In the event the W-4 does not provide sufficient personal exemptions to avoid withholding at a given compensation level, camps should consult IRS publications 515 and 519 for eligibility for treaty exemption. The United States is party to many treaties which exempt varying levels of compensation. Students studying in the United States on the F visa would be typical beneficiaries. W-2 forms, summarizing all withholding, must be delivered to all camp employees by January 31st of each year. Withheld income taxes are reported on IRS form 941, and are payable to the federal government monthly or semi-weekly, dependent upon the amount owed.
Many states impose state income tax, with independent withholding requirements.
Camps should check with their state department of revenue to determine liability and compliance procedures. No federal income tax withholding, FICA withholding, or FUTA payments apply to camp employment of independent contractors. There are objective and stringent criteria by which the IRS determines who is and who is not a legitimate independent contractor. Generally speaking, an independent contractor works under contract, provides his or her own equipment, and maintains total discretion in the details of how a particular service is provided. Independent contractors are typically in business for themselves.