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Amendment To 2010 Tax Return

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Amendment To 2010 Tax Return

Amendment to 2010 tax return 5. Amendment to 2010 tax return   How To Get Tax Help Table of Contents Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Amendment to 2010 tax return You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. Amendment to 2010 tax return By selecting the method that is best for you, you will have quick and easy access to tax help. Amendment to 2010 tax return Free help with your tax return. Amendment to 2010 tax return   You can get free help preparing your return nationwide from IRS-certified volunteers. Amendment to 2010 tax return The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Amendment to 2010 tax return The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Amendment to 2010 tax return Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Amendment to 2010 tax return In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Amendment to 2010 tax return To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Amendment to 2010 tax return gov, download the IRS2Go app, or call 1-800-906-9887. Amendment to 2010 tax return   As part of the TCE program, AARP offers the Tax-Aide counseling program. Amendment to 2010 tax return To find the nearest AARP Tax-Aide site, visit AARP's website at www. Amendment to 2010 tax return aarp. Amendment to 2010 tax return org/money/taxaide or call 1-888-227-7669. Amendment to 2010 tax return For more information on these programs, go to IRS. Amendment to 2010 tax return gov and enter “VITA” in the search box. Amendment to 2010 tax return Internet. Amendment to 2010 tax return    IRS. Amendment to 2010 tax return gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Amendment to 2010 tax return Download the free IRS2Go app from the iTunes app store or from Google Play. Amendment to 2010 tax return Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Amendment to 2010 tax return Check the status of your 2013 refund with the Where's My Refund? application on IRS. Amendment to 2010 tax return gov or download the IRS2Go app and select the Refund Status option. Amendment to 2010 tax return The IRS issues more than 9 out of 10 refunds in less than 21 days. Amendment to 2010 tax return Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Amendment to 2010 tax return You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Amendment to 2010 tax return The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Amendment to 2010 tax return Use the Interactive Tax Assistant (ITA) to research your tax questions. Amendment to 2010 tax return No need to wait on the phone or stand in line. Amendment to 2010 tax return The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Amendment to 2010 tax return When you reach the response screen, you can print the entire interview and the final response for your records. Amendment to 2010 tax return New subject areas are added on a regular basis. Amendment to 2010 tax return  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Amendment to 2010 tax return gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Amendment to 2010 tax return You can use the IRS Tax Map, to search publications and instructions by topic or keyword. Amendment to 2010 tax return The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. Amendment to 2010 tax return When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. Amendment to 2010 tax return Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. Amendment to 2010 tax return You can also ask the IRS to mail a return or an account transcript to you. Amendment to 2010 tax return Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. Amendment to 2010 tax return gov or by calling 1-800-908-9946. Amendment to 2010 tax return Tax return and tax account transcripts are generally available for the current year and the past three years. Amendment to 2010 tax return Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Amendment to 2010 tax return Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Amendment to 2010 tax return If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Amendment to 2010 tax return Check the status of your amended return using Where's My Amended Return? Go to IRS. Amendment to 2010 tax return gov and enter Where's My Amended Return? in the search box. Amendment to 2010 tax return You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Amendment to 2010 tax return It can take up to 3 weeks from the date you mailed it to show up in our system. Amendment to 2010 tax return Make a payment using one of several safe and convenient electronic payment options available on IRS. Amendment to 2010 tax return gov. Amendment to 2010 tax return Select the Payment tab on the front page of IRS. Amendment to 2010 tax return gov for more information. Amendment to 2010 tax return Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. Amendment to 2010 tax return Figure your income tax withholding with the IRS Withholding Calculator on IRS. Amendment to 2010 tax return gov. Amendment to 2010 tax return Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Amendment to 2010 tax return Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Amendment to 2010 tax return gov. Amendment to 2010 tax return Request an Electronic Filing PIN by going to IRS. Amendment to 2010 tax return gov and entering Electronic Filing PIN in the search box. Amendment to 2010 tax return Download forms, instructions and publications, including accessible versions for people with disabilities. Amendment to 2010 tax return Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Amendment to 2010 tax return gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Amendment to 2010 tax return An employee can answer questions about your tax account or help you set