

continue to pay any wages subject to income tax withholding. You must also withhold based on the notice or modification notice (explained next) if the employee resumes 

the employment relationship with you within 12 months after the termination of the employment relationship.

Modification notice. After issuing the notice specifying the permitted filing status and providing withholding instructions, the IRS may issue a subsequent notice (modification notice) that modifies the original notice. The 

modification notice may change the permitted filing status 

and withholding instructions. You must withhold federal income tax based on the effective date specified in the 

modification notice.

New Form W-4 after IRS notice. After the IRS issues a notice or modification notice, if the employee provides you with a new Form W-4 claiming complete exemption from withholding or a completed Form W-4 that 

results in less withholding than would result under the IRS 

notice or modification notice, disregard the new Form 

W-4. You must withhold based on the notice or modification notice unless the IRS notifies you to withhold based 

on the new Form W-4. If the employee wants to put a new 

Form W-4 into effect that results in less withholding than 

required, the employee must contact the IRS.

If, after you receive an IRS notice or modification notice, your employee gives you a new completed Form W-4 

that results in more withholding than would result under 

the notice or modification notice, you must withhold tax 

based on the new Form W-4. Otherwise, disregard any 

subsequent Forms W-4 provided by the employee and 

withhold based on the IRS notice or modification notice.

If, in a year before 2020, you received a lock-in 

letter for an employee, then for 2022 you should 

continue to follow the instructions in the lock-in 

letter. You will use the withholding methods described in 

Pub. 15-T for an employee with a Form W-4 from 2019 or 

earlier, or you may use the optional computational bridge 

to treat 2019 or earlier Forms W-4 as if they were 2020 or 

later Forms W-4 for purposes of figuring federal income 

tax withholding. See How To Treat 2019 and Earlier 

Forms W-4 as if They Were 2020 or Later Forms W-4 in 

the Introduction section of Pub. 15-T. You should continue 

following the instructions in the pre-2020 lock-in letter until 

you receive a letter releasing your employee from the 

lock-in procedures, you receive a modification notice, or 

your employee gives you a new Form W-4 that results in 

more withholding than would result under the notice.

For additional information about employer withholding 

compliance, see IRS.gov/WHC.

Substitute Forms W-4. You’re encouraged to have your 

employees use the official version of Form W-4. You may 

use a substitute version of Form W-4 to meet your business needs. However, your substitute Form W-4 must 

contain language that is identical to the official Form W-4 

and your form must meet all current IRS rules for substitute forms. At the time you provide your substitute form to 

the employee, you must provide him or her with all tables, 

instructions, and worksheets from the current Form W-4.

CAUTION

!

Page 24 Publication 15 (2022)
You can't accept substitute Forms W-4 developed by 

employees. An employee who submits an employee-developed substitute Form W-4 after October 10, 2007, will 

be treated as failing to furnish a Form W-4. However, continue to honor any valid employee-developed Forms W-4 

you accepted before October 11, 2007.

Invalid Forms W-4. Any unauthorized change or addition to Form W-4 makes it invalid. This includes taking out 

any language by which the employee certifies the form is 

correct. A Form W-4 is also invalid if, by the date an employee gives it to you, he or she clearly indicates it is false. 

An employee who submits a false Form W-4 may be subject to a $500 penalty. You may treat a Form W-4 as invalid if the employee wrote “exempt” below Step 4(c) and 

checked the box in Step 2(c) or entered numbers for 

Steps 3 and 4.

When you get an invalid Form W-4, don't use it to figure 

federal income tax withholding. Tell the employee it is invalid and ask for another one. If the employee doesn't give 

you a valid one, and you have an earlier Form W-4 for this 

employee that is valid, withhold as you did before. If you 

don't have an earlier Form W-4 that is valid, withhold tax 

as if the employee had checked the box for Single or Married filing separately in Step 1(c) and made no entries in 

Step 2, Step 3, or Step 4 of the 2022 Form W-4. However, 

an employee who was paid wages in 2019 who never 

submitted a valid Form W-4 and submits an invalid Form 

W-4 in 2022 should continue to be treated as single and 

claiming zero allowances on a 2019 Form W-4. If you use 

the optional computational bridge, described earlier under 

Redesigned Form W-4, you may treat this employee as if 

they had checked the box for Single or Married filing separately in Step 1(c), and made no entries in Step 2 and 

Step 3, an entry of $8,600 in Step 4(a), and an entry of 

zero in Step 4(b) of the 2022 Form W-4.

Amounts exempt from levy on wages, salary, and 

other income. If you receive a Notice of Levy on Wages, 

Salary, and Other Income (Forms 668-W(ACS), 668-W(c)

(DO), or 668-W(ICS)), you must withhold amounts as described in the instructions for these forms. Pub. 1494 has 

tables to figure the amount exempt from levy. If a levy issued in a prior year is still in effect and the taxpayer submits a new Statement of Exemptions and Filing Status, 

use the current year Pub. 1494 to figure the exempt 

amount.

Social Security and Medicare Taxes

The Federal Insurance Contributions Act (FICA) provides 

for a federal system of old-age, survivors, disability, and 

hospital insurance. The old-age, survivors, and disability 

insurance part is financed by the social security tax. The 

hospital insurance part is financed by the Medicare tax. 

Each of these taxes is reported separately.

Generally, you’re required to withhold social security 

and Medicare taxes from your employees' wages and pay 

the employer share of these taxes. Certain types of wages 

and compensation aren't subject to social security and 

Medicare taxes. See section 5 and section 15 for details. 

Generally, employee wages are subject to social security 

and Medicare taxes regardless of the employee's age or 

whether he or she is receiving social security benefits. If 

the employee reported tips, see section 6.

Tax rates and the social security wage base limit. 

Social security and Medicare taxes have different rates 

and only the social security tax has a wage base limit. The 

wage base limit is the maximum wage subject to the tax 

for the year. Determine the amount of withholding for social security and Medicare taxes by multiplying each payment by the employee tax rate.

For 2022, the social security tax rate is 6.2% (amount 

withheld) each for the employer and employee (12.4% total). The social security wage base limit is $147,000. The 

tax rate for Medicare is 1.45% (amount withheld) each for 

the employee and employer (2.9% total). There is no 

wage base limit for Medicare tax; all covered wages are 

subject to Medicare tax.

Any qualified sick leave wages and qualified family leave wages paid in 2022 for leave taken under 

the FFCRA, as amended and extended by the 

COVID-related Tax Relief Act of 2020, or taken under the 

ARP, are taxed based on when the leave was taken. 

Qualified sick leave wages and qualified family leave wages for leave taken after March 31, 2020, and before April 

1, 2021, aren't subject to the employer share of social security tax; therefore, the tax rate on these wages is 6.2%. 

Qualified sick leave wages and qualified family leave wages for leave taken after March 31, 2021, and before October 1, 2021, are subject to both the employer share 

(6.2%) and employee share (6.2%) of social security tax 

(12.4% total).

Additional Medicare Tax withholding. In addition to 

withholding Medicare tax at 1.45%, you must withhold a 

0.9% Additional Medicare Tax from wages you pay to an 

employee in excess of $200,000 in a calendar year. 

You’re 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. Additional 

Medicare Tax is only imposed on the employee. There is 

no employer share of Additional Medicare Tax. 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.

For more information on what wages are subject to 

Medicare tax, see section 15. For more information on Additional Medicare Tax, go to IRS.gov/ADMT.

Successor employer. When corporate acquisitions 

meet certain requirements, wages paid by the predecessor are treated as if paid by the successor for purposes of 

applying the social security wage base and for applying 

the Additional Medicare Tax withholding threshold (that is, 

$200,000 in a calendar year). You should determine 

whether or not you should file Schedule D (Form 941), Report of Discrepancies Caused by Acquisitions, Statutory 

Mergers, or Consolidations, by reviewing the Instructions 

for Schedule D (Form 941). See Regulations section 

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Publication 15 (2022) Page 25
31.3121(a)(1)-1(b) for more information. Also see Revenue Procedure 2004-53, 2004-34 I.R.B. 320, available at 

IRS.gov/irb/2004-34_IRB#RP-2004-53.

Example. Early in 2022, you bought all of the assets of 

a plumbing business from Mr. Martin. Mr. Brown, who had 

been employed by Mr. Martin and received $2,000 in wages before the date of purchase, continued to work for 

you. The wages you paid to Mr. Brown are subject to social security taxes on the first $145,000 ($147,000 minus 

$2,000). Medicare tax is due on all of the wages you pay 

him during the calendar year. You should include the 

$2,000 Mr. Brown received while employed by Mr. Martin 

in determining whether Mr. Brown's wages exceed the 

$200,000 for Additional Medicare Tax withholding threshold.

Motion picture project employers. All wages paid by a 

motion picture project employer to a motion picture project 

worker during a calendar year are subject to a single social security tax wage base ($147,000 for 2022) and a single FUTA tax wage base ($7,000 for 2022) regardless of 

the worker's status as a common law employee of multiple 

clients of the motion picture project employer. For more 

information, including the definition of a motion picture 

project employer and motion picture project worker, see 

section 3512.

Withholding social security and Medicare taxes on 

nonresident alien employees. In general, if you pay 

wages to nonresident alien employees, you must withhold 

social security and Medicare taxes as you would for a 

U.S. citizen or resident alien. However, see Pub. 515 for 

exceptions to this general rule.

International social security agreements. The United 

States has social security agreements, also known as totalization agreements, with many countries that eliminate 

dual social security coverage and taxation. Compensation 

subject to social security and Medicare taxes may be exempt under one of these agreements. You can get more 

information and a list of agreement countries from the 

SSA at SSA.gov/international. Also see Pub. 519, U.S. 

Tax Guide for Aliens.

Religious exemption. An exemption from social security and Medicare taxes is available to members of a recognized religious sect opposed to insurance. This exemption 

is available only if both the employee and the employer 

are members of the sect. For more information, see Pub. 

517.

Foreign persons treated as American employers.

Under section 3121(z), a foreign person who meets both 

of the following conditions is generally treated as an 

American employer for purposes of paying FICA taxes on 

wages paid to an employee who is a U.S. citizen or resident.

1. The foreign person is a member of a domestically 

controlled group of entities.

2. The employee of the foreign person performs services in connection with a contract between the U.S. 

Government (or an instrumentality of the U.S. Government) and any member of the domestically controlled 

group of entities. Ownership of more than 50% constitutes control.

Part-Time Workers

Part-time workers and workers hired for short periods of 

time are treated the same as full-time employees for federal income tax withholding and social security, Medicare, 

and FUTA tax purposes.

Generally, it doesn't matter whether the part-time 

worker or worker hired for a short period of time has another job or has the maximum amount of social security 

tax withheld by another employer. See Successor employer, earlier, for an exception to this rule.

Income tax withholding may be figured the same way 

as for full-time workers or it may be figured by the 

part-year employment method explained in section 6 of 

Pub. 15-T.

10. Required Notice to 

Employees About the Earned 

Income Credit (EIC)

You must notify employees who have no federal income 

tax withheld that they may be able to claim a tax refund 

because of the EIC. Although you don't have to notify employees who claim exemption from withholding on Form 

W-4 about the EIC, you’re encouraged to notify any employees whose wages for 2021 were less than $51,464 

($57,414 if married filing jointly) that they may be eligible 

to claim the credit for 2021. This is because eligible employees may get a refund of the amount of the EIC that is 

more than the tax they owe.

You’ll meet this notification requirement if you issue the 

employee Form W-2 with the EIC notice on the back of 

Copy B, or a substitute Form W-2 with the same statement. You’ll also meet the requirement by providing Notice 797, Possible Federal Tax Refund Due to the Earned 

Income Credit (EIC), or your own statement that contains 

the same wording.

If a substitute for Form W-2 is given to the employee on 

time but doesn't have the required statement, you must 

notify the employee within 1 week of the date the substitute for Form W-2 is given. If Form W-2 is required but isn't 

given on time, you must give the employee Notice 797 or 

your written statement by the date Form W-2 is required to 

be given. If Form W-2 isn't required, you must notify the 

employee by February 7, 2022.

Page 26 Publication 15 (2022)
11. Depositing Taxes

If an employer is eligible to claim a credit for qualified sick and family leave wages and/or the COBRA premium assistance credit during 2022, the 

employer can reduce their deposits by the amount of their 

anticipated credits. You may reduce your deposits of federal employment taxes in anticipation of the COBRA premium assistance credit with regard to a period of coverage as of the date you are entitled to the credit. Employers 

won't be subject to an FTD penalty for properly reducing 

their deposits if certain conditions are met. For more information on reducing deposits, see Notice 2020-22, 

2020-17 I.R.B. 664, available at IRS.gov/irb/

2020-17_IRB#NOT-2020-22, Notice 2021-24, 2021-18 

I.R.B. 1122, available at IRS.gov/irb/

2021-18_IRB#NOT-2021-24, and the Instructions for 

Form 941 or the Instructions for Form 944. For more information about the credit for qualified sick and family leave 

wages, go to IRS.gov/PLC. For more information on COBRA premium assistance payments and the credit, see 

Notice 2021-31, 2021-23 I.R.B. 1173, available at 

IRS.gov/irb/2021-23_IRB#NOT-2021-31, and Notice 

2021-46, 2021-33 I.R.B. 303, available at IRS.gov/irb/

2021-33_IRB#NOT-2021-46.

Generally, you must deposit federal income tax withheld and both the employer and employee social security 

and Medicare taxes. You must use EFT to make all federal tax deposits. See How To Deposit, later in this section, for information on electronic deposit requirements.

Payment with return. You may make a payment with a 

timely filed Form 941 or Form 944 instead of depositing, 

without incurring a penalty, if one of the following applies.

