Withhold federal income tax from each payment of wages subject to income tax withholding based on information provided by the employee on Form W-4. See Publication 15 for withholding tables and detailed instructions. Paying tax without withholding Any tax you are paying for your employee without withholding it from the employee's wages must be treated as additional wages paid to the employee. Reporting and paying withheld federal income tax You will generally report and pay federal income tax you withhold from wages you pay to your household employees in 1995 with your annual Form 1040. For more information, see Reporting and Paying Employment Taxes, later.
Most employers pay both a state and federal unemployment tax.
However, even if you are exempt from the state tax, you may still have to pay the federal tax. You, as the employer, must pay this tax. Do not withhold it from your employee's wages. The threshhold for paying FUTA taxes is different from that of FICA taxes. See Publication 926.