up a payment plan. Amendment to 2010 tax return Before you visit, check the Office Locator on IRS. Amendment to 2010 tax return gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Amendment to 2010 tax return If you have a special need, such as a disability, you can request an appointment. Amendment to 2010 tax return Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Amendment to 2010 tax return Apply for an Employer Identification Number (EIN). Amendment to 2010 tax return Go to IRS. Amendment to 2010 tax return gov and enter Apply for an EIN in the search box. Amendment to 2010 tax return Read the Internal Revenue Code, regulations, or other official guidance. Amendment to 2010 tax return Read Internal Revenue Bulletins. Amendment to 2010 tax return Sign up to receive local and national tax news and more by email. Amendment to 2010 tax return Just click on “subscriptions” above the search box on IRS. Amendment to 2010 tax return gov and choose from a variety of options. Amendment to 2010 tax return Phone. Amendment to 2010 tax return    You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Amendment to 2010 tax return Download the free IRS2Go app from the iTunes app store or from Google Play. Amendment to 2010 tax return Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. Amendment to 2010 tax return gov, or download the IRS2Go app. Amendment to 2010 tax return Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Amendment to 2010 tax return The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Amendment to 2010 tax return Most VITA and TCE sites offer free electronic filing. Amendment to 2010 tax return Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Amendment to 2010 tax return Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Amendment to 2010 tax return Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. Amendment to 2010 tax return If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Amendment to 2010 tax return The IRS issues more than 9 out of 10 refunds in less than 21 days. Amendment to 2010 tax return Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Amendment to 2010 tax return Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. Amendment to 2010 tax return The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Amendment to 2010 tax return Note, the above information is for our automated hotline. Amendment to 2010 tax return Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. Amendment to 2010 tax return Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Amendment to 2010 tax return You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Amendment to 2010 tax return It can take up to 3 weeks from the date you mailed it to show up in our system. Amendment to 2010 tax return Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). Amendment to 2010 tax return You should receive your order within 10 business days. Amendment to 2010 tax return Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. Amendment to 2010 tax return If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. Amendment to 2010 tax return Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Amendment to 2010 tax return The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Amendment to 2010 tax return These individuals can also contact the IRS through relay services such as the Federal Relay Service. Amendment to 2010 tax return Mail. Amendment to 2010 tax return   You can send your order for forms, instructions, and publications to the address below. Amendment to 2010 tax return You should receive a response within 10 business days after your request is received. Amendment to 2010 tax return Internal Revenue Service 1201 N. Amendment to 2010 tax return Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. Amendment to 2010 tax return The Taxpayer Advocate Service (TAS) is your voice at the IRS. Amendment to 2010 tax return Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Amendment to 2010 tax return   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. Amendment to 2010 tax return We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Amendment to 2010 tax return You face (or your business is facing) an immediate threat of adverse action. Amendment to 2010 tax return You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Amendment to 2010 tax return   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Amendment to 2010 tax return Here's why we can help: TAS is an independent organization within the IRS. Amendment to 2010 tax return Our advocates know how to work with the IRS. Amendment to 2010 tax return Our services are free and tailored to meet your needs. Amendment to 2010 tax return We have offices in every state, the District of Columbia, and Puerto Rico. Amendment to 2010 tax return   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. Amendment to 2010 tax return irs. Amendment to 2010 tax return gov/Advocate, or call us toll-free at 1-877-777-4778. Amendment to 2010 tax return   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Amendment to 2010 tax return If you know of one of these broad issues, please report it to us through our Systemic Advisory Management System at www. Amendment to 2010 tax return irs. Amendment to 2010 tax return gov/Advocate/Systemic-Advocacy-Management-System-SAMS. Amendment to 2010 tax return Low Income Taxpayer Clinics. Amendment to 2010 tax return    Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals and tax collection disputes. Amendment to 2010 tax return Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Amendment to 2010 tax return Visit www. Amendment to 2010 tax return irs. Amendment to 2010 tax return gov/Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. Amendment to 2010 tax return Prev  Up  Next   Home   More Online Publications
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Contact My Local Office in South Dakota

