Evening star., 1943-06-24
The Poy-os-You-Go Tax
TobIes, Not Strictly 20% Figure,
Determine Amount to Be Withheld

for different wage brackets, and il
based on the average wage within
the particular bracket.
This difference Is shown In tn
following example:
Suppose the employe Is q marie,
man without dependents, who earn
$50 a week. If the employer com
putes the Withholding tax on al
exact basis. he will subtract tn
employees weekly exemption ($24
from his weekly pay $50, and o
the $26 difference 20 per cent, o.
$500, would be withheld.
If the employer uses the withhold
ing table applicable to weekly wag
payments, he will find that tn,
amount to be withheld in the cas-,
OF married man without depend
ents who earns $50 to $50 a week l!
$500. This happens to be 81 NOR,
than where the withholding is com
puted on an exact basis.
If the weekly wage had been IS!
(the average in the $50 to s6,
bracket. the amount withheld
would be the same under eithe,
method. II the wage had been $5s
the amount withheld under tn
withholding table ($6.20) would b,
slightly less than if the exact com
putati ton were made tin which cas-,
the tax would be $500.
No person is prejudiced by hav
ing a slightly greater or less amoun
withheld under the withholding ia
bles, since in any event the amour,
Is credited toward the ultimate liza.
bility for the year.
Taxpayer Who Paid 1912 Tax in Full
30. Question. Suppose a person
paid his 1912 tax in full last March
Is. In view of the fact that this
payment Is credited toward his l94s
liability. will the full withholding tax
still be collected from him?
Answer. If he is otherwise subject
to the Withholding tax, it will be
collected in full, Notwithstanding the
fact that to do so may result in an
overpayment of his tax. In such a
case he will be entitled to a refund
or credit on March IS, 1914, when
his final return for l943 is filed.
81. Question. What are the re-
sponsibilities OF employers under the
withholding tax?
Answer. They act as collecting
agents for the Government, making
the deductions from payrolls and
turning the money over to the Treas
ury. Collection of the tax under
the withholding provisions Is man.
datory on the employer, and penal
ties are imposed for failure to dc
any of the acts required upnder the
law.
30. Question. Who constitutes an
"employer" for purposes of the with.
holding provisions?
Answer. The term includes any
person or corporation for whom an
individual performs any. service as
an employe, excepting services OF
the nature referred to in connection
with Question g. An individual is
an employe If the relationship be-
tween him and the person for whom
he performs services is the legal
relationship of employer and en-
ploye.
If an individual is subject to the
control or direction of another
merely as to the result to be ac-
complished and not as to the means
and methods, he is regarded as an
independent contractor and not an
employe.,
Returns.
33. Question. How often will en-
ployers be required to file returns
and pay the withholding tax over
to the Treasury?
Answer. Under regulations pre-
scribed by the Commissioner OF In
ternal Revenue, returns must be
filed and amounts withheld paid tc
the collector on or before the last
day of the month following the close
OF each quarter Of the calen-
dar year. However, where the EN-.
ployer withholds more than Sl00 6
month, he is required by regulation
issued pursuant to the new law. tt
pay the money to a bank or trust
company which is a depositary OF
financial agent Of the United States
within 10 days after the close O.
each calendar month. (All bank.
insured by the Federal Deposit In
surance Corporation are eligible tc
qualify as Federal depositaries ano
financial agents)
Receipts will be issued by the
authorized depositaries for with.
holding taxes paid to them, ano
these should be attached to the
quarterly return when filed. With
holding funds collected for the las
month of the quarter may be paie
at the time of filing the return
rather than to the depositary, al
the election Of the employer.
The purpose of the monthly pay.
ments to Federal depoSitaries is tc
relieve employers of the necessity
of holding the withholding taxes fol
several months pending the filing
of quarterly returns. Employers may
obtain from their local bank the
names and locations of nearby Fed
eral depositaries and financia
agents.
Receipts for Amounts Withheld.
"a. Question. Are employers re-
quired to issue receipts to employees
covering the withholding tax?
Answer. Yes, but only one re-
ceipt a year. It must be furnished