433:, "Employee's Withholding Allowance Certificate." Most states will accept the W4 form, but a few have a similar form, especially if the employee is filing different information at the state level than at the federal (an employee may be paying a different amount in withholding or claiming a different number of exemptions at the state level than the federal level). The form provides the employer with a Social Security number. Also, on the form employees declare the number of withholding allowances they believe they are entitled to. Allowances are generally based on the number of personal exemptions plus an amount for
39:
422:
withholding tables apply separately at the federal, most state, and some local levels. The amount to be withheld is based on both the amount wages paid on any paycheck and the period covered by the paycheck. Federal and some state withholding amounts are at graduated rates, so higher wages have higher withholding percentages. Withheld income taxes are treated by employees as a payment on account of tax due for the year, which is determined on the annual income tax return filed after the end of the year (federal
291:
643:
New provisions, to be effective after 2012, expand withholding requirement to include purchasers of stocks and bonds. The new rules apply to payments to foreign financial institutions and foreign entities. Withholding taxes covered by the new provisions are considered prepayments subject to potential
514:
Withheld taxes must be paid to the appropriate government promptly. Rules vary by jurisdiction and by balance of total payments due. Federal employment tax payments are due either monthly or semi-weekly. Federal tax payments must be made either by deposit to a national bank or by electronic funds
459:
Companies and individuals who make certain types of payments to foreign persons must withhold federal income tax on those payments. Foreign persons include nonresident aliens, foreign corporations, and foreign partnerships. Payments subject to withholding include compensation for services, interest,
444:
each year by any one employee are not subject to Social
Security tax. For 2023, this wage maximum is $ 160,200. Medicare tax of 1.45% is withheld from wages, with no maximum. (This brings the total federal payroll tax withholding to 7.65%.) Employers are required to pay an additional equal amount of
421:
Income tax withheld on wages is based on the amount of wages less an amount for declared withholding allowances (often called exemptions). Withholding for allowances are calculated based on the assumption of a full year of wages. Amounts of tax withheld are determined by the employer. Tax rates and
350:
The amount of tax withheld is based on the amount of payment subject to tax. Withholding of tax on wages includes income tax, social security and medicare, and a few taxes in some states. Certain minimum amounts of wage income are not subject to income tax withholding. Wage withholding is based on
467:
In addition, partnerships are required to make tax payments (referred to as withholding) on behalf of foreign partners. These payments are required regardless of whether income is actually distributed to the partner. Payments are also required quarterly or at year end for business income or other
515:
transfer. If the balance of federal tax payments exceeds $ 100,000, it must be paid within one banking day. Beginning
January 1, 2011, payments may be made only by electronic funds transfer. State rules vary widely, and generally allow slightly more time for deposit of withheld taxes.
396:
This greatly eased the collection of the tax for both the taxpayer and the Bureau of
Internal Revenue. However, it also greatly reduced the taxpayer's awareness of the amount of tax being collected, i.e. it reduced the transparency of the tax, which made it easier to raise taxes in the
589:
Paying withheld
Federal taxes late may result in penalties up to 10%, plus interest, on the balance paid late. State penalties vary. Failure to timely file withholding tax forms may result in penalties up to $ 50 per form not filed.
534:
All persons withholding taxes must file annual
Federal and state reports of the tax withheld and the amount subject to withholding. A copy must be provided to the employee or other payee. The relevant forms are as follows:
585:
Failing to pay
Federal taxes withheld can result in a penalty of 100% of the amount not paid. This may be assessed against anyone responsible for the funds from which payment of withheld tax could have been made.
576:
Federal filings must be done electronically if more than 250 forms are required. States generally do not require separate filings other than for partnerships, instead relying on information provided by the IRS.
489:
Payers of interest, dividends, and certain other items must withhold 28% Federal income tax on such payments in limited circumstances. Generally, this applies only if the recipient is a U.S. person, and either
358:
Amounts withheld by payers (employers or others) must be remitted to the relevant government promptly. Amounts subject to withholding and taxes withheld are reported to payees and the government annually.
471:
Purchasers of U.S. real estate must withhold 10% of the sales price from payments to foreign sellers. This amount can be reduced to the anticipated federal income tax due, upon advance application on
468:
undistributed income. Partnership payments on business income are treated like estimated tax payments, and the foreign person must still file a U.S. tax return reporting the business income.