Face-to-face Tax Help

IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
• Get a transcript of your tax return.
• Make a payment.
• Check on your refund.
• Find answers to many of your tax questions.

We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.

If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.

Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.

City  Street Address  Days/Hours of Service  Telephone* 
Aberdeen  115 Fourth Ave. S.E.
Aberdeen, SD 57401 

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 11:00 a.m. - 12:00 noon)

 

Services Provided

(605) 226-7273 
Rapid City  515 Ninth St.
Rapid City, SD 57701 

Monday-Friday - 8:30 a.m.- 4:30 p.m. 
(Closed for lunch 1:00 p.m. - 2:00 p.m.)

 

Services Provided

(605) 348-2006 
Sioux Falls  1720 S. Southeastern Ave.
Sioux Falls, SD 57103 

Monday-Friday - 8:30 a.m.-4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(605) 330-4539 

* Note: The phone numbers in the chart above are not toll-free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If  face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses).

For information on where to file your tax return please see Where to File Addresses.

The Taxpayer Advocate Service: Call (605) 377-1600 in Aberdeen or 1-877-777-4778 elsewhere, or see  Publication 1546, The Taxpayer Advocate Service of the IRS.

For further information, see  Tax Topic 104

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:

Internal Revenue Service
115 4th Ave. SE
Aberdeen, SD 57401

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 28-Mar-2014

The Amendment To 2010 Tax Return

Amendment to 2010 tax return Publication 15-A - Main Content Table of Contents 1. Amendment to 2010 tax return Who Are Employees?Independent Contractors Common-Law Employees Statutory Employees Statutory Nonemployees Misclassification of Employees 2. Amendment to 2010 tax return Employee or Independent Contractor?Common-Law Rules Industry Examples 3. Amendment to 2010 tax return Employees of Exempt OrganizationsSocial security and Medicare taxes. Amendment to 2010 tax return FUTA tax. Amendment to 2010 tax return 4. Amendment to 2010 tax return Religious Exemptions and Special Rules for MinistersForm W-2. Amendment to 2010 tax return Self-employed. Amendment to 2010 tax return Employees. Amendment to 2010 tax return 5. Amendment to 2010 tax return Wages and Other CompensationRelocating for Temporary Work Assignments Employee Achievement Awards Scholarship and Fellowship Payments Outplacement Services Withholding for Idle Time Back Pay Supplemental Unemployment Benefits Golden Parachute Payments Interest-Free and Below-Market-Interest-Rate Loans Leave Sharing Plans Nonqualified Deferred Compensation Plans Tax-Sheltered Annuities Contributions to a Simplified Employee Pension (SEP) SIMPLE Retirement Plans 6. Amendment to 2010 tax return Sick Pay ReportingSick Pay Payments That Are Not Sick Pay Sick Pay Plan Third-Party Payers of Sick Pay Social Security, Medicare, and FUTA Taxes on Sick Pay Income Tax Withholding on Sick Pay Depositing and Reporting Example of Figuring and Reporting Sick Pay 7. Amendment to 2010 tax return Special Rules for Paying TaxesCommon Paymaster Agents Reporting Agents Employee's Portion of Taxes Paid by Employer International Social Security Agreements 8. Amendment to 2010 tax return Pensions and AnnuitiesFederal Income Tax Withholding 9. Amendment to 2010 tax return Alternative Methods for Figuring WithholdingTerm of continuous employment. Amendment to 2010 tax return Formula Tables for Percentage Method Withholding (for Automated Payroll Systems) Wage Bracket Percentage Method Tables (for Automated Payroll Systems) Combined Federal Income Tax, Employee Social Security Tax, and Employee Medicare Tax Withholding Tables 10. Amendment to 2010 tax return Tables for Withholding on Distributions of Indian Gaming Profits to Tribal MembersWithholding Tables How To Get Tax Help 1. Amendment to 2010 tax return Who Are Employees? Before you can know how to treat payments that you make to workers for services, you must first know the business relationship that exists between you and the person performing the services. Amendment to 2010 tax return The person performing the services may be: An independent contractor, A common-law employee, A statutory employee, or A statutory nonemployee. Amendment to 2010 tax return This discussion explains these four categories. Amendment to 2010 tax return A later discussion, Employee or Independent Contractor in section 2, points out the differences between an independent contractor and an employee and gives examples from various types of occupations. Amendment to 2010 tax return If an individual who works for you is not an employee under the common-law rules (see section 2), you generally do not have to withhold federal income tax from that individual's pay. Amendment to 2010 tax return However, in some cases you may be required to withhold under the backup withholding requirements on these payments. Amendment to 2010 tax return See Publication 15 (Circular E) for information on backup withholding. Amendment to 2010 tax return Independent Contractors People such as doctors, veterinarians, and auctioneers who follow an independent trade, business, or profession in which they offer their services to the public, are generally not employees. Amendment to 2010 tax return However, whether such people are employees or independent contractors depends on the facts in each case. Amendment