• You’re a monthly schedule depositor (defined later) 

and make a payment in accordance with the Accuracy 

of Deposits Rule, discussed later in this section. This 

payment may be $2,500 or more.

• Your Form 941 total tax liability (Form 941, line 12) for 

either the current quarter or the prior quarter is less 

than $2,500, and you didn't incur a $100,000 next-day 

deposit obligation during the current quarter. If you 

aren't sure your total tax liability for the current quarter 

will be less than $2,500 (and your liability for the prior 

quarter wasn't less than $2,500), make deposits using 

the semiweekly or monthly rules so you won't be subject to an FTD penalty.

• Your Form 944 net tax liability for the year (Form 944, 

line 9) is less than $2,500.

• Your Form 944 net tax liability for the year (Form 944, 

line 9) is $2,500 or more and you already deposited 

the taxes you owed for the first, second, and third 

quarters of the year; your net tax for the fourth quarter 

is less than $2,500; and you're paying, in full, the tax 

you owe for the fourth quarter with a timely filed return.

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Separate deposit requirements for nonpayroll (Form 

945) tax liabilities. Separate deposits are required for 

nonpayroll and payroll income tax withholding. Don't combine deposits for Forms 941 (or Form 944) and Form 945 

tax liabilities. Generally, the deposit rules for nonpayroll liabilities are the same as discussed next, except the rules 

apply to an annual rather than a quarterly return period. If 

the total amount of tax for the year reported on Form 945 

is less than $2,500, you're not required to make deposits 

during the year. See the separate Instructions for Form 

945 for more information.

When To Deposit

There are two deposit schedules—monthly and semiweekly—for determining when you deposit social security, 

Medicare, and withheld federal income taxes. These 

schedules tell you when a deposit is due after a tax liability 

arises. Your tax liability is based on the dates payments 

were made or wages were paid. For taxable noncash 

fringe benefits, see When taxable fringe benefits are treated as paid in section 5. Before the beginning of each calendar year, you must determine which of the two deposit 

schedules you’re required to use. The deposit schedule 

you must use is based on the total tax liability you reported on Form 941, line 12, or Form 944, line 9, during a 

lookback period, discussed next. Your deposit schedule 

isn't determined by how often you pay your employees or 

make deposits. See special rules for Forms 944 and 945, 

later. Also see Application of Monthly and Semiweekly 

Schedules, later in this section.

These rules don't apply to FUTA tax. See section 

14 for information on depositing FUTA tax.

Lookback period. If you’re a Form 941 filer, your deposit schedule for a calendar year is determined from the 

total taxes reported on Forms 941, line 12, in a 4-quarter 

lookback period. The lookback period begins July 1 and 

ends June 30 as shown next in Table 1. If you reported 

$50,000 or less of taxes for the lookback period, you’re a 

monthly schedule depositor; if you reported more than 

$50,000, you’re a semiweekly schedule depositor.

Table 1. Lookback Period for Calendar Year 

2022

July 1, 2020, Oct. 1, 2020, Jan. 1, 2021, Apr. 1, 2021,

through through through through

Sept. 30, 2020 Dec. 31, 2020 Mar. 31, 2021 June 30, 2021

The lookback period for a 2022 Form 941 filer 

who filed Form 944 in either 2020 or 2021 is calendar year 2020.

If you’re a Form 944 filer for the current year or either of 

the preceding 2 years, your deposit schedule for a calendar year is determined from the total taxes reported during 

the second preceding calendar year (either on your Form 

941 for all 4 quarters of that year or your Form 944 for that 

year). The lookback period for 2022 for a Form 944 filer is 

calendar year 2020. If you reported $50,000 or less of 

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Publication 15 (2022) Page 27
taxes for the lookback period, you’re a monthly schedule 

depositor; if you reported more than $50,000, you’re a 

semiweekly schedule depositor.

If you’re a Form 945 filer, your deposit schedule for a 

calendar year is determined from the total taxes reported 

on line 3 of your Form 945 for the second preceding calendar year. The lookback period for 2022 for a Form 945 

filer is calendar year 2020.

Your total tax liability for the lookback period is 

determined based on the amount of taxes you reported on Form 941, line 12, or Form 944, line 9. 

Your total liability isn’t reduced by the deferred amount of 

the employer or employee share of social security tax, the 

refundable portion of the credit for qualified sick and family leave wages, the refundable portion of the employee 

retention credit, or the refundable portion of the COBRA 

premium assistance credit.

Adjustments and the lookback rule. Adjustments 

made on Form 941-X, Form 944-X, and Form 945-X don't 

affect the amount of tax liability for previous periods for 

purposes of the lookback rule.

Example. An employer originally reported a tax liability of $45,000 for the lookback period. The employer discovered, during January 2022, that the tax reported for 

one of the lookback period quarters was understated by 

$10,000 and corrected this error by filing Form 941-X. 

This employer is a monthly schedule depositor for 2022 

because the lookback period tax liabilities are based on 

the amounts originally reported, and they were $50,000 or 

less. The $10,000 adjustment is also not treated as part of 

the 2022 taxes.

Deposit period. The term “deposit period” refers to the 

period during which tax liabilities are accumulated for 

each required deposit due date. For monthly schedule depositors, the deposit period is a calendar month. The deposit periods for semiweekly schedule depositors are 

Wednesday through Friday and Saturday through Tuesday.

If you're an agent with an approved Form 2678, 

the deposit rules apply to you based on the total 

employment taxes accumulated by you for your 

own employees and on behalf of all employers for whom 

you're authorized to act. For more information on an agent 

with an approved Form 2678, see Revenue Procedure 

2013-39, 2013-52 I.R.B. 830, available at IRS.gov/irb/

2013-52_IRB#RP-2013-39.

Monthly Deposit Schedule

You’re a monthly schedule depositor for a calendar year if 

the total taxes on Form 941, line 12, for the 4 quarters in 

your lookback period were $50,000 or less. Under the 

monthly deposit schedule, deposit employment taxes on 

payments made during a month by the 15th day of the following month. See also Deposits Due on Business Days 

Only and the $100,000 Next-Day Deposit Rule, later in 

TIP TIP

this section. Monthly schedule depositors shouldn't file 

Form 941 or Form 944 on a monthly basis.

New employers. Your tax liability for any quarter in the 

lookback period before you started or acquired your business is considered to be zero. Therefore, you’re a monthly 

schedule depositor for the first calendar year of your business. However, see the $100,000 Next-Day Deposit Rule, 

later in this section.

Semiweekly Deposit Schedule

You’re a semiweekly schedule depositor for a calendar 

year if the total taxes on Form 941, line 12, during your 

lookback period were more than $50,000. Under the semiweekly deposit schedule, deposit employment taxes for 

payments made on Wednesday, Thursday, and/or Friday 

by the following Wednesday. Deposit taxes for payments 

made on Saturday, Sunday, Monday, and/or Tuesday by 

the following Friday. See also Deposits Due on Business 

Days Only, later in this section.

Semiweekly schedule depositors must complete 

Schedule B (Form 941), Report of Tax Liability for 

Semiweekly Schedule Depositors, and submit it 

with Form 941. If you file Form 944 or Form 945 and are a 

semiweekly schedule depositor, complete Form 945-A, 

Annual Record of Federal Tax Liability, and submit it with 

your return (instead of Schedule B).

Table 2. Semiweekly Deposit Schedule

IF the payday falls on a... THEN deposit taxes by the 

following...

Wednesday, Thursday, and/or 

Friday

Wednesday.

Saturday, Sunday, Monday, 

and/or Tuesday

Friday.

Semiweekly deposit period spanning two quarters 

(Form 941 filers). If you have more than one pay date 

during a semiweekly period and the pay dates fall in different calendar quarters, you’ll need to make separate deposits for the separate liabilities.

Example. If you have a pay date on Thursday, March 

31, 2022 (first quarter), and another pay date on Friday, 

April 1, 2022 (second quarter), two separate deposits 

would be required even though the pay dates fall within 

the same semiweekly period. Both deposits would be due 

Wednesday, April 6, 2022.

Semiweekly deposit period spanning two return periods (Form 944 or Form 945 filers). The period covered 

by a return is the return period. The return period for annual Forms 944 and 945 is a calendar year. If you have 

more than one pay date during a semiweekly period and 

the pay dates fall in different return periods, you'll need to 

make separate deposits for the separate liabilities. For example, if a return period ends on Thursday, taxes accumulated on Wednesday and Thursday are subject to one 

CAUTION

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Page 28 Publication 15 (2022)
deposit obligation, and taxes accumulated on Friday are 

subject to a separate obligation. Separate deposits are required because two different return periods are affected.

Summary of Steps to Determine Your Deposit Schedule

1. Identify your lookback period (see Lookback period, earlier in 

this section).

2. Add the total taxes you reported on Form 941, line 12, during 

the lookback period.

3. Determine if you’re a monthly or semiweekly schedule 

depositor:

IF the total taxes you 

reported in the lookback 

period were...

THEN you’re a...

$50,000 or less monthly schedule depositor.

more than $50,000 semiweekly schedule 

depositor.

Example of Monthly and Semiweekly 

Schedules

Rose Co. reported Form 941 taxes as follows:

2021 Lookback Period 2022 Lookback Period

3rd Quarter 2019 $12,000 3rd Quarter 2020 $12,000

4th Quarter 2019 12,000 4th Quarter 2020 12,000

1st Quarter 2020 12,000 1st Quarter 2021 12,000

2nd Quarter 2020 12,000 2nd Quarter 2021 15,000

 $48,000 $51,000

Rose Co. is a monthly schedule depositor for 2021 because its tax liability for the 4 quarters in its lookback period (third quarter 2019 through second quarter 2020) 

wasn't more than $50,000. However, for 2022, Rose Co. 

will be a semiweekly schedule depositor because the total 

taxes exceeded $50,000 for the 4 quarters in its lookback 

period (third quarter 2020 through second quarter 2021).

Deposits Due on Business Days Only

If a deposit is required to be made on a day that isn't a 

business day, the deposit is considered timely if it is made 

by the close of the next business day. A business day is 

any day other than a Saturday, Sunday, or legal holiday. 

For example, if a deposit is required to be made on a Friday and Friday is a legal holiday, the deposit will be considered timely if it is made by the following Monday (if that 

Monday is a business day).

Semiweekly schedule depositors have at least 3 

business days following the close of the semiweekly period to make a deposit. If any of the 3 weekdays after the 

end of a semiweekly period is a legal holiday, you’ll have 

an additional day for each day that is a legal holiday to 

make the required deposit. For example, if a semiweekly 

schedule depositor accumulated taxes for payments 

made on Friday and the following Monday is a legal holiday, the deposit normally due on Wednesday may be 

made on Thursday (this allows 3 business days to make 

the deposit).

Legal holiday. The term “legal holiday” means any legal 

holiday in the District of Columbia. For purposes of the deposit rules, the term “legal holiday” doesn't include other 

statewide legal holidays. Legal holidays for 2022 are listed 

next.

• December 31, 2021—New Year's Day 2022 (observed)

• January 17—Birthday of Martin Luther King, Jr.

• February 21—Washington's Birthday

• April 15—District of Columbia Emancipation Day (observed)

• May 30—Memorial Day

• June 20—Juneteenth National Independence Day 

(observed)

• July 4—Independence Day

• September 5—Labor Day

• October 10—Columbus Day

• November 11—Veterans Day

• November 24—Thanksgiving Day

• December 26—Christmas Day (observed)

Application of Monthly and Semiweekly 

Schedules

The terms “monthly schedule depositor” and “semiweekly 

schedule depositor” don't refer to how often your business 

pays its employees or even how often you’re required to 

make deposits. The terms identify which set of deposit 

rules you must follow when an employment tax liability arises. The deposit rules are based on the dates when wages are paid (cash basis), not on when tax liabilities are 

accrued for accounting purposes.

Monthly schedule example. Spruce Co. is a monthly 

schedule depositor with seasonal employees. It paid wages each Friday during May but didn't pay any wages during June. Under the monthly deposit schedule, Spruce 

Co. must deposit the combined tax liabilities for the May 

paydays by June 15. Spruce Co. doesn't have a deposit 

requirement for June (due by July 15) because no wages 

were paid and, therefore, it didn't have a tax liability for 

June.

Semiweekly schedule example. Green, Inc., is a semiweekly schedule depositor and pays wages once each 

month on the last Friday of the month. Although Green, 

Inc., has a semiweekly deposit schedule, it will deposit 

just once a month because it pays wages only once a 

month. The deposit, however, will be made under the 

semiweekly deposit schedule as follows: Green, Inc.'s tax 

liability for the April 29, 2022 (Friday), payday must be deposited by May 4, 2022 (Wednesday). Under the semiweekly deposit schedule, liabilities for wages paid on 

Wednesday through Friday must be deposited by the following Wednesday.

Publication 15 (2022) Page 29
$100,000 Next-Day Deposit Rule

If you accumulate $100,000 or more in taxes on any day 

during a monthly or semiweekly deposit period (see Deposit period, earlier in this section), you must deposit the 

tax by the next business day, whether you’re a monthly or 

semiweekly schedule depositor.

For purposes of the $100,000 rule, don't continue accumulating a tax liability after the end of a deposit period. 

For example, if a semiweekly schedule depositor has accumulated a liability of $95,000 on a Tuesday (of a Saturday-through-Tuesday deposit period) and accumulated a 

$10,000 liability on Wednesday, the $100,000 next-day 

deposit rule doesn't apply because the $10,000 is accumulated in the next deposit period. Thus, $95,000 must be 

deposited by Friday and $10,000 must be deposited by 

the following Wednesday.