451:
Wages are defined somewhat differently for different withholding tax purposes. Thus, federal income tax wages may differ from Social
Security wages which may differ from state wages.
527:, with the Internal Revenue Service. This report includes income, Social Security, and Medicare tax totals for the quarter. Partnerships making payments for partners must file
475:
to the
Internal Revenue Service. These payments are treated like estimated tax payments, and the foreign person must still file a U.S. tax return reporting any gain or loss.
460:
dividends, rents, royalties, annuities, and certain other payments. Tax is withheld at 30% of the gross amount of the payment. This withholding rate may be reduced under a
406:
In the US, withholding by employers of tax on wages is required by the federal, most state, and some local governments. Taxes withheld include federal income tax,
899:
563:
553:
543:
524:
464:. This tax withheld is usually considered a final determination and payment of tax, requiring no further action or tax return by the foreign person.
120:
1010:
60:
681:
319:
277:
200:
667:, which includes withholding tables for income tax. State requirements vary by state; for an example, see the New York state portal for
970:
195:
150:
95:
65:
368:
221:
175:
429:
Under
Internal Revenue Code section 3402(f)(2) and related U.S. Treasury regulations, an employee must provide the employer with a
180:
145:
85:
617:
602:
407:
378:
90:
75:
70:
437:, losses, or credits. Employers are entitled to rely on employee declarations on Form W-4 unless they know they are wrong.
355:. Social Security tax withholding terminates when payments from one employer exceed the maximum wage base during the year.
185:
163:
80:
48:
30:
237:
115:
389:
252:
1015:
125:
903:
716:
705:
441:
312:
851:
623:
612:
542:
for wages (the
Federal report is also used for states), due to employees by January 31. A summary is filed on
502:
411:
100:
440:
Social Security tax is withheld from wages at a flat rate of 6.2% (4.2% for 2011 and 2012). Wages paid above
135:
55:
374:
38:
22:
105:
305:
295:
232:
262:
227:
685:
562:
for partnership payments, due at the same time as the partnership return. A summary is filed on
484:
434:
426:
series, and appropriate state forms). Withholdings in excess of tax so determined are refunded.
974:
794:"Topic No. 751 Social Security and Medicare Withholding Rates | Internal Revenue Service"
781:
415:
170:
272:
257:
130:
1004:
607:
140:
110:
944:
932:
920:
916:
886:
882:
839:
827:
815:
769:
552:
for payments to foreign persons, due to payees by March 15. A summary is filed on
862:
749:
760:
See generally 26 C.F.R. sec. 31.3402(f)(5)-1 and 26 C.F.R. sec. 31.3402(f)(2)-1.
988:
377:
introduced payroll withholding and quarterly tax payments with the vote of the
992:
461:
213:
472:
948:
569:
559:
549:
528:
423:
793:
728:
740:
Current federal tables and withholding rates appear in IRS Publication 15.
664:
668:
539:
495:
430:
352:
247:
523:
Employers must file a quarterly report of aggregate withholding taxes,
448:
Many states also impose additional taxes that are withheld from wages.
267:
242:
190:
644:
refund. See sections 501-513, adding new 26 USC sections 1471-1474.
351:
wages actually paid and employee declarations on federal and state
494:
the person has failed to provide a tax identification number on
505:(IRS) has notified the payer that the payer must withhold.
445:
Medicare taxes, and a 6.2% rate of Social Security taxes.
782:
Payroll Tax Cut to Boost Take-Home Pay for Most Workers
593:
Intentional failures may result in criminal penalties.
900:"Helpful Hints for Partnerships With Foreign Partners"
336:
are imposed at various levels in the United States:
343:
Withholding tax on payments to foreign persons, and
971:"New Proposed Electronic Deposit Requirements"
684:. U.S. Department of Treasury. Archived from
346:Backup withholding on dividends and interest.
313:
8:
418:, and certain other levies by a few states.
455:Withholding on payments to foreign persons
320:
306:
17:
663:See U.S. Internal Revenue Service (IRS)
656:
636:
29:
531:quarterly. State requirements vary.