to 2010 tax return The general rule is that an individual is an independent contractor if you, the person for whom the services are performed, have the right to control or direct only the result of the work and not the means and methods of accomplishing the result. Amendment to 2010 tax return Common-Law Employees Under common-law rules, anyone who performs services for you is generally your employee if you have the right to control what will be done and how it will be done. Amendment to 2010 tax return This is so even when you give the employee freedom of action. Amendment to 2010 tax return What matters is that you have the right to control the details of how the services are performed. Amendment to 2010 tax return For a discussion of facts that indicate whether an individual providing services is an independent contractor or employee, see section 2. Amendment to 2010 tax return If you have an employer-employee relationship, it makes no difference how it is labeled. Amendment to 2010 tax return The substance of the relationship, not the label, governs the worker's status. Amendment to 2010 tax return It does not matter whether the individual is employed full time or part time. Amendment to 2010 tax return For employment tax purposes, no distinction is made between classes of employees. Amendment to 2010 tax return Superintendents, managers, and other supervisory personnel are all employees. Amendment to 2010 tax return An officer of a corporation is generally an employee; however, an officer who performs no services or only minor services, and neither receives nor is entitled to receive any pay, is not considered an employee. Amendment to 2010 tax return A director of a corporation is not an employee with respect to services performed as a director. Amendment to 2010 tax return You generally have to withhold and pay income, social security, and Medicare taxes on wages that you pay to common-law employees. Amendment to 2010 tax return However, the wages of certain employees may be exempt from one or more of these taxes. Amendment to 2010 tax return See Employees of Exempt Organizations (section 3) and Religious Exemptions and Special Rules for Ministers (section 4). Amendment to 2010 tax return Leased employees. Amendment to 2010 tax return   Under certain circumstances, a firm that furnishes workers to other firms is the employer of those workers for employment tax purposes. Amendment to 2010 tax return For example, a temporary staffing service may provide the services of secretaries, nurses, and other similarly trained workers to its clients on a temporary basis. Amendment to 2010 tax return   The staffing service enters into contracts with the clients under which the clients specify the services to be provided and a fee is paid to the staffing service for each individual furnished. Amendment to 2010 tax return The staffing service has the right to control and direct the worker's services for the client, including the right to discharge or reassign the worker. Amendment to 2010 tax return The staffing service hires the workers, controls the payment of their wages, provides them with unemployment insurance and other benefits, and is the employer for employment tax purposes. Amendment to 2010 tax return For information on employee leasing as it relates to pension plan qualification requirements, see Leased employee in Publication 560, Retirement Plans for Small Business. Amendment to 2010 tax return Additional information. Amendment to 2010 tax return   For more information about the treatment of special types of employment, the treatment of special types of payments, and similar subjects, see Publication 15 (Circular E) or Publication 51 (Circular A), Agricultural Employer's Tax Guide. Amendment to 2010 tax return Statutory Employees If workers are independent contractors under the common law rules, such workers may nevertheless be treated as employees by statute, (also known as “statutory employees”) for certain employment tax purposes. Amendment to 2010 tax return This would happen if they fall within any one of the following four categories and meet the three conditions described next under Social security and Medicare taxes . Amendment to 2010 tax return A driver who distributes beverages (other than milk) or meat, vegetable, fruit, or bakery products; or who picks up and delivers laundry or dry cleaning, if the driver is your agent or is paid on commission. Amendment to 2010 tax return A full-time life insurance sales agent whose principal business activity is selling life insurance or annuity contracts, or both, primarily for one life insurance company. Amendment to 2010 tax return An individual who works at home on materials or goods that you supply and that must be returned to you or to a person you name, if you also furnish specifications for the work to be done. Amendment to 2010 tax return A full-time traveling or city salesperson who works on your behalf and turns in orders to you from wholesalers, retailers, contractors, or operators of hotels, restaurants, or other similar establishments. Amendment to 2010 tax return The goods sold must be merchandise for resale or supplies for use in the buyer's business operation. Amendment to 2010 tax return The work performed for you must be the salesperson's principal business activity. Amendment to 2010 tax return See Salesperson in section 2. Amendment to 2010 tax return Social security and Medicare taxes. Amendment to 2010 tax return   You must withhold