However, once you accumulate at least $100,000 in a 

deposit period, stop accumulating at the end of that day 

and begin to accumulate anew on the next day. For example, Fir Co. is a semiweekly schedule depositor. On Monday, Fir Co. accumulates taxes of $110,000 and must deposit this amount on Tuesday, the next business day. On 

Tuesday, Fir Co. accumulates additional taxes of 

$30,000. Because the $30,000 isn't added to the previous 

$110,000 and is less than $100,000, Fir Co. must deposit 

the $30,000 by Friday (following the semiweekly deposit 

schedule).

If you’re a monthly schedule depositor and accumulate a $100,000 tax liability on any day during 

the deposit period, you become a semiweekly 

schedule depositor on the next day and remain so for at 

least the rest of the calendar year and for the following 

calendar year.

Example. Elm, Inc., started its business on May 2, 

2022. On Wednesday, May 4, it paid wages for the first 

time and accumulated a tax liability of $40,000. On Friday, 

May 6, Elm, Inc., paid wages and accumulated a liability 

of $60,000, bringing its total accumulated tax liability to 

$100,000. Because this was the first year of its business, 

the tax liability for its lookback period is considered to be 

zero, and it would be a monthly schedule depositor based 

on the lookback rules. However, since Elm, Inc., accumulated a $100,000 liability on May 6, it became a semiweekly schedule depositor on May 7. It will be a semiweekly schedule depositor for the remainder of 2022 and 

for 2023. Elm, Inc., is required to deposit the $100,000 by 

Monday, May 9, the next business day.

The $100,000 tax liability threshold requiring a 

next-day deposit is determined before you consider any reduction of your liability for nonrefundable credits. For more information, see frequently asked 

question 17 at IRS.gov/ETD.

CAUTION

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Accuracy of Deposits Rule

You’re required to deposit 100% of your tax liability on or 

before the deposit due date. However, penalties won't be 

applied for depositing less than 100% if both of the following conditions are met.

• Any deposit shortfall doesn't exceed the greater of 

$100 or 2% of the amount of taxes otherwise required 

to be deposited.

• The deposit shortfall is paid or deposited by the shortfall makeup date as described next.

Makeup Date for Deposit Shortfall: 

1. Monthly schedule depositor. Deposit the shortfall 

or pay it with your return by the due date of your return 

for the return period in which the shortfall occurred. 

You may pay the shortfall with your return even if the 

amount is $2,500 or more.

2. Semiweekly schedule depositor. Deposit by the 

earlier of:

a. The first Wednesday or Friday (whichever comes 

first) that falls on or after the 15th day of the month 

following the month in which the shortfall occurred, or

b. The due date of your return (for the return period 

of the tax liability).

For example, if a semiweekly schedule depositor has a 

deposit shortfall during May 2022, the shortfall makeup 

date is June 15, 2022 (Wednesday). However, if the 

shortfall occurred on the required April 1, 2022 (Friday), 

deposit due date for the March 29, 2022 (Tuesday), pay 

date, the return due date for the March 29 pay date (May 

2, 2022) would come before the May 18, 2022 (Wednesday), shortfall makeup date. In this case, the shortfall must 

be deposited by May 2, 2022.

How To Deposit

You must deposit employment taxes, including Form 945 

taxes, by EFT. See Payment with return, earlier in this 

section, for exceptions explaining when taxes may be 

paid with the tax return instead of being deposited.

Electronic deposit requirement. You must use EFT to 

make all federal tax deposits. Generally, an EFT is made 

using EFTPS. If you don't 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. EFTPS is a free service provided by 

the Department of the Treasury. To get more information 

about EFTPS or to enroll in EFTPS, visit EFTPS.gov, or 

call 800-555-4477 or 800-733-4829 (TDD). Additional information about EFTPS is also available in Pub. 966.

When you receive your EIN. If you’re a new employer that indicated a federal tax obligation when requesting an EIN, you’ll be pre-enrolled in EFTPS. You’ll 

receive information about Express Enrollment in your 

Page 30 Publication 15 (2022)
Employer Identification Number (EIN) Package and an additional mailing containing your EFTPS personal identification number (PIN) and instructions for activating your 

PIN. Call the toll-free number located in your “How to Activate Your Enrollment” brochure to activate your enrollment and begin making your payroll tax deposits. If you 

outsource any of your payroll and related tax duties to a 

third-party payer, such as a payroll service provider (PSP) 

or reporting agent, be sure to tell them about your EFTPS 

enrollment.

Deposit record. For your records, an EFT Trace 

Number will be provided with each successful payment. 

The number can be used as a receipt or to trace the payment.

Depositing on time. For deposits made by EFTPS to 

be on time, you must submit the deposit by 8 p.m. Eastern 

time the day before the date the deposit is due. If you use 

a third party to make a deposit on your behalf, they may 

have different cutoff times.

Same-day wire payment option. If you fail to submit 

a deposit transaction on EFTPS by 8 p.m. Eastern time 

the day before the date a deposit is due, you can still 

make your deposit on time by using the Federal Tax Collection Service (FTCS) to make a same-day wire payment. To use the same-day wire payment method, you’ll 

need to make arrangements with your financial institution 

ahead of time. Please check with your financial institution 

regarding availability, deadlines, and costs. Your financial 

institution may charge you a fee for payments made this 

way. To learn more about the information you’ll need to 

give to your financial institution to make a same-day wire 

payment, go to IRS.gov/SameDayWire.

How to claim credit for overpayments. If you deposited more than the right amount of taxes for a quarter, you 

can choose on Form 941 for that quarter (or on Form 944 

for that year) to have the overpayment refunded or applied 

as a credit to your next return. Don't ask EFTPS to request 

a refund from the IRS for you.

Deposit Penalties

Although the deposit penalties information provided next refers specifically to Form 941, these 

rules also apply to Form 945 and Form 944. The 

penalties won't apply if the employer qualifies for the exceptions to the deposit requirements discussed under 

Payment with return, earlier in this section).

Penalties may apply if you don't make required deposits 

on time or if you make deposits for less than the required 

amount. The penalties don't apply if any failure to make a 

proper and timely deposit was due to reasonable cause 

and not to willful neglect. If you receive a penalty notice, 

you can provide an explanation of why you believe reasonable cause exists.

If you timely filed your employment tax return, the IRS 

may also waive deposit penalties if you inadvertently 

failed to deposit and it was the first quarter that you were 

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required to deposit any employment tax, or if you inadvertently failed to deposit the first time after your deposit frequency changed. You must also meet the net worth and 

size limitations applicable to awards of administrative and 

litigation costs under section 7430; for individuals, this 

means that your net worth can't exceed $2 million, and for 

businesses, your net worth can't exceed $7 million and 

you also can't have more than 500 employees.

The IRS may also waive the deposit penalty the first 

time you're required to make a deposit if you inadvertently 

send the payment to the IRS rather than deposit it by EFT.

For amounts not properly or timely deposited, the penalty rates are as follows.

Penalty Charged for...

2% Deposits made 1 to 5 days late.

5% Deposits made 6 to 15 days late.

10% Deposits made 16 or more days late, but before 10 days from 

the date of the first notice the IRS sent asking for the tax due.

10% Amounts that should have been deposited, but instead were 

paid directly to the IRS, or paid with your tax return. But see 

Payment with return, earlier in this section, for exceptions.

15% Amounts still unpaid more than 10 days after the date of the 

first notice the IRS sent asking for the tax due or the day on 

which you received notice and demand for immediate 

payment, whichever is earlier.

Late deposit penalty amounts are determined using 

calendar days, starting from the due date of the liability.

Special rule for former Form 944 filers. If you filed 

Form 944 for the prior year and file Forms 941 for the current year, the FTD penalty won't apply to a late deposit of 

employment taxes for January of the current year if the 

taxes are deposited in full by March 15 of the current year.

Order in which deposits are applied. Deposits are 

generally applied to the most recent tax liability within the 

quarter. If you receive an FTD penalty notice, you may 

designate how your deposits are to be applied in order to 

minimize the amount of the penalty if you do so within 90 

days of the date of the notice. Follow the instructions on 

the penalty notice you receive. For more information on 

designating deposits, see Revenue Procedure 2001-58. 

You can find Revenue Procedure 2001-58 on page 579 of 

Internal Revenue Bulletin 2001-50 at IRS.gov/pub/irs-irbs/

irb01-50.pdf.

Example. Cedar, Inc., is required to make a deposit 

of $1,000 on June 15 and $1,500 on July 15. It doesn't 

make the deposit on June 15. On July 15, Cedar, Inc., deposits $2,000. Under the deposits rule, which applies deposits to the most recent tax liability, $1,500 of the deposit 

is applied to the July 15 deposit and the remaining $500 is 

applied to the June deposit. Accordingly, $500 of the June 

15 liability remains undeposited. The penalty on this underdeposit will apply as explained earlier.

Trust fund recovery penalty. If federal income, social 

security, or Medicare taxes that must be withheld (that is, 

trust fund taxes) aren't withheld or aren't deposited or paid 

Publication 15 (2022) Page 31
to the U.S. Treasury, the trust fund recovery penalty may 

apply. The penalty is 100% of the unpaid trust fund tax. If 

these unpaid taxes can't be immediately collected from 

the employer or business, the trust fund recovery penalty 

may be imposed on all persons who are determined by 

the IRS to be responsible for collecting, accounting for, or 

paying over these taxes, and who acted willfully in not doing so. The trust fund recovery penalty won't apply to any 

amount of trust fund taxes an employer holds back in anticipation of any credits they are entitled to. It also won't 

apply to applicable taxes properly deferred under section 

2302 of the CARES Act or applicable taxes deferred under Notice 2020-65 and Notice 2021-11 if paid by the due 

date.

A responsible person can be an officer or employee 

of a corporation, a partner or employee of a partnership, 

an accountant, a volunteer director/trustee, or an employee of a sole proprietorship, or any other person or entity that is responsible for collecting, accounting for, or 

paying over trust fund taxes. A responsible person may 

also include one who signs checks for the business or otherwise has authority to cause the spending of business 

funds.

Willfully means voluntarily, consciously, and intentionally. A responsible person acts willfully if the person 

knows the required actions of collecting, accounting for, or 

paying over trust fund taxes aren't taking place, or recklessly disregards obvious and known risks to the government's right to receive trust fund taxes.

Separate accounting when deposits aren't made or 

withheld taxes aren't paid. Separate accounting may 

be required if you don't pay over withheld employee social 

security, Medicare, or income taxes; deposit required 

taxes; make required payments; or file tax returns. In this 

case, you would receive written notice from the IRS requiring you to deposit taxes into a special trust account for 

the U.S. Government.

You may be charged with criminal penalties if you 

don't comply with the special bank deposit requirements for the special trust account for the 

U.S. Government.

“Averaged” FTD penalty. The IRS may assess an 

"averaged" FTD penalty of 2% to 10% if you’re a monthly 

schedule depositor and didn't properly complete Form 

941, line 16, when your tax liability shown on Form 941, 

line 12, equaled or exceeded $2,500.

The IRS may also assess an "averaged" FTD penalty of 

2% to 10% if you’re a semiweekly schedule depositor and 

your tax liability shown on Form 941, line 12, equaled or 

exceeded $2,500 and you:

• Completed Form 941, line 16, instead of Schedule B 

(Form 941);

• Failed to attach a properly completed Schedule B 

(Form 941); or

• Improperly completed Schedule B (Form 941) by, for 

example, entering tax deposits instead of tax liabilities 

in the numbered spaces.

CAUTION

!

The FTD penalty is figured by distributing your total tax 

liability shown on Form 941, line 12, equally throughout 

the tax period. Then we apply your deposits and payments to the averaged liabilities in the date order we received your deposits. We figure the penalty on any tax not 

deposited, deposited late, or not deposited in the correct 

amounts. Your deposits and payments may not be counted as timely because the actual dates of your tax liabilities can't be accurately determined.

You can avoid an "averaged" FTD penalty by reviewing 

your return before you file it. Follow these steps before 

submitting your Form 941.

• If you’re a monthly schedule depositor, report your tax 

liabilities (not your deposits) in the monthly entry 

spaces on Form 941, line 16.

• If you’re a semiweekly schedule depositor, report your 

tax liabilities (not your deposits) on Schedule B (Form 

941) in the lines that represent the dates your employees were paid.

• Verify that your total liability shown on Form 941, 

line 16, or the bottom of Schedule B (Form 941) 

equals your tax liability shown on Form 941, line 12.

• Don't show negative amounts on Form 941, line 16, or 

Schedule B (Form 941).

• For prior period errors, don't adjust your tax liabilities 

reported on Form 941, line 16, or on Schedule B 

(Form 941). Instead, file an adjusted return (Form 

941-X, 944-X, or 945-X) if you’re also adjusting your 

tax liability. If you’re only adjusting your deposits in response to an FTD penalty notice, see the Instructions 

for Schedule B (Form 941) or the Instructions for Form 

945-A (for Forms 944 and 945).

In addition to civil penalties, you may be subject 

to criminal prosecution (brought to trial) for willfully:

• Evading tax;

• Failing to collect or truthfully account for and pay over 

tax;

• Failing to file a return, supply information, or pay any 

tax due;

• Furnishing false or fraudulent Forms W-2 to employees or failing to furnish Forms W-2;

• Committing fraud and providing false statements;

• Preparing and filing a fraudulent return; or

• Committing identity theft.

12. Filing Form 941 or Form 

944

Form 941. If you paid wages subject to federal income 

tax withholding (including withholding on sick pay and 

supplemental unemployment benefits) or social security 

and Medicare taxes, you must file Form 941 quarterly 

CAUTION

!