7:
14:
369:History of United States taxation
222:Automated payment transaction tax
682:"History of the U.S. Tax System"
289:
86:Generation-skipping transfer tax
37:
618:Social Security (United States)
603:Income tax in the United States
379:Current Tax Payment Act of 1943
386:History of the U.S. Tax System
101:Internal Revenue Service (IRS)
1:
1011:Taxation in the United States
186:State and local tax deduction
31:Taxation in the United States
238:Efficient Taxation of Income
519:Reporting of withheld taxes
392:describes tax withholding.
390:U.S. Department of Treasury
106:Internal Revenue Code (IRC)
1032:
482:
366:
510:Payment of withheld taxes
624:United States v. Gotcher
613:Medicare (United States)
503:Internal Revenue Service
296:United States portal
164:State and local taxation
126:Constitutional authority
21:This article is part of
960:See IRS Publication 15.
340:Wage withholding taxes,
56:Alternative minimum tax
993:Form 1099 instructions
572:for backup withholding
399:
253:Hall–Rabushka flat tax
989:Form W-2 instructions
394:
373:During World War II,
367:Further information:
278:Border-adjustment tax
402:Withholding on wages
233:Competitive Tax Plan
863:IRS Publication 515
729:IRS Publication 919
435:itemized deductions
332:Three key types of
263:Taxpayer Choice Act
485:Backup withholding
479:Backup withholding
214:Federal tax reform
1016:Withholding taxes
330:
329:
131:Taxpayer standing
61:Capital gains tax
1023:
996:
985:
979:
978:
973:. Archived from
967:
961:
958:
952:
949:Publication 1281
942:
936:
930:
924:
914:
908:
907:
902:. Archived from
896:
890:
880:
874:
871:
865:
860:
854:
852:26 USC 1441-1474
849:
843:
837:
831:
825:
819:
813:
807:
804:
798:
797:
790:
784:
779:
773:
767:
761:
758:
752:
747:
741:
738:
732:
725:
719:
717:26 USC 3101-3128
714:
708:
706:26 USC 3401-3406
703:
697:
696:
694:
693:
678:
672:
661:
645:
641:
570:Form 1099 series
498:to the payer, or
431:Federal Form W-4
416:state income tax
322:
315:
308:
294:
293:
292:
224:
201:State tax levels
171:State income tax
116:Revenue by state
49:Federal taxation
41:
18:
1031:
1030:
1026:
1025:
1024:
1022:
1021:
1020:
1001:
1000:
999:
986:
982:
969:
968:
964:
959:
955:
943:
939:
931:
927:
915:
911:
898:
897:
893:
881:
877:
872:
868:
861:
857:
850:
846:
838:
834:
826:
822:
814:
810:
805:
801:
792:
791:
787:
780:
776:
768:
764:
759:
755:
748:
744:
739:
735:
726:
722:
715:
711:
704:
700:
691:
689:
680:
679:
675:
669:withholding tax
662:
658:
654:
649:
648:
642:
638:
633:
599:
583:
540:Form W-2 series
521:
512:
487:
481:
457:
408:Social Security
404:
371:
365:
334:withholding tax
326:
290:
288:
283:
282:
273:Value added tax
258:Kemp Commission
220:
216:
206:
205:
166:
156:
155:
51:
12:
11:
5:
1029:
1027:
1019:
1018:
1013:
1003:
1002:
998:
997:
980:
977:on 2010-11-17.
962:
953:
937:
925:
909:
906:on 2003-04-04.