social security and Medicare taxes from the wages of statutory employees if all three of the following conditions apply. Amendment to 2010 tax return The service contract states or implies that substantially all the services are to be performed personally by them. Amendment to 2010 tax return They do not have a substantial investment in the equipment and property used to perform the services (other than an investment in facilities for transportation, such as a car or truck). Amendment to 2010 tax return The services are performed on a continuing basis for the same payer. Amendment to 2010 tax return Federal unemployment (FUTA) tax. Amendment to 2010 tax return   For FUTA tax (the unemployment tax paid under the Federal Unemployment Tax Act), the term “employee” means the same as it does for social security and Medicare taxes, except that it does not include statutory employees defined above in categories 2 and 3. Amendment to 2010 tax return Any individual who is a statutory employee described above under category 1 or 4 is also an employee for FUTA tax purposes and subject to FUTA tax. Amendment to 2010 tax return Income tax. Amendment to 2010 tax return   Do not withhold federal income tax from the wages of statutory employees. Amendment to 2010 tax return Reporting payments to statutory employees. Amendment to 2010 tax return   Furnish Form W-2 to a statutory employee, and check “Statutory employee” in box 13. Amendment to 2010 tax return Show your payments to the employee as “other compensation” in box 1. Amendment to 2010 tax return Also, show social security wages in box 3, social security tax withheld in box 4, Medicare wages in box 5, and Medicare tax withheld in box 6. Amendment to 2010 tax return The statutory employee can deduct his or her trade or business expenses from the payments shown on Form W-2. Amendment to 2010 tax return He or she reports earnings as a statutory employee on line 1 of Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Amendment to 2010 tax return A statutory employee's business expenses are deductible on Schedule C (Form 1040) or C-EZ (Form 1040) and are not subject to the reduction by 2% of his or her adjusted gross income that applies to common-law employees. Amendment to 2010 tax return H-2A agricultural workers. Amendment to 2010 tax return   On Form W-2, do not check box 13 (Statutory employee), as H-2A workers are not statutory employees. Amendment to 2010 tax return Statutory Nonemployees There are three categories of statutory nonemployees: direct sellers, licensed real estate agents, and certain companion sitters. Amendment to 2010 tax return Direct sellers and licensed real estate agents are treated as self-employed for all federal tax purposes, including income and employment taxes, if: Substantially all payments for their services as direct sellers or real estate agents are directly related to sales or other output, rather than to the number of hours worked, and Their services are performed under a written contract providing that they will not be treated as employees for federal tax purposes. Amendment to 2010 tax return Direct sellers. Amendment to 2010 tax return   Direct sellers include persons falling within any of the following three groups. Amendment to 2010 tax return Persons engaged in selling (or soliciting the sale of) consumer products in the home or place of business other than in a permanent retail establishment. Amendment to 2010 tax return Persons engaged in selling (or soliciting the sale of) consumer products to any buyer on a buy-sell basis, a deposit-commission basis, or any similar basis prescribed by regulations, for resale in the home or at a place of business other than in a permanent retail establishment. Amendment to 2010 tax return Persons engaged in the trade or business of delivering or distributing newspapers or shopping news (including any services directly related to such delivery or distribution). Amendment to 2010 tax return   Direct selling includes activities of individuals who attempt to increase direct sales activities of their direct sellers and who earn income based on the productivity of their direct sellers. Amendment to 2010 tax return Such activities include providing motivation and encouragement; imparting skills, knowledge, or experience; and recruiting. Amendment to 2010 tax return Licensed real estate agents. Amendment to 2010 tax return   This category includes individuals engaged in appraisal activities for real estate sales if they earn income based on sales or other output. Amendment to 2010 tax return Companion sitters. Amendment to 2010 tax return   Companion sitters are individuals who furnish personal attendance, companionship, or household care services to children or to individuals who are elderly or disabled. Amendment to 2010 tax return A person engaged in the trade or business of putting the sitters in touch with individuals who wish to employ them (that is, a companion sitting placement service) will not be treated as the employer of the sitters if that person does not receive or pay the salary or wages of the sitters and is compensated by the sitters or the persons who employ them on a fee basis. Amendment to 2010 tax return Companion sitters who are not employees of a companion sitting placement service are generally treated as self-employed for all federal tax purposes. Amendment to 2010 tax return Misclassification of Employees Consequences of treating an employee as an independent contractor. Amendment