Page 32 Publication 15 (2022)
even if you have no taxes to report, unless you filed a final 

return, you receive an IRS notification that you’re eligible 

to file Form 944, or the exceptions discussed later apply. 

Also, if you’re required to file Forms 941 but believe your 

employment taxes for the calendar year will be $1,000 or 

less, and you would like to file Form 944 instead of Forms 

941, you must contact the IRS during the first calendar 

quarter of the tax year to request to file Form 944. You 

must receive written notice from the IRS to file Form 944 

instead of Forms 941 before you may file this form. For 

more information on requesting to file Form 944, including 

the methods and deadlines for making a request, see the 

Instructions for Form 944. Form 941 must be filed by the 

last day of the month that follows the end of the quarter. 

See Calendar, earlier.

Form 944. If you receive written notification that you 

qualify for the Form 944 program, you must file Form 944 

instead of Form 941. You must file Form 944 even if you 

have no taxes to report (or you have taxes in excess of 

$1,000 to report) unless you filed a final return for the prior 

year. If you received notification to file Form 944, but prefer to file Form 941, you can request to have your filing requirement changed to Form 941 during the first calendar 

quarter of the tax year. For more information on requesting to file Forms 941, including the methods and deadlines for making a request, see the Instructions for Form 

944. File your 2021 Form 944 by January 31, 2022. However, if you timely deposited all taxes when due, you may 

file by February 10, 2022.

Exceptions. The following exceptions apply to the filing 

requirements for Forms 941 and 944.

• Seasonal employers who don't have to file a 

Form 941 for quarters when they have no tax liability because they have paid no wages. To alert 

the IRS you won't have to file a return for one or more 

quarters during the year, check the “Seasonal employer” box on Form 941, line 18. When you fill out 

Form 941, be sure to check the box on the top of the 

form that corresponds to the quarter reported. Generally, the IRS won't inquire about unfiled returns if at 

least one taxable return is filed each year. However, 

you must check the “Seasonal employer” box on every Form 941 you file. Otherwise, the IRS will expect a 

return to be filed for each quarter.

• Household employers reporting social security 

and Medicare taxes and/or withheld income tax. If 

you file Form 941 or Form 944 for business employees, you may include taxes for household employees 

on your Form 941 or Form 944. Otherwise, report social security and Medicare taxes and income tax withholding for household employees on Schedule H 

(Form 1040). See Pub. 926 for more information.

• Employers reporting wages for employees in 

American Samoa, Guam, the Commonwealth of 

the Northern Mariana Islands, the U.S. Virgin Islands, or Puerto Rico. If your employees aren't subject to U.S. income tax withholding, use Forms 

941-SS, 944, or Formulario 944(SP). Employers in Puerto Rico use Formularios 941-PR, 944(SP), or Form 

944. If you have both employees who are subject to 

U.S. income tax withholding and employees who 

aren't subject to U.S. income tax withholding, you 

must file only Form 941 (or Form 944 or Formulario 

944(SP)) and include all of your employees' wages on 

that form. For more information, see Pub. 80, Federal 

Tax Guide for Employers in the U.S. Virgin Islands, 

Guam, American Samoa, and the Commonwealth of 

the Northern Mariana Islands, or Pub. 179, Guía Contributiva Federal para Patronos Puertorriqueños.

• Agricultural employers reporting social security, 

Medicare, and withheld income taxes. Report 

these taxes on Form 943. For more information, see 

Pub. 51.

Employers that pay Railroad Retirement Tax Act 

(RRTA) taxes use Form CT-1 to report employment taxes imposed by the RRTA, and Form 941, 

or Form 944, to report federal income taxes withheld from 

their employees' wages and other compensation.

E-file. The IRS e-file program allows a taxpayer to electronically file Form 941 or Form 944 using a computer with 

an Internet connection and commercial tax preparation 

software. For more information, go to IRS.gov/

EmploymentEfile, or call 866-255-0654.

Electronic filing by reporting agents. Reporting 

agents filing Form 940, 941, or 944 for groups of taxpayers can file them electronically. For details, see Pub. 

3112, IRS e-file Application and Participation. For information on electronic filing of Forms 940, 941, and 944, see 

Revenue Procedure 2007-40, 2007-26 I.R.B. 1488, available at IRS.gov/irb/2007-26_IRB#RP-2007-40. For information on the different types of third-party payer arrangements, see section 16.

Electronic filing by CPEOs. With the exception of the 

first quarter for which a CPEO is certified, CPEOs are required to electronically file Form 941. Under certain circumstances, the IRS may waive the electronic filing requirement. To request a waiver, the CPEO must file a 

written request using the IRS Online Registration System 

for Professional Employer Organizations at least 45 days 

before the due date of the return for which the CPEO is 

unable to electronically file. For more information on filing 

a waiver request electronically, go to IRS.gov/CPEO.

Penalties. For each whole or part month a return isn't 

filed when required, there is a failure-to-file (FTF) penalty 

of 5% of the unpaid tax due with that return. The maximum 

penalty is generally 25% of the tax due. Also, for each 

whole or part month the tax is paid late, there is a failure-to-pay (FTP) penalty of 0.5% per month of the amount 

of tax. For individual filers only, the FTP penalty is reduced from 0.5% per month to 0.25% per month if an installment agreement is in effect. You must have filed your 

return on or before the due date of the return to qualify for 

the reduced penalty. The maximum amount of the FTP 

penalty is also 25% of the tax due. If both penalties apply 

in any month, the FTF penalty is reduced by the amount of 

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Publication 15 (2022) Page 33
the FTP penalty. The penalties won't be charged if you 

have a reasonable cause for failing to file or pay. If you receive a penalty notice, you can provide an explanation of 

why you believe reasonable cause exists.

Note. In addition to any penalties, interest accrues 

from the due date of the tax on any unpaid balance.

If income, social security, or Medicare taxes that must 

be withheld aren't withheld or aren't paid, you may be personally liable for the trust fund recovery penalty. See Trust 

fund recovery penalty in section 11.

Generally, the use of a third-party payer, such as a PSP 

or reporting agent, doesn't relieve an employer of the responsibility to ensure tax returns are filed and all taxes are 

paid or deposited correctly and on time. However, see 

Certified professional employer organization (CPEO), 

later, for an exception.

Don't file more than one Form 941 per quarter or 

more than one Form 944 per year. Employers with 

multiple locations or divisions must file only one Form 941 

per quarter or one Form 944 per year. Filing more than 

one return may result in processing delays and may require correspondence between you and the IRS. For information on making adjustments to previously filed returns, 

see section 13.

Reminders about filing. 

• Don't report more than 1 calendar quarter on a Form 

941.

• If you need Form 941 or Form 944, go to IRS.gov/

Forms. Also see Ordering Employer Tax Forms, Instructions, and Publications, earlier.

• Enter your name and EIN on Form 941 or Form 944. 

Be sure they’re exactly as they appeared on earlier returns.

• See the Instructions for Form 941 or the Instructions 

for Form 944 for information on preparing the form.

Final return. If you go out of business, you must file a final return for the last quarter (last year for Form 944) in 

which wages are paid. If you continue to pay wages or 

other compensation for periods following termination of 

your business, you must file returns for those periods. See 

the Instructions for Form 941 or the Instructions for Form 

944 for details on how to file a final return.

If you’re required to file a final return, you’re also required to furnish Forms W-2 to your employees and file 

Forms W-2 and W-3 with the SSA by the due date of your 

final return. Don't send an original or copy of your Form 

941 or Form 944 to the SSA. See the General Instructions 

for Forms W-2 and W-3 for more information.

Filing late returns for previous years. Get a copy of 

Form 941 or Form 944 (and separate instructions) with a 

revision date showing the year, and, if applicable, quarter 

for which your delinquent return is being filed. Prior year 

and/or quarter Forms 941 and 944 are available, respectively, at IRS.gov/Form941 and IRS.gov/Form944 (select 

the link for all form revisions under "Other Items You May 

Find Useful"). Also, see Ordering Employer Tax Forms, Instructions, and Publications, earlier. Contact the IRS at 

800-829-4933 if you have any questions about filing late 

returns.

Table 3. Social Security and Medicare Tax 

Rates (for 3 Prior Years)

Calendar Year

Wage Base Limit 

(each employee)

Tax Rate on 

Taxable Wages 

and Tips

2021—Social Security $142,800 12.4%*

2021—Medicare All Wages 2.9%

2020—Social Security $137,700 12.4%**

2020—Medicare All Wages 2.9%

2019—Social Security $132,900 12.4%

2019—Medicare All Wages 2.9%

* Qualified sick leave wages and qualified family leave wages for leave taken 

before April 1, 2021, aren't subject to the employer share of social security 

tax; therefore, the tax rate on these wages is 6.2% (0.062).

** Qualified sick leave wages and qualified family leave wages aren't subject 

to the employer share of social security tax; therefore, the tax rate on these 

wages for 2020 is 6.2% (0.062).

Reconciling Forms W-2, W-3, and 941 or 944. When 

there are discrepancies between Forms 941 or Form 944 

filed with the IRS and Forms W-2 and W-3 filed with the 

SSA, the IRS or the SSA may contact you to resolve the 

discrepancies.

Take the following steps to help reduce discrepancies.

1. Report bonuses as wages and as social security and 

Medicare wages on Forms W-2 and on Form 941 or 

Form 944.

2. Report both social security and Medicare wages and 

taxes separately on Forms W-2 and W-3, and on 

Form 941 or Form 944.

3. Report the employee share of social security taxes on 

Form W-2 in the box for social security tax withheld 

(box 4), not as social security wages.

4. Report the employee share of Medicare taxes on 

Form W-2 in the box for Medicare tax withheld 

(box 6), not as Medicare wages.

5. Make sure the social security wage amount for each 

employee doesn't exceed the annual social security 

wage base limit ($147,000 for 2022).

6. Don't report noncash wages that aren't subject to social security or Medicare taxes, as discussed earlier in 

Wages not paid in money in section 5, as social security or Medicare wages.

7. If you used an EIN on any Form 941 or Form 944 for 

the year that is different from the EIN reported on 

Form W-3, enter the other EIN on Form W-3 in the 

box for “Other EIN used this year” (box h).

8. Be sure the amounts on Form W-3 are the total of 

amounts from Forms W-2.

Page 34 Publication 15 (2022)
9. Reconcile Form W-3 with your four quarterly Forms 

941 or annual Form 944 by comparing amounts reported for the following items.

a. Federal income tax withheld.

b. Social security and Medicare wages.

c. Social security and Medicare taxes. Generally, the 

amounts shown on Forms 941 or annual Form 

944, including current year adjustments, should 

be approximately twice the amounts shown on 

Form W-3 because Form 941 and Form 944 report both the employer and employee social security and Medicare taxes while Form W-3 reports 

only the employee taxes.

Don't report backup withholding or withholding on nonpayroll payments, such as pensions, annuities, and gambling winnings, on Form 941 or Form 944. Withholding on 

nonpayroll payments is reported on Forms 1099 or W-2G 

and must be reported on Form 945. Only taxes and withholding reported on Form W-2 should be reported on 

Form 941 or Form 944.

Amounts reported on Forms W-2, W-3, and Forms 941 

or Form 944 may not match for valid reasons. For example, if you withheld any Additional Medicare Tax from your 

employee’s wages, the amount of Medicare tax that is reported on Forms 941, line 5c, column 2, or Form 944, 

line 4c, column 2, won’t be twice the amount of the Medicare tax withheld that is reported in box 6 of Form W-3 because the Additional Medicare Tax is only imposed on the 

employee; there is no employer share of Additional Medicare Tax. Make sure there are valid reasons for any mismatch. Keep your reconciliation so you’ll have a record of 

why amounts didn't match in case there are inquiries from 

the IRS or the SSA. See the Instructions for Schedule D 

(Form 941) if you need to explain any discrepancies that 

were caused by an acquisition, statutory merger, or consolidation.

When reconciling Forms W-2 and W-3 to Forms 

941 or Form 944, you should consider that qualified sick leave wages and qualified family leave 

wages for leave taken before April 1, 2021, aren't subject 

to the employer share of social security tax.

13. Reporting Adjustments to 

Form 941 or Form 944

Current Period Adjustments

In certain cases, amounts reported as social security and 

Medicare taxes on Form 941, lines 5a–5d, column 2 

(Form 944, lines 4a–4d, column 2), must be adjusted to 

arrive at your correct tax liability (for example, excluding 

amounts withheld by a third-party payer or amounts you 

weren't required to withhold). Current period adjustments 

are reported on Form 941, lines 7–9, or Form 944, line 6, 

and include the following types of adjustments.

CAUTION

!

Fractions-of-cents adjustment. If there is a small difference between total taxes after adjustments and nonrefundable credits (Form 941, line 12; Form 944, line 9) and 

total deposits (Form 941, line 13a; Form 944, line 10a), it 

may have been caused, all or in part, by rounding to the 

nearest cent each time you figured payroll. This rounding 

occurs when you figure the amount of social security and 

Medicare tax to be withheld and deposited from each employee's wages. The IRS refers to rounding differences relating to employee withholding of social security and Medicare taxes as “fractions-of-cents” adjustments. If you pay 

your taxes with Form 941 (or Form 944) instead of making 

deposits because your total taxes for the quarter (year for 

Form 944) are less than $2,500, you may also report a 

fractions-of-cents adjustment.

To determine if you have a fractions-of-cents adjustment for 2022, multiply the total wages and tips for the 

quarter subject to:

• Social security tax reported on Form 941 or Form 944 

by 6.2% (0.062),

• Medicare tax reported on Form 941 or Form 944 by 

1.45% (0.0145), and

• Additional Medicare Tax reported on Form 941 or 

Form 944 by 0.9% (0.009).