891:
875:
866:
855:
844:
840:26 USC 3121(a)
832:
828:26 USC 3401(a)
820:
808:
799:
785:
774:
762:
753:
742:
733:
720:
709:
698:
673:
665:Publication 15
655:
653:
650:
647:
646:
635:
634:
632:
629:
628:
627:
620:
615:
610:
605:
598:
595:
582:
579:
574:
573:
567:
557:
547:
520:
517:
511:
508:
507:
506:
499:
483:Main article:
480:
477:
456:
453:
442:a fixed amount
403:
400:
364:
361:
348:
347:
344:
341:
328:
327:
325:
324:
317:
310:
302:
299:
298:
285:
284:
281:
280:
275:
270:
265:
260:
255:
250:
245:
240:
235:
230:
225:
217:
212:
211:
208:
207:
204:
203:
198:
196:Land value tax
193:
188:
183:
178:
173:
167:
162:
161:
158:
157:
154:
153:
148:
143:
138:
133:
128:
123:
118:
113:
108:
103:
98:
93:
88:
83:
78:
73:
68:
63:
58:
52:
47:
46:
43:
42:
34:
33:
27:
26:
13:
10:
9:
6:
4:
3:
2:
1028:
1017:
1014:
1012:
1009:
1008:
1006:
994:
990:
984:
981:
976:
972:
966:
963:
957:
954:
950:
946:
941:
938:
934:
929:
926:
922:
918:
913:
910:
905:
901:
895:
892:
888:
884:
879:
876:
870:
867:
864:
859:
856:
853:
848:
845:
841:
836:
833:
829:
824:
821:
817:
812:
809:
803:
800:
795:
789:
786:
783:
778:
775:
771:
766:
763:
757:
754:
751:
746:
743:
737:
734:
730:
724:
721:
718:
713:
710:
707:
702:
699:
688:on 2010-12-04
687:
683:
677:
674:
670:
666:
660:
657:
651:
640:
637:
630:
626:
625:
621:
619:
616:
614:
611:
609:
608:IRS penalties
606:
604:
601:
600:
596:
594:
591:
587:
580:
578:
571:
568:
565:
561:
558:
555:
551:
548:
545:
541:
538:
537:
536:
532:
530:
526:
518:
516:
509:
504:
500:
497:
493:
492:
491:
486:
478:
476:
474:
469:
465:
463:
454:
452:
449:
446:
443:
438:
436:
432:
427:
425:
419:
417:
413:
409:
401:
398:
393:
391:
387:
382:
380:
376:
370:
362:
360:
356:
354:
345:
342:
339:
338:
337:
335:
323:
318:
316:
311:
309:
304:
303:
301:
300:
297:
287:
286:
279:
276:
274:
271:
269:
266:
264:
261:
259:
256:
254:
251:
249:
246:
244:
241:
239:
236:
234:
231:
229:
226:
223:
219:
218:
215:
210:
209:
202:
199:
197:
194:
192:
189:
187:
184:
182:
179:
177:
174:
172:
169:
168:
165:
160:
159:
152:
149:
147:
144:
142:
139:
137:
134:
132:
129:
127:
124:
122:
119:
117:
114:
112:
111:IRS tax forms
109:
107:
104:
102:
99:
97:
94:
92:
89:
87:
84:
82:
79:
77:
74:
72:
69:
67:
66:Corporate tax
64:
62:
59:
57:
54:
53:
50:
45:
44:
40:
36:
35:
32:
28:
24:
20:
19:
16:
983:
975:the original
965:
956:
940:
928:
912:
904:the original
894:
878:
869:
858:
847:
835:
823:
811:
806:26 USC 3101.
802:
788:
777:
765:
756:
745:
736:
723:
712:
701:
690:. Retrieved
686:the original
676:
659:
639:
622:
592:
588:
584:
575:
533:
522:
513:
488:
470:
466:
458:
450:
447:
439:
428:
420:
405:
395:
385:
383:
372:
357:
349:
333:
331:
176:Property tax
15:
945:26 USC 3406
933:26 USC 1445
921:26 USC 1446
917:26 USC 1441
887:26 USC 1442
883:26 USC 1441
816:26 USC 3111
770:26 USC 3102
550:Form 1042-S
473:Form 8288-B
96:Payroll tax
1005:Categories
947:. See IRS
692:2010-12-04
652:References
462:tax treaty
151:Resistance
91:Income tax
76:Excise tax
71:Estate tax
750:26 USC 31
581:Penalties
564:Form 8804
560:Form 8805
554:Form 1042
529:Form 8813
424:Form 1040
384:In their
353:Forms W-4
181:Sales tax
987:See IRS
597:See also
544:Form W-3
525:Form 941
496:Form W-9
412:Medicare
381: :
375:Congress
248:Flat tax
81:Gift tax
23:a series
414:taxes,
397:future.
363:History
268:USA Tax
243:FairTax
191:Use tax
146:Evasion
141:Protest
121:History
388:, the
631:Notes
228:9–9–9
136:Court
991:and
919:and
885:and
727:See
501:the
410:and
1007::
25:on
995:.
951:.
935:.
923:.
889:.
873:.
842:.
830:.
818:.
796:.
772:.
731:.
695:.
671:.
566:.
556:.
546:.
321:e
314:t
307:v
Text is available under the Creative Commons Attribution-ShareAlike License. Additional terms may apply.