to 2010 tax return   If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you are liable for employment taxes for that worker and the relief provision, discussed next, will not apply. Amendment to 2010 tax return See section 2 in Publication 15 (Circular E) for more information. Amendment to 2010 tax return Relief provision. Amendment to 2010 tax return   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. Amendment to 2010 tax return To get this relief, you must file all required federal information returns on a basis consistent with your treatment of the worker. Amendment to 2010 tax return You (or your predecessor) must not have treated any worker holding a substantially similar position as an employee for any periods beginning after 1977. Amendment to 2010 tax return Technical service specialists. Amendment to 2010 tax return   This relief provision does not apply for a technical services specialist you provide to another business under an arrangement between you and the other business. Amendment to 2010 tax return A technical service specialist is an engineer, designer, drafter, computer programmer, systems analyst, or other similarly skilled worker engaged in a similar line of work. Amendment to 2010 tax return   This limit on the application of the rule does not affect the determination of whether such workers are employees under the common-law rules. Amendment to 2010 tax return The common-law rules control whether the specialist is treated as an employee or an independent contractor. Amendment to 2010 tax return However, if you directly contract with a technical service specialist to provide services for your business and not for another business, you may still be entitled to the relief provision. Amendment to 2010 tax return Test proctors and room supervisors. Amendment to 2010 tax return   The consistent treatment requirement does not apply to services performed after December 31, 2006, by an individual as a test proctor or room supervisor assisting in the administration of college entrance or placement examinations if the individual: Is performing the services for a section 501(c) organization exempt from tax under section 501(a) of the code, and Is not otherwise treated as an employee of the organization for employment taxes. Amendment to 2010 tax return Voluntary Classification Settlement Program (VCSP). Amendment to 2010 tax return   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. Amendment to 2010 tax return To apply, use Form 8952, Application for Voluntary Classification Settlement Program (VCSP). Amendment to 2010 tax return For more information, visit IRS. Amendment to 2010 tax return gov and enter “VCSP” in the search box. Amendment to 2010 tax return 2. Amendment to 2010 tax return Employee or Independent Contractor? An employer must generally withhold federal income taxes, withhold and pay over social security and Medicare taxes, and pay unemployment tax on wages paid to an employee. Amendment to 2010 tax return An employer does not generally have to withhold or pay over any federal taxes on payments to independent contractors. Amendment to 2010 tax return Common-Law Rules To determine whether an individual is an employee or an independent contractor under the common law, the relationship of the worker and the business must be examined. Amendment to 2010 tax return In any employee-independent contractor determination, all information that provides evidence of the degree of control and the degree of independence must be considered. Amendment to 2010 tax return Facts that provide evidence of the degree of control and independence fall into three categories: behavioral control, financial control, and the type of relationship of the parties. Amendment to 2010 tax return These facts are discussed next. Amendment to 2010 tax return Behavioral control. Amendment to 2010 tax return   Facts that show whether the business has a right to direct and control how the worker does the task for which the worker is hired include the type and degree of: Instructions that the business gives to the worker. Amendment to 2010 tax return   An employee is generally subject to the business' instructions about when, where, and how to work. Amendment to 2010 tax return All of the following are examples of types of instructions about how to do work. Amendment to 2010 tax return When and where to do the work. Amendment to 2010 tax return What tools or equipment to use. Amendment to 2010 tax return What workers to hire or to assist with the work. Amendment to 2010 tax return Where to purchase supplies and services. Amendment to 2010 tax return What work must be performed by a specified  individual. Amendment to 2010 tax return What order or sequence to follow. Amendment to 2010 tax return   The amount of instruction needed varies among different jobs. Amendment to 2010 tax return Even if no instructions are given, sufficient behavioral control may exist if the employer has the right to control how the work results are achieved. Amendment to 2010 tax return A business may lack the knowledge to instruct some highly specialized professionals; in other cases, the task may require little or no instruction. Amendment to 2010 tax return The key consideration is whether the business has retained the right to control the details of a worker's performance or instead has given up that right. Amendment to 2010 tax return Training that the business gives to the worker. Amendment to 2010 tax return   An employee may be trained