Compare these amounts (the employee share of social 

security and Medicare taxes) with the total social security 

and Medicare taxes actually withheld from employees and 

shown in your payroll records for the quarter (Form 941) 

or the year (Form 944). If there is a small difference, the 

amount, positive or negative, may be a fractions-of-cents 

adjustment. Fractions-of-cents adjustments are reported 

on Form 941, line 7, or Form 944, line 6. If the actual 

amount withheld is less, report a negative adjustment using a minus sign (if possible; otherwise, use parentheses) 

in the entry space. If the actual amount is more, report a 

positive adjustment.

Adjustment of tax on third-party sick pay. Report both 

the employer and employee share of social security and 

Medicare taxes for sick pay on Form 941, lines 5a and 5c 

(Form 944, lines 4a and 4c). If the aggregate wages paid 

for an employee by the employer and third-party payer exceed $200,000 for the calendar year, report the Additional 

Medicare Tax on Form 941, line 5d (Form 944, line 4d). 

Show as a negative adjustment on Form 941, line 8 (Form 

944, line 6), the social security and Medicare taxes withheld on sick pay by a third-party payer. See section 6 of 

Pub. 15-A for more information.

Adjustment of tax on tips. If, by the 10th of the month 

after the month you received an employee's report on tips, 

you don't have enough employee funds available to withhold the employee's share of social security and Medicare 

taxes, you no longer have to collect it. However, report the 

entire amount of these tips on Form 941, lines 5b and 5c 

(Form 944, lines 4b and 4c). If the aggregate wages and 

tips paid for an employee exceed $200,000 for the calendar year, report the Additional Medicare Tax on Form 941, 

line 5d (Form 944, line 4d). Include as a negative adjustment on Form 941, line 9 (Form 944, line 6), the total 

Publication 15 (2022) Page 35
uncollected employee share of the social security and 

Medicare taxes.

Adjustment of tax on group-term life insurance premiums paid for former employees. The employee 

share of social security and Medicare taxes for premiums 

on group-term life insurance over $50,000 for a former 

employee is paid by the former employee with his or her 

tax return and isn't collected by the employer. However, 

include all social security and Medicare taxes for such 

coverage on Form 941, lines 5a and 5c (Form 944, lines 

4a and 4c). If the amount paid for an employee for premiums on group-term life insurance combined with other wages exceeds $200,000 for the calendar year, report the 

Additional Medicare Tax on Form 941, line 5d (Form 944, 

line 4d). Back out the amount of the employee share of 

these taxes as a negative adjustment on Form 941, line 9 

(Form 944, line 6). See Pub. 15-B for more information on 

group-term life insurance.

For the above adjustments, prepare and retain a 

brief supporting statement explaining the nature 

and amount of each. Don't attach the statement to 

Form 941 or Form 944. See the General Instructions for 

Forms W-2 and W-3 for information on how to report the 

uncollected employee share of social security and Medicare taxes on tips and group-term life insurance on Form 

W-2.

Example. Cedar, Inc., filed Form 941 and was entitled 

to the following current period adjustments.

• Fractions of cents. Cedar, Inc., determined the 

amounts withheld and deposited for social security 

and Medicare taxes during the quarter were a net 

$1.44 more than the employee share of the amount 

figured on Form 941, lines 5a–5d, column 2 (social security and Medicare taxes). This difference was 

caused by adding or dropping fractions of cents when 

figuring social security and Medicare taxes for each 

wage payment. Cedar, Inc., must report a positive 

$1.44 fractions-of-cents adjustment on Form 941, 

line 7.

• Third-party sick pay. Cedar, Inc., included taxes of 

$2,000 for sick pay on Form 941, lines 5a and 5c, column 2, for social security and Medicare taxes. However, the third-party payer of the sick pay withheld and 

paid the employee share ($1,000) of these taxes. Cedar, Inc., is entitled to a $1,000 sick pay adjustment 

(negative) on Form 941, line 8.

• Life insurance premiums. Cedar, Inc., paid 

group-term life insurance premiums for policies in excess of $50,000 for former employees. The former 

employees must pay the employee share of the social 

security and Medicare taxes ($200) on the policies. 

However, Cedar, Inc., must include the employee 

share of these taxes with the social security and Medicare taxes reported on Form 941, lines 5a and 5c, column 2. Therefore, Cedar, Inc., is entitled to a negative 

$200 adjustment on Form 941, line 9.

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No change to record of federal tax liability. Don't 

make any changes to your record of federal tax liability reported on Form 941, line 16, or Schedule B (Form 941) 

(for Form 944 filers, Form 944, line 13, or Form 945-A) for 

current period adjustments. The amounts reported on the 

record reflect the actual amounts you withheld from employees' wages for social security and Medicare taxes. 

Because the current period adjustments make the 

amounts reported on Form 941, lines 5a–5d, column 2 

(Form 944, lines 4a–4d, column 2), equal the actual 

amounts you withheld (the amounts reported on the record), no additional changes to the record of federal tax liability are necessary for these adjustments.

Prior Period Adjustments

Forms for prior period adjustments. Use Form 941-X 

or Form 944-X to make a correction after you discover an 

error on a previously filed Form 941 or Form 944. There 

are also Forms 943-X, 945-X, and CT-1 X to report corrections on the corresponding returns. Use Form 843 

when requesting a refund or abatement of assessed interest or penalties.

See Revenue Ruling 2009-39, 2009-52 I.R.B. 

951, for examples of how the interest-free adjustment and claim for refund rules apply in 10 different situations. You can find Revenue Ruling 2009-39 at 

IRS.gov/irb/2009-52_IRB#RR-2009-39.

Background. Treasury Decision 9405 changed the 

process for making interest-free adjustments to employment taxes reported on Form 941 and Form 944 and for 

filing a claim for refund of employment taxes. Treasury 

Decision 9405, 2008-32 I.R.B. 293, is available at 

IRS.gov/irb/2008-32_IRB#TD-9405. You’ll use the adjustment process if you underreported employment taxes and 

are making a payment, or if you overreported employment 

taxes and will be applying the credit to the Form 941 or 

Form 944 period during which you file Form 941-X or 

Form 944-X. You’ll use the claim process if you overreported employment taxes and are requesting a refund or 

abatement of the overreported amount. We use the terms 

“correct” and “corrections” to include interest-free adjustments under sections 6205 and 6413, and claims for refund and abatement under sections 6402, 6414, and 

6404.

Correcting employment taxes. When you discover an 

error on a previously filed Form 941 or Form 944, you 

must:

• Correct that error using Form 941-X or Form 944-X,

• File a separate Form 941-X or Form 944-X for each 

Form 941 or Form 944 you’re correcting, and

• File Form 941-X or Form 944-X separately. Don't file 

with Form 941 or Form 944.

Report current quarter adjustments for fractions of 

cents, third-party sick pay, tips, and group-term life insurance on Form 941 using lines 7–9, and on Form 944 using 

line 6. See Current Period Adjustments, earlier.

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Page 36 Publication 15 (2022)
Report the correction of underreported and overreported amounts for the same tax period on a single Form 

941-X or Form 944-X unless you’re requesting a refund. If 

you’re requesting a refund and are correcting both underreported and overreported amounts, file one Form 941-X 

or Form 944-X correcting the underreported amounts only 

and a second Form 941-X or Form 944-X correcting the 

overreported amounts.

See the chart on the last page of Form 941-X or Form 

944-X for help in choosing whether to use the adjustment 

process or the claim process. See the Instructions for 

Form 941-X or the Instructions for Form 944-X for details 

on how to make the adjustment or claim for refund or 

abatement.

Income tax withholding adjustments. In a current calendar year, correct prior quarter income tax withholding 

errors by making the correction on Form 941-X when you 

discover the error.

You may make an adjustment only to correct income 

tax withholding errors discovered during the same calendar year in which you paid the wages. This is because the 

employee uses the amount shown on Form W-2 or, if applicable, Form W-2c, as a credit when filing his or her income tax return (Form 1040, etc.).

You can't adjust amounts reported as income tax withheld in a prior calendar year unless it is to correct an administrative error or section 3509 applies. An administrative error occurs if the amount you entered on Form 941 or 

Form 944 isn't the amount you actually withheld. For example, if the total income tax actually withheld was incorrectly reported on Form 941 or Form 944 due to a mathematical or transposition error, this would be an 

administrative error. The administrative error adjustment 

corrects the amount reported on Form 941 or Form 944 to 

agree with the amount actually withheld from employees 

and reported on their Forms W-2.

Additional Medicare Tax withholding adjustments.

Generally, the rules discussed earlier under Income tax 

withholding adjustments apply to Additional Medicare Tax 

withholding adjustments. That is, you may make an adjustment to correct Additional Medicare Tax withholding 

errors discovered during the same calendar year in which 

you paid wages. You can't adjust amounts reported in a 

prior calendar year unless it is to correct an administrative 

error or section 3509 applies. If you have overpaid Additional Medicare Tax, you can't file a claim for refund for 

the amount of the overpayment unless the amount wasn't 

actually withheld from the employee's wages (which 

would be an administrative error).

If a prior year error was a nonadministrative error, you 

may correct only the wages and tips subject to Additional Medicare Tax withholding.

Collecting underwithheld taxes from employees. If 

you withheld no income, social security, or Medicare 

taxes or less than the correct amount from an employee's 

wages, you can make it up from later pay to that employee. But you’re the one who owes the underpayment. 

Reimbursement is a matter for settlement between you 

and the employee. Underwithheld income tax and Additional Medicare Tax must be recovered from the employee on or before the last day of the calendar year. 

There are special rules for tax on tips (see section 6) and 

fringe benefits (see section 5).

Refunding amounts incorrectly withheld from employees. If you withheld more than the correct amount of 

income, social security, or Medicare taxes from wages 

paid, repay or reimburse the employee the excess. Any 

excess income tax or Additional Medicare Tax withholding 

must be repaid or reimbursed to the employee before the 

end of the calendar year in which it was withheld. Keep in 

your records the employee's written receipt showing the 

date and amount of the repayment or record of reimbursement. If you didn't repay or reimburse the employee, you 

must report and pay each excess amount when you file 

Form 941 for the quarter (or Form 944 for the year) in 

which you withheld too much tax.

Correcting filed Forms W-2 and W-3. When adjustments are made to correct wages and social security and 

Medicare taxes because of a change in the wage totals 

reported for a previous year, you also need to file Form 

W-2c and Form W-3c with the SSA. Up to 25 Forms W-2c 

per Form W-3c may be filed per session over the Internet, 

with no limit on the number of sessions. For more information, visit the SSA's Employer W-2 Filing Instructions & Information webpage at SSA.gov/employer.

Exceptions to interest-free corrections of employment taxes. A correction won't be eligible for interest-free treatment if:

• The failure to report relates to an issue raised in an 

IRS examination of a prior return, or

• The employer knowingly underreported its employment tax liability.

A correction won't be eligible for interest-free treatment 

after the earlier of the following.

• Receipt of an IRS notice and demand for payment after assessment.

• Receipt of an IRS notice of determination under section 7436.

Wage Repayments

If an employee repays you for wages received in error, 

don't offset the repayments against current year wages 

unless the repayments are for amounts received in error in 

the current year.

Repayment of current year wages. If you receive repayments for wages paid during a prior quarter in the current year, report adjustments on Form 941-X to recover income tax withholding and social security and Medicare 

taxes for the repaid wages.

Repayment of prior year wages. If you receive repayments for wages paid during a prior year, report an adjustment on Form 941-X or Form 944-X to recover the social 

security and Medicare taxes. You can't make an 

Publication 15 (2022) Page 37
adjustment for income tax withholding because the wages 

were income to the employee for the prior year. You can't 

make an adjustment for Additional Medicare Tax withholding because the employee determines liability for Additional Medicare Tax on the employee's income tax return 

for the prior year.

You must also file Forms W-2c and W-3c with the SSA 

to correct social security and Medicare wages and taxes. 

Don't correct wages (box 1) on Form W-2c for the amount 

paid in error. Give a copy of Form W-2c to the employee.

Employee reporting of repayment. The wages paid 

in error in the prior year remain taxable to the employee 

for that year. This is because the employee received and 

had use of those funds during that year. The employee 

isn't entitled to file an amended return (Form 1040-X) to 

recover the income tax on these wages. Instead, the employee may be entitled to a deduction or credit for the repaid wages on his or her income tax return for the year of 

repayment. However, the employee should file an amended return (Form 1040-X) to recover any Additional Medicare Tax paid on the wages paid in error in the prior year. 

If an employee asks about reporting their wage repayment, you may tell the employee to see Repayments in 

Pub. 525 for more information.

14. Federal Unemployment 

(FUTA) Tax

The Federal Unemployment Tax Act (FUTA), with state 

unemployment systems, provides for payments of unemployment compensation to workers who have lost their 

jobs. Most employers pay both a federal and a state unemployment tax. For a list of state unemployment agencies, visit the U.S. Department of Labor’s website at 

oui.doleta.gov/unemploy/agencies.asp. Only the employer pays FUTA tax; it isn't withheld from the employee's wages. For more information, see the Instructions for 

Form 940.

Services rendered to a federally recognized Indian tribal government (or any subdivision, subsidiary, or business wholly owned by such an Indian tribe) are exempt from FUTA tax, subject to the 

tribe's compliance with state law. For more information, 

see section 3309(d) and Pub. 4268.

Who must pay? Use the following three tests to determine whether you must pay FUTA tax. Each test applies 

to a different category of employee, and each is independent of the others. If a test describes your situation, you’re 

subject to FUTA tax on the wages you pay to employees 

in that category during the current calendar year.

1. General test.

You’re subject to FUTA tax in 2022 on the wages 

you pay employees who aren't farmworkers or household workers if:

a. You paid wages of $1,500 or more in any calendar 

quarter in 2021 or 2022, or

TIP

b. You had one or more employees for at least some 

part of a day in any 20 or more different weeks in 

2021 or 20 or more different weeks in 2022.

2. Household employees test.

You’re subject to FUTA tax if you paid total cash 

wages of $1,000 or more to household employees in 

any calendar quarter in 2021 or 2022. A household 

employee is an employee who performs household 

work in a private home, local college club, or local fraternity or sorority chapter.

3. Farmworkers test.

You’re subject to FUTA tax on the wages you pay 

to farmworkers if:

a. You paid cash wages of $20,000 or more to farmworkers during any calendar quarter in 2021 or 

2022, or

b. You employed 10 or more farmworkers during at 

least some part of a day (whether or not at the 

same time) during any 20 or more different weeks 

in 2021 or 20 or more different weeks in 2022.

Figuring FUTA tax. For 2022, the FUTA tax rate is 

6.0%. The tax applies to the first $7,000 you pay to each 

employee as wages during the year. The $7,000 is the 

federal wage base. Your state wage base may be different.

Generally, you can take a credit against your FUTA tax 

for amounts you paid into state unemployment funds. The 

credit may be as much as 5.4% of FUTA taxable wages. If 

you’re entitled to the maximum 5.4% credit, the FUTA tax 

rate after credit is 0.6%. You’re entitled to the maximum 

credit if you paid your state unemployment taxes in full, on 

time, and on all the same wages as are subject to FUTA 

tax, and as long as the state isn't determined to be a credit 

reduction state. See the Instructions for Form 940 to determine the credit.

In some states, the wages subject to state unemployment tax are the same as the wages subject to FUTA tax. 

However, certain states exclude some types of wages 

from state unemployment tax, even though they’re subject 

to FUTA tax (for example, wages paid to corporate officers, certain payments of sick pay by unions, and certain 

fringe benefits). In such a case, you may be required to 

deposit more than 0.6% FUTA tax on those wages. See 

the Instructions for Form 940 for further guidance.

In years when there are credit reduction states, 

you must include liabilities owed for credit reduction with your fourth quarter deposit. You may deposit the anticipated extra liability throughout the year, but 

it isn't due until the due date for the deposit for the fourth 

quarter, and the associated liability should be recorded as 

being incurred in the fourth quarter. See the Instructions 

for Form 940 for more information.

Successor employer. If you acquired a business 

from an employer who was liable for FUTA tax, you may 

be able to count the wages that employer paid to the employees who continue to work for you when you figure the 

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Page 38 Publication 15 (2022)
$7,000 FUTA tax wage base. See the Instructions for 

Form 940.

Depositing FUTA tax. For deposit purposes, figure 

FUTA tax quarterly. Determine your FUTA tax liability by 

multiplying the amount of taxable wages paid during the 

quarter by 0.6%. Stop depositing FUTA tax on an employee's wages when he or she reaches $7,000 in taxable wages for the calendar year.

If your FUTA tax liability for any calendar quarter is 

$500 or less, you don't have to deposit the tax. Instead, 

you may carry it forward and add it to the liability figured in 

the next quarter to see if you must make a deposit. If your 

FUTA tax liability for any calendar quarter is over $500 (including any FUTA tax carried forward from an earlier quarter), you must deposit the tax by EFT. See section 11 for 

more information on EFT.

Household employees. You’re not required to deposit FUTA taxes for household employees unless you report their wages on Form 941, 943, or 944. See Pub. 926 

for more information.

When to deposit. Deposit the FUTA tax by the last 

day of the first month that follows the end of the quarter. If 

the due date for making your deposit falls on a Saturday, 

Sunday, or legal holiday, you may make your deposit on 

the next business day. See Legal holiday, earlier, for a list 

of legal holidays occurring in 2022.

If your liability for the fourth quarter (plus any undeposited amount from any earlier quarter) is over $500, deposit 

the entire amount by the due date of Form 940 (January 

31). If it is $500 or less, you can make a deposit, pay the 

tax with a credit or debit card, or pay the tax with your 

Form 940 by January 31. If you file Form 940 electronically, you can e-file and use EFW to pay the balance due. 

For more information on paying your taxes with a credit or 

debit card or using EFW, go to IRS.gov/Payments.

Table 4. When To Deposit FUTA Taxes

Quarter Ending Due Date

Jan.–Feb.–Mar. Mar. 31 Apr. 30

Apr.–May–June June 30 July 31

July–Aug.–Sept. Sept. 30 Oct. 31

Oct.–Nov.–Dec. Dec. 31 Jan. 31

Reporting FUTA tax. Use Form 940 to report FUTA tax. 

File your 2021 Form 940 by January 31, 2022. However, if 

you deposited all FUTA tax when due, you may file on or 

before February 10, 2022.

Form 940 e-file. The Form 940 e-file program allows 

a taxpayer to electronically file Form 940 using a computer with an Internet connection and commercial tax 

preparation software. For more information, visit the IRS 

website at IRS.gov/EmploymentEfile, or call 

866-255-0654.

Household employees. If you didn't report employment taxes for household employees on Form 941, 943, 

or 944, report FUTA tax for these employees on Schedule H (Form 1040). See Pub. 926 for more information. 

You must have an EIN to file Schedule H (Form 1040).

Electronic filing by reporting agents. Reporting 

agents filing Forms 940 for groups of taxpayers can file 

them electronically. See the Electronic filing by reporting 

agents discussion in section 12.

Electronic filing by CPEOs. CPEOs are required to 

electronically file Form 940. Under certain circumstances, 

the IRS may waive the electronic filing requirement. To request a waiver, the CPEO must file a written request using 

the IRS Online Registration System for Professional Employer Organizations at least 45 days before the due date 

of the return for which the CPEO is unable to electronically 

file. For more information on filing a waiver request electronically, go to IRS.gov/CPEO.

Publication 15 (2022) Page 39
15. Special Rules for Various Types of Services and Payments

Section references are to the Internal Revenue Code unless otherwise noted.

Special Classes of Employment and 

Special Types of Payments

Treatment Under Employment Taxes

Income Tax Withholding Social Security and 

Medicare (including 

Additional Medicare Tax 

when wages are paid in 

excess of $200,000)

FUTA

Aliens, nonresident. See Pub. 515 and Pub. 519.

Aliens, resident:

1. Service performed in the U.S. Same as U.S. citizen. Same as U.S. citizen. 

(Exempt if any part of 

service as crew member of 

foreign vessel or aircraft is 

performed outside U.S.)

Same as U.S. citizen.

2. Service performed outside the U.S. Withhold Taxable if (1) working for 

an American employer, or 

(2) an American employer 

by agreement covers U.S. 

citizens and residents 

employed by its foreign 

affiliates.

Exempt unless on or in 

connection with an 

American vessel or aircraft 

and either performed under 

contract made in U.S., or 

alien is employed on such 

vessel or aircraft when it 

touches U.S. port.

Cafeteria plan benefits under section 125. If employee chooses cash or other taxable benefit, subject to all employment taxes. If 

employee chooses a non-taxable benefit, the treatment is the same as if the benefit was 

provided outside the plan. See Pub. 15-B for more information.

Deceased worker:

1. Wages paid to beneficiary or estate in 

same calendar year as worker's death. 

See the General Instructions for Forms 

W-2 and W-3 for details.

Exempt Taxable Taxable

2. Wages paid to beneficiary or estate 

after calendar year of worker's death.

Exempt Exempt Exempt

Dependent care assistance programs. Exempt to the extent it is reasonable to believe amounts are excludable from gross 

income under section 129.

Disabled worker's wages paid after year in 

which worker became entitled to disability 

insurance benefits under the Social Security 

Act.

Withhold Exempt if worker didn't 

perform any service for 

employer during the period 

for which payment is made.

Taxable

Employee business expense 

reimbursement:

1. Accountable plan.

a. Amounts not exceeding specified 

government rate for per diem or 

standard mileage.

Exempt Exempt Exempt

b. Amounts in excess of specified 

government rate for per diem or 

standard mileage.

Withhold Taxable Taxable

2. Nonaccountable plan. See section 5 for 

details.

Withhold Taxable Taxable

Family employees:

1. Child employed by parent (or 

partnership in which each partner is a 

parent of the child).

Withhold Exempt until age 18; age 

21 for domestic service.

Exempt until age 21

2. Parent employed by child. Withhold Taxable if in course of the 

son's or daughter's 

business. For domestic 

services, see section 3.

Exempt

3. Spouse employed by spouse. Withhold Taxable if in course of 

spouse's business.

Exempt

See section 3 for more information.

Fishing and related activities. See Pub. 334.

Foreign governments and international 

organizations.

Exempt Exempt Exempt

Page 40 Publication 15 (2022)
Special Classes of Employment and 

Special Types of Payments

Treatment Under Employment Taxes

Income Tax Withholding Social Security and 

Medicare (including 

Additional Medicare Tax 

when wages are paid in 

excess of $200,000)

FUTA

Foreign service by U.S. citizens:

1. As U.S. Government employees. Withhold Same as within U.S. Exempt

2. For foreign affiliates of American 

employers and other private employers.

Exempt if at time of payment 

(1) it is reasonable to believe 

employee is entitled to 

exclusion from income under 

section 911, or (2) the 

employer is required by law 

of the foreign country to 

withhold income tax on such 

payment.

Exempt unless (1) an 

American employer by 

agreement covers U.S. 

citizens employed by its 

foreign affiliates, or (2) U.S. 

citizen works for American 

employer.

Exempt unless (1) on 

American vessel or aircraft 

and work is performed 

under contract made in U.S. 

or worker is employed on 

vessel when it touches U.S. 

port, or (2) U.S. citizen 

works for American 

employer (except in a 

contiguous country with 

which the U.S. has an 

agreement for 

unemployment 

compensation) or in the U.S. 

Virgin Islands.

Fringe benefits. Taxable on excess of fair market value of the benefit over the sum of an amount paid for it 

by the employee and any amount excludable by law. However, special valuation rules may 

apply. Benefits provided under cafeteria plans may qualify for exclusion from wages for 

social security, Medicare, and FUTA taxes. See Pub. 15-B for details.

Government employment:

State/local governments and political 

subdivisions, employees of:

1. Salaries and wages (includes payments 

to most elected and appointed officials). 

See chapter 3 of Pub. 963.

Withhold Generally, taxable for (1) 

services performed by 

employees who are either 

(a) covered under a 

section 218 agreement, or 

(b) not covered under a 

section 218 agreement 

and not a member of a 

public retirement system 

(mandatory social security 

and Medicare coverage); 

and (2) (for Medicare tax 

only) for services 

performed by employees 

hired or rehired after March 

31, 1986, who aren't 

covered under a section 

218 agreement or the 

mandatory social security 

provisions, unless 

specifically excluded by 

law. See Pub. 963.

Exempt

2. Election workers. Election individuals 

are workers who are employed to 

perform services for state or local 

governments at election booths in 

connection with national, state, or local 

elections.

Exempt Taxable if paid $2,000 or 

more in 2022 (lesser 

amount if specified by a 

section 218 social security 

agreement). See Revenue 

Ruling 2000-6.

Exempt

Note. File Form W-2 for payments of 

$600 or more even if no social security 

or Medicare taxes were withheld.

3. Emergency workers. Emergency 

workers who were hired on a temporary 

basis in response to a specific 

unforeseen emergency and aren't 

intended to become permanent 

employees.

Withhold Exempt if serving on a 

temporary basis in case of 

fire, storm, snow, 

earthquake, flood, or 

similar emergency.

Exempt

U.S. federal government employees. Withhold Taxable for Medicare. 

Taxable for social security 

unless hired before 1984. 

See section 3121(b)(5).

Exempt

Publication 15 (2022) Page 41
Special Classes of Employment and 

Special Types of Payments

Treatment Under Employment Taxes

Income Tax Withholding Social Security and 

Medicare (including 

Additional Medicare Tax 

when wages are paid in 

excess of $200,000)

FUTA

Homeworkers (industrial, cottage 

industry):

1. Common law employees. Withhold Taxable Taxable

2. Statutory employees. See section 2 for 

details.

Exempt Taxable if paid $100 or 

more in cash in a year.

Exempt

Hospital employees:

1. Interns. Withhold Taxable Exempt

2. Patients. Withhold Taxable (Exempt for state 

or local government 

hospitals.)

Exempt

Household employees:

1. Domestic service in private homes. Exempt (withhold if both 

employer and employee 

agree).

Taxable if paid $2,400 or 

more in cash in 2022. 

Exempt if performed by an 

individual under age 18 

during any portion of the 

calendar year and isn't the 

principal occupation of the 

employee.

Taxable if employer paid 

total cash wages of $1,000 

or more in any quarter in the 

current or preceding 

calendar year.

2. Domestic service in college clubs, 

fraternities, and sororities.

Exempt (withhold if both 

employer and employee 

agree).

Exempt if paid to regular 

student; also exempt if 

employee is paid less than 

$100 in a year by an 

income-tax-exempt 

employer.

Taxable if employer paid 

total cash wages of $1,000 

or more in any quarter in the 

current or preceding 

calendar year.

Insurance for employees:

1. Accident and health insurance 

premiums under a plan or system for 

employees and their dependents 

generally or for a class or classes of 

employees and their dependents.

Exempt (except 2% 

shareholder-employees of S 

corporations).

Exempt Exempt

2. Group-term life insurance costs. See 

Pub. 15-B for details.

Exempt Exempt, except for the 

cost of group-term life 

insurance includible in the 

employee's gross income. 

Special rules apply for 

former employees.

Exempt

Insurance agents or solicitors:

1. Full-time life insurance salesperson. Withhold only if employee 

under common law. See 

section 2.

Taxable Taxable if (1) employee 

under common law, and (2) 

not paid solely by 

commissions.

2. Other salesperson of life, casualty, etc., 

insurance.

Withhold only if employee 

under common law.

Taxable only if employee 

under common law.

Taxable if (1) employee 

under common law, and (2) 

not paid solely by 

commissions.

Interest on loans with below-market 

interest rates (foregone interest and deemed 

original issue discount).

See Pub. 15-A.

Leave-sharing plans: Amounts paid to an 

employee under a leave-sharing plan.

Withhold Taxable Taxable

Newspaper carriers and vendors:

Newspaper carriers under age 18; newspaper 

and magazine vendors buying at fixed prices 

and retaining receipts from sales to 

customers. See Pub. 15-A for information on 

statutory nonemployee status.

Exempt (withhold if both 

employer and employee 

voluntarily agree).

Exempt Exempt

Page 42 Publication 15 (2022)
Special Classes of Employment and 

Special Types of Payments

Treatment Under Employment Taxes

Income Tax Withholding Social Security and 

Medicare (including 

Additional Medicare Tax 

when wages are paid in 

excess of $200,000)

FUTA

Noncash payments:

1. For household work, agricultural labor, 

and service not in the course of the 

employer's trade or business.

Exempt (withhold if both 

employer and employee 

voluntarily agree).

Exempt Exempt

2. To certain retail commission 

salespersons ordinarily paid solely on a 

cash commission basis.

Optional with employer, 

except to the extent 

employee's supplemental 

wages during the year 

exceed $1 million.

Taxable Taxable

Nonprofit organizations. See Pub. 15-A.

Officers or shareholders of an S 

corporation: Distributions and other 

payments by an S corporation to a corporate 

officer or shareholder must be treated as 

wages to the extent the amounts are 

reasonable compensation for services to the 

corporation by an employee. See the 

Instructions for Form 1120-S.

Withhold Taxable Taxable

Partners: Payments to general or limited 

partners of a partnership. See Pub. 541 for 

partner reporting rules.

Exempt Exempt Exempt

Railroads: Payments subject to the Railroad 

Retirement Act. See Pub. 915 and the 

Instructions for Form CT-1 for more details.

Withhold Exempt Exempt

Religious exemptions. See Pub. 15-A and Pub. 517.

Retirement and pension plans:

1. Employer contributions to a qualified 

plan.

Exempt Exempt Exempt

2. Elective employee contributions and 

deferrals to a plan containing a qualified 

cash or deferred compensation 

arrangement (401(k)).

Generally exempt, but see 

section 402(g) for limitation.

Taxable Taxable

3. Employer contributions to individual 

retirement accounts under simplified 

employee pension (SEP) plan.

Generally exempt, but see 

section 402(g) for salary 

reduction SEP limitation.

Exempt, except for amounts contributed under a salary 

reduction SEP agreement.

4. Employer contributions to section 

403(b) annuities including salary 

reduction contributions.

Generally exempt, but see 

section 402(g) for limitation.

Taxable if paid through a salary reduction agreement 

(written or otherwise).

5. Employee salary reduction contributions 

to a SIMPLE retirement account.

Exempt Taxable Taxable

6. Distributions from qualified retirement 

and pension plans and section 403(b) 

annuities. See Pub. 15-A for information 

on pensions, annuities, and employer 

contributions to nonqualified deferred 

compensation arrangements.

Withhold, but recipient may 

elect exemption on Form 

W-4P in certain cases; 

mandatory 20% withholding 

applies to an eligible rollover 

distribution that isn't a direct 

rollover; exempt for direct 

rollover. See Pub. 15-A.

Exempt Exempt

7. Employer contributions to a section 

457(b) plan.

Generally exempt, but see 

section 402(g) limitation.

Taxable Taxable

8. Employee salary reduction contributions 

to a section 457(b) plan.

Generally exempt, but see 

section 402(g) salary 

reduction limitation.

Taxable Taxable

Salespersons:

1. Common law employees. Withhold Taxable Taxable

2. Statutory employees. Exempt Taxable Taxable, except for full-time 

life insurance sales agents.

3. Statutory nonemployees (qualified real 

estate agents, direct sellers, and certain 

companion sitters). See Pub. 15-A for 

details.

Exempt Exempt Exempt

Publication 15 (2022) Page 43
Special Classes of Employment and 

Special Types of Payments

Treatment Under Employment Taxes

Income Tax Withholding Social Security and 

Medicare (including 

Additional Medicare Tax 

when wages are paid in 

excess of $200,000)

FUTA

Scholarships and fellowship grants 

(includible in income under section 

117(c)).

Withhold Taxability depends on the nature of the employment and 

the status of the organization. See Students, scholars, 

trainees, teachers, etc., below.

Severance or dismissal pay. Withhold Taxable Taxable

Service not in the course of the 

employer's trade or business (other than 

on a farm operated for profit or for 

household employment in private homes).

Withhold only if employee 

earns $50 or more in cash in 

a quarter and works on 24 or 

more different days in that 

quarter or in the preceding 

quarter.

Taxable if employee 

receives $100 or more in 

cash in a calendar year.

Taxable only if employee 

earns $50 or more in cash in 

a quarter and works on 24 

or more different days in 

that quarter or in the 

preceding quarter.

Sick pay. See Pub. 15-A for more information. Withhold Exempt after end of 6 calendar months after the calendar 

month employee last worked for employer.

Students, scholars, trainees, teachers, 

etc.:

1. Student enrolled and regularly attending 

classes, performing services for the 

following.

a. Private school, college, or 

university.

Withhold Exempt Exempt

b. Auxiliary nonprofit organization 

operated for and controlled by 

school, college, or university.

Withhold Exempt unless services 

are covered by a section 

218 (Social Security Act) 

agreement.

Exempt

c. Public school, college, or 

university.

Withhold Exempt unless services 

are covered by a section 

218 (Social Security Act) 

agreement.

Exempt

2. Full-time student performing service for 

academic credit, combining instruction 

with work experience as an integral part 

of the program.

Withhold Taxable Exempt unless program was 

established for or on behalf 

of an employer or group of 

employers.

3. Student nurse performing part-time 

services for nominal earnings at hospital 

as incidental part of training.

Withhold Exempt Exempt

4. Student employed by organized camps. Withhold Taxable Exempt

5. Student, scholar, trainee, teacher, etc., 

as nonimmigrant alien under section 

101(a)(15)(F), (J), (M), or (Q) of 

Immigration and Nationality Act (that is, 

aliens holding F-1, J-1, M-1, or Q-1 

visas).

Withhold unless excepted by 

regulations.

Exempt if service is performed for purpose specified in 

section 101(a)(15)(F), (J), (M), or (Q) of Immigration and 

Nationality Act. However, these taxes may apply if the 

employee becomes a resident alien. See the special 

residency tests for exempt individuals in chapter 1 of Pub. 

519.

Supplemental unemployment 

compensation plan benefits.

Withhold Exempt under certain conditions. See Pub. 15-A.

Tips:

1. If $20 or more in a month. Withhold Taxable Taxable for all tips reported 

in writing to employer.

2. If less than $20 in a month. See section 

6 for more information.

Exempt Exempt Exempt

Worker's compensation. Exempt Exempt Exempt

Page 44 Publication 15 (2022)
16. Third-Party Payer 

Arrangements

An employer may outsource some or all of its federal employment tax withholding, reporting, and payment obligations. An employer who outsources payroll and related tax 

duties (that is, withholding, reporting, and paying over social security, Medicare, FUTA, and income taxes) to a 

third-party payer will generally remain responsible for 

those duties, including liability for the taxes. However, see 

Certified professional employer organization (CPEO), 

later, for an exception.

If an employer outsources some or all of its payroll responsibilities, the employer should consider the following 

information.

• The employer remains responsible for federal tax deposits and other federal tax payments even though the 

employer may forward the tax amounts to the 

third-party payer to make the deposits and payments. 

If the third party fails to make the deposits and payments, the IRS may assess penalties and interest on 

the employer’s account. As the employer, you may be 

liable for all taxes, penalties, and interest due. The 

employer may also be held personally liable for certain 

unpaid federal taxes.

• If the employer’s account has any issues, the IRS will 

send correspondence to the employer at the address 

of record. We strongly recommend that the employer 

maintain its address as the address of record with the 

IRS. Having correspondence sent to the address of 

the third-party payer may significantly limit the employer’s ability to be informed about tax matters involving the employer’s business. Use Form 8822-B to update your business address.

• When a third party enrolls an employer in EFTPS for 

federal tax deposits, the employer will receive an Inquiry PIN. The employer should activate and use this 

Inquiry PIN to monitor its account and ensure the third 

party is making the required tax deposits.

The following are common third-party payers who an 

employer may contract with to perform payroll and related 

tax duties.

• Payroll service provider (PSP).

• Reporting agent.

• Agent with approved Form 2678.

• Payer designated under section 3504.

• Certified professional employer organization (CPEO).

Payroll service provider (PSP). A PSP helps administer payroll and payroll-related tax duties on behalf of the 

employer. A PSP may prepare paychecks for employees, 

prepare and file employment tax returns, prepare Form 

W-2, and make federal tax deposits and other federal tax 

payments. A PSP performs these functions using the EIN 

of the employer. A PSP isn't liable as either an employer 

or an agent of the employer for the employer’s employment taxes. If an employer is using a PSP to perform its 

tax duties, the employer remains liable for its employment 

tax obligations, including liability for employment taxes.

An employer who uses a PSP should ensure the PSP is 

using EFTPS to make federal tax deposits on behalf of the 

employer so the employer can confirm that the payments 

are being made on its behalf.

Reporting agent. A reporting agent is a type of PSP. A 

reporting agent helps administer payroll and payroll-related tax duties on behalf of the employer, including authorization to electronically sign and file forms set forth on 

Form 8655. An employer uses Form 8655 to authorize a 

reporting agent to perform functions on behalf of the employer. A reporting agent performs these functions using 

the EIN of the employer. A reporting agent isn't liable as 

either an employer or an agent of the employer for the employer’s employment taxes. If an employer is using a reporting agent to perform its tax duties, the employer remains liable for its employment obligations, including 

liability for employment taxes.

A reporting agent must use EFTPS to make federal tax 

deposits on behalf of an employer. The employer has access to EFTPS to confirm federal tax deposits were made 

on its behalf.

For more information on reporting agents, see Revenue 

Procedure 2012-32, 2012-34 I.R.B. 267, available at 

IRS.gov/irb/2012-34_IRB#RP-2012-32, and Pub. 1474, 

Technical Specifications Guide for Reporting Agent Authorization and Federal Tax Depositors.

Agent with an approved Form 2678. An agent with an 

approved Form 2678 helps administer payroll and related 

tax duties on behalf of the employer. An agent authorized 

under section 3504 may pay wages or compensation to 

some or all of the employees of an employer, prepare and 

file employment tax returns as set forth on Form 2678, 

prepare Form W-2, and make federal tax deposits and 

other federal tax payments. An employer uses Form 2678 

to request authorization to appoint an agent to perform 

functions on behalf of the employer. An agent with an approved Form 2678 is authorized to perform these functions using its own EIN. The agent files a Schedule R 

(Form 941) or, if applicable, Schedule R (Form 943) to allocate wages and taxes to the employers it represents as 

an agent.

If an employer is using an agent with an approved Form 

2678 to perform its tax duties, the agent and the employer 

are jointly liable for the employment taxes and related tax 

duties for which the agent is authorized to perform.

Form 2678 doesn't apply to FUTA taxes reportable on 

Form 940 unless the employer is a home care service recipient receiving home care services through a program 

administered by a federal, state, or local government 

agency.

For more information on an agent with an approved 

Form 2678, see Revenue Procedure 2013-39, 2013-52 

I.R.B. 830, available at IRS.gov/irb/

2013-52_IRB#RP-2013-39.

Publication 15 (2022) Page 45
Payer designated under section 3504. In certain circumstances, the IRS may designate a third-party payer to 

perform the acts of an employer. The IRS will designate a 

third-party payer on behalf of an employer if the third party 

has a service agreement with the employer. A service 

agreement is an agreement between the third-party payer 

and an employer in which the third-party payer (1) asserts 

it is the employer of individuals performing services for the 

employer; (2) pays wages to the individuals that perform 

services for the employer; and (3) assumes responsibility 

to withhold, report, and pay federal employment taxes for 

the wages it pays to the individuals who perform services 

for the employer.

A payer designated under section 3504 performs tax 

duties under the service agreement using its own EIN. If 

the IRS designates a third-party payer under section 

3504, the designated payer and the employer are jointly liable for the employment taxes and related tax duties for 

which the third-party payer is designated.

For more information on a payer designated under section 3504, see Regulations section 31.3504-2.

Certified professional employer organization 

(CPEO). The Stephen Beck, Jr., Achieving a Better Life 

Experience Act of 2014 required the IRS to establish a 

voluntary certification program for professional employer 

organizations (PEOs). PEOs handle various payroll administration and tax reporting responsibilities for their 

business clients and are typically paid a fee based on 

payroll costs. To become and remain certified under the 

certification program, certified professional employer organizations (CPEOs) must meet various requirements described in sections 3511 and 7705 and related published 

guidance. Certification as a CPEO may affect the employment tax liabilities of both the CPEO and its customers. A 

CPEO is generally treated for employment tax purposes 

as the employer of any individual who performs services 

for a customer of the CPEO and is covered by a contract 

described in section 7705(e)(2) between the CPEO and 

the customer (CPEO contract), but only for wages and 

other compensation paid to the individual by the CPEO. 

However, with respect to certain employees covered by a 

CPEO contract, you may also be treated as an employer 

of the employees and, consequently, may also be liable 

for federal employment taxes imposed on wages and 

other compensation paid by the CPEO to such employees.

CPEOs must complete Schedule R (Form 940), Schedule R (Form 941), or Schedule R (Form 943) when filing 

an aggregate Form 940, 941, or 943, respectively. CPEOs 

file Form 8973 to notify the IRS that they started or ended 

a service contract with a customer. To become a CPEO, 

the organization must apply through the IRS Online Registration System. For more information or to apply to become a CPEO, go to IRS.gov/CPEO. Also see Revenue 

Procedure 2017-14, 2017-3 I.R.B. 426, available at 

IRS.gov/irb/2017-03_IRB#RP-2017-14.

If both an employer and a section 3504 authorized agent (or CPEO or other third-party payer) 

paid wages to an employee during a quarter, both 

the employer and the section 3504 authorized agent (or 

TIP

CPEO or other third-party payer, if applicable) should file 

Form 941 reporting the wages each entity paid to the employee during the applicable quarter and issue Forms W-2 

reporting the wages each entity paid to the employee during the year.

How To Get Tax Help

If you have questions about a tax issue; need help preparing your tax return; or want to download free publications, 

forms, or instructions, go to IRS.gov to find resources that 

can help you right away.

Preparing and filing your tax return. Go to IRS.gov/

EmploymentEfile for more information on filing your employment tax returns electronically.

Getting answers to your tax questions. On 

IRS.gov, you can get up-to-date information on 

current events and changes in tax law.

• IRS.gov/Help: A variety of tools to help you get answers to some of the most common tax questions.

• IRS.gov/Forms: Find forms, instructions, and publications. You will find details on 2021 tax changes and 

hundreds of interactive links to help you find answers 

to your questions.

• You may also be able to access tax law information in 

your electronic filing software.

Need someone to prepare your tax return? There are 

various types of tax return preparers, including tax preparers, enrolled agents, certified public accountants (CPAs), 

attorneys, and many others who don’t have professional 

credentials. If you choose to have someone prepare your 

tax return, choose that preparer wisely. A paid tax preparer is:

• Primarily responsible for the overall substantive accuracy of your return,

• Required to sign the return, and

• Required to include their preparer tax identification 

number (PTIN).

Although the tax preparer always signs the return, 

you're ultimately responsible for providing all the information required for the preparer to accurately prepare your 

return. Anyone paid to prepare tax returns for others 

should have a thorough understanding of tax matters. For 

more information on how to choose a tax preparer, go to 

Tips for Choosing a Tax Preparer on IRS.gov.

Coronavirus. Go to IRS.gov/Coronavirus for links to information on the impact of the coronavirus, as well as tax 

relief available for individuals and families, small and large 

businesses, and tax-exempt organizations.

Employers can register to use Business Services Online. The Social Security Administration (SSA) offers online service at SSA.gov/employer for fast, free, and secure 

Page 46 Publication 15 (2022)
online W-2 filing options to CPAs, accountants, enrolled 

agents, and individuals who process Form W-2, Wage 

and Tax Statement, and Form W-2c, Corrected Wage and 

Tax Statement.

IRS social media. Go to IRS.gov/SocialMedia to see the 

various social media tools the IRS uses to share the latest 

information on tax changes, scam alerts, initiatives, products, and services. At the IRS, privacy and security are 

our highest priority. We use these tools to share public information with you. Don’t post your social security number 

(SSN) or other confidential information on social media 

sites. Always protect your identity when using any social 

networking site.

The following IRS YouTube channels provide short, informative videos on various tax-related topics in English, 

Spanish, and ASL.

• Youtube.com/irsvideos.

• Youtube.com/irsvideosmultilingua.

• Youtube.com/irsvideosASL.

Watching IRS videos. The IRS Video portal 

(IRSVideos.gov) contains video and audio presentations 

for individuals, small businesses, and tax professionals.

Online tax information in other languages. You can 

find information on IRS.gov/MyLanguage if English isn’t 

your native language.

Free Over-the-Phone Interpreter (OPI) Service. The 

IRS is committed to serving our multilingual customers by 

offering OPI services. The OPI Service is a federally funded program and is available at Taxpayer Assistance 

Centers (TACs), other IRS offices, and every VITA/TCE 

return site. The OPI Service is accessible in more than 

350 languages.

Accessibility Helpline available for taxpayers with 

disabilities. Taxpayers who need information about accessibility services can call 833-690-0598. The Accessibility Helpline can answer questions related to current and 

future accessibility products and services available in alternative media formats (for example, braille, large print, 

audio, etc.).

Getting tax forms and publications. Go to IRS.gov/

Forms to view, download, or print most of the forms, instructions, and publications you may need. Or, you can go 

to IRS.gov/OrderForms to place an order.

Getting tax publications and instructions in eBook 

format. You can also download and view popular tax 

publications and instructions (including Pubs. 15, 15-A, 

15-B, 51, 80, 509, and 926) on mobile devices as eBooks 

at IRS.gov/eBooks.

Note. IRS eBooks have been tested using Apple's 

iBooks for iPad. Our eBooks haven’t been tested on other 

dedicated eBook readers, and eBook functionality may 

not operate as intended.

Getting a transcript of your return. You can get a 

copy of your tax transcript or a copy of your return by calling 800-829-4933 or by mailing Form 4506-T (transcript 

request) or Form 4506 (copy of return) to the IRS.

Reporting and resolving your tax-related identity 

theft issues. 

• Tax-related identity theft happens when someone 

steals your personal information to commit tax fraud. 

Your taxes can be affected if your EIN is used to file a 

fraudulent return or to claim a refund or credit.

• The IRS doesn’t initiate contact with taxpayers by 

email, text messages, telephone calls, or social media 

channels to request personal or financial information. 

This includes requests for personal identification numbers (PINs), passwords, or similar information for 

credit cards, banks, or other financial accounts.

• Go to IRS.gov/IdentityTheft, the IRS Identity Theft 

Central webpage, for information on identity theft and 

data security protection for taxpayers, tax professionals, and businesses. If your SSN has been lost or 

stolen or you suspect you’re a victim of tax-related 

identity theft, you can learn what steps you should 

take.

Making a tax payment. Go to IRS.gov/Payments for information on how to make a payment using any of the following options.

• Debit or Credit Card: Choose an approved payment 

processor to pay online or by phone.

• Electronic Funds Withdrawal: Schedule a payment 

when filing your federal taxes using tax return preparation software or through a tax professional.

• Electronic Federal Tax Payment System: Best option 

for businesses. Enrollment is required.

• Check or Money Order: Mail your payment to the address listed on the notice or instructions.

• Cash: You may be able to pay your taxes with cash at 

a participating retail store.

• Same-Day Wire: You may be able to do same-day 

wire from your financial institution. Contact your financial institution for availability, cost, and time frames.

Note. The IRS uses the latest encryption technology to 

ensure that the electronic payments you make online, by 

phone, or from a mobile device using the IRS2Go app are 

safe and secure. Paying electronically is quick, easy, and 

faster than mailing in a check or money order

What if I can’t pay now? Go to IRS.gov/Payments for 

more information about your options.

• Apply for an online payment agreement (IRS.gov/

OPA) to meet your tax obligation in monthly installments if you can’t pay your taxes in full today. Once 

you complete the online process, you will receive immediate notification of whether your agreement has 

been approved.

Publication 15 (2022) Page 47
• Use the Offer in Compromise Pre-Qualifier to see if 

you can settle your tax debt for less than the full 

amount you owe. For more information on the Offer in 

Compromise program, go to IRS.gov/OIC.

Understanding an IRS notice or letter you’ve received. Go to IRS.gov/Notices to find additional information about responding to an IRS notice or letter.

Contacting your local IRS office. Keep in mind, many 

questions can be answered on IRS.gov without visiting an 

IRS TAC. Go to IRS.gov/LetUsHelp for the topics people 

ask about most. If you still need help, IRS TACs provide 

tax help when a tax issue can’t be handled online or by 

phone. All TACs now provide service by appointment, so 

you’ll know in advance that you can get the service you 

need without long wait times. Before you visit, go to 

IRS.gov/TACLocator to find the nearest TAC and to check 

hours, available services, and appointment options. Or, 

on the IRS2Go app, under the Stay Connected tab, 

choose the Contact Us option and click on “Local Offices.”

The Taxpayer Advocate Service (TAS) 

Is Here To Help You

What Is TAS?

TAS is an independent organization within the IRS that 

helps taxpayers and protects taxpayer rights. Their job is 

to ensure that every taxpayer is treated fairly and that you 

know and understand your rights under the Taxpayer Bill 

of Rights.

How Can You Learn About Your Taxpayer 

Rights?

The Taxpayer Bill of Rights describes 10 basic rights that 

all taxpayers have when dealing with the IRS. Go to 

TaxpayerAdvocate.IRS.gov to help you understand what 

these rights mean to you and how they apply. These are 

your rights. Know them. Use them.

What Can TAS Do for You?

TAS can help you resolve problems that you can’t resolve 

with the IRS. And their service is free. If you qualify for 

their assistance, you will be assigned to one advocate 

who will work with you throughout the process and will do 

everything possible to resolve your issue. TAS can help 

you if:

• Your problem is causing financial difficulty for you, 

your family, or your business;

• You face (or your business is facing) an immediate 

threat of adverse action; or

• You’ve tried repeatedly to contact the IRS but no one 

has responded, or the IRS hasn’t responded by the 

date promised.

How Can You Reach TAS?

TAS has offices in every state, the District of Columbia, 

and Puerto Rico. Your local advocate’s number is in your 

local directory and at TaxpayerAdvocate.IRS.gov/

Contact-Us. You can also call them at 877-777-4778.

How Else Does TAS Help Taxpayers?

TAS works to resolve large-scale problems that affect 

many taxpayers. If you know of one of these broad issues, 

report it to them at IRS.gov/SAMS.

TAS for Tax Professionals

TAS can provide a variety of information for tax professionals, including tax law updates and guidance, TAS programs, and ways to let TAS know about systemic problems you’ve seen in your practice.

Page 48 Publication 15 (2022)
To help us develop a more useful index, please let us know if you have ideas for index entries.

Index See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.

A

Accuracy of deposits rule 30

Additional Medicare Tax 25, 37

Adjustments 35

Aliens, nonresident 23, 26

Allocated tips 19

Archer MSAs 17

Assistance (See Tax help)

B

Backup withholding 7

Business expenses, employee 16

C

Calendar 9

Certified professional employer 

organizations (CPEOs) 3, 46

Change of business address or 

responsible party 8

Correcting employment taxes 36

Correcting errors (prior period 

adjustments) 36

Criminal prosecution 32

D

Delivery services, private 8

Depositing taxes:

Penalties 31

Rules 27

Differential wage payments 17

Disaster tax relief 3

E

E-file 33

Election worker 11

Electronic deposit requirement 30

Electronic Federal Tax Payment System 

(EFTPS) 30

Electronic filing 5, 33

Eligibility for employment 6

Employees defined 12

Employer identification number (EIN) 11

Employer responsibilities 7

E-news for payroll professionals 8

F

Family employees 13

Final return 34

Foreign persons treated as American 

employers 26

Form 944 32

Fringe benefits 17

FUTA tax 38

G

Government employers 11

H

Health insurance plans 17

Health savings accounts (HSAs) 17

Hiring new employees 6

Household employees 33

I

Identity protection services 18

Income tax withholding 21

Information returns 6

International social security

agreements 26

L

Long-term care insurance 17

Lookback period 27

M

Meals and lodging 17

Medicaid waiver payments 4

Medical care 17

Medical savings accounts (MSAs) 17

Medicare tax 25

Mileage 16

Monthly deposit schedule 28

Motion picture project employers 26

Moving expense reimbursement 3

N

New employees 6

Noncash wages 16

Nonemployee compensation 7

O

Outsourcing payroll duties 3

P

Part-time workers 26

Payroll period 21

Payroll service provider (PSP) 45

Penalties 31, 33

Private delivery services (PDSs) 8

Publications (See Tax help)

Q

Qualified small business payroll tax 

credit for increasing research 

activities 3

R

Reconciling Forms W-2 and Forms 941 or 

Form 944 34

Recordkeeping 7

Reimbursements 16

Repayments, wages 37

Reporting agent 45

S

Seasonal employers 33

Semiweekly deposit schedule 28

Severance payments 4

Sick pay 18

Social security and Medicare taxes 25

Social security number, employee 14

Spouse 13

Standard mileage rate 16

Statutory employees 12

Statutory nonemployees 12

Successor employer 25, 38

Supplemental wages 20

T

Tax help 46

Telephone help 8

Third-party payer arrangements 45

Third-party sick pay tax adjustment 35

Tip rate determination agreement 19

Tip rate determination and education 

program 19

Tips 19, 21

Trust fund recovery penalty 31

U

Unemployment tax, federal 38

V

Vacation pay 21

W

Wage repayments 37

Wages defined 15

Wages not paid in money 16

Withholding:

Backup 7

Certificate 22

Exemption 23

Fringe benefits 18

Income tax 21

Levies 25

Nonresident aliens 26

Pensions and annuities 6

Social security and Medicare taxes 25

Tips 21

Z

Zero wage return 5

Publication 15 (2022) Page 49