to perform services in a particular manner. Amendment to 2010 tax return Independent contractors ordinarily use their own methods. Amendment to 2010 tax return Financial control. Amendment to 2010 tax return   Facts that show whether the business has a right to control the business aspects of the worker's job include: The extent to which the worker has unreimbursed business expenses. Amendment to 2010 tax return   Independent contractors are more likely to have unreimbursed expenses than are employees. Amendment to 2010 tax return Fixed ongoing costs that are incurred regardless of whether work is currently being performed are especially important. Amendment to 2010 tax return However, employees may also incur unreimbursed expenses in connection with the services that they perform for their employer. Amendment to 2010 tax return The extent of the worker's investment. Amendment to 2010 tax return   An independent contractor often has a significant investment in the facilities or tools he or she uses in performing services for someone else. Amendment to 2010 tax return However, a significant investment is not necessary for independent contractor status. Amendment to 2010 tax return The extent to which the worker makes his or her services available to the relevant market. Amendment to 2010 tax return   An independent contractor is generally free to seek out business opportunities. Amendment to 2010 tax return Independent contractors often advertise, maintain a visible business location, and are available to work in the relevant market. Amendment to 2010 tax return How the business pays the worker. Amendment to 2010 tax return   An employee is generally guaranteed a regular wage amount for an hourly, weekly, or other period of time. Amendment to 2010 tax return This usually indicates that a worker is an employee, even when the wage or salary is supplemented by a commission. Amendment to 2010 tax return An independent contractor is often paid a flat fee or on a time and materials basis for the job. Amendment to 2010 tax return However, it is common in some professions, such as law, to pay independent contractors hourly. Amendment to 2010 tax return The extent to which the worker can realize a profit or loss. Amendment to 2010 tax return   An independent contractor can make a profit or loss. Amendment to 2010 tax return Type of relationship. Amendment to 2010 tax return   Facts that show the parties' type of relationship include: Written contracts describing the relationship the parties intended to create. Amendment to 2010 tax return Whether or not the business provides the worker with employee-type benefits, such as insurance, a pension plan, vacation pay, or sick pay. Amendment to 2010 tax return The permanency of the relationship. Amendment to 2010 tax return If you engage a worker with the expectation that the relationship will continue indefinitely, rather than for a specific project or period, this is generally considered evidence that your intent was to create an employer-employee relationship. Amendment to 2010 tax return The extent to which services performed by the worker are a key aspect of the regular business of the company. Amendment to 2010 tax return If a worker provides services that are a key aspect of your regular business activity, it is more likely that you will have the right to direct and control his or her activities. Amendment to 2010 tax return For example, if a law firm hires an attorney, it is likely that it will present the attorney's work as its own and would have the right to control or direct that work. Amendment to 2010 tax return This would indicate an employer-employee relationship. Amendment to 2010 tax return IRS help. Amendment to 2010 tax return   If you want the IRS to determine whether or not a worker is an employee, file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, with the IRS. Amendment to 2010 tax return Industry Examples The following examples may help you properly classify your workers. Amendment to 2010 tax return Building and Construction Industry Example 1. Amendment to 2010 tax return Jerry Jones has an agreement with Wilma White to supervise the remodeling of her house. Amendment to 2010 tax return She did not advance funds to help him carry on the work. Amendment to 2010 tax return She makes direct payments to the suppliers for all necessary materials. Amendment to 2010 tax return She carries liability and workers' compensation insurance covering Jerry and others that he engaged to assist him. Amendment to 2010 tax return She pays them an hourly rate and exercises almost constant supervision over the work. Amendment to 2010 tax return Jerry is not free to transfer his assistants to other jobs. Amendment to 2010 tax return He may not work on other jobs while working for Wilma. Amendment to 2010 tax return He assumes no responsibility to complete the work and will incur no contractual liability if he fails to do so. Amendment to 2010 tax return He and his assistants perform personal services for hourly wages. Amendment to 2010 tax return Jerry Jones and his assistants are employees of Wilma White. Amendment to 2010 tax return Example 2. Amendment to 2010 tax return Milton Manning, an experienced tile setter, orally agreed with a corporation to perform full-time services at construction sites. Amendment to 2010 tax return He uses his own tools and performs services in the order designated by the corporation and according to its specifications. Amendment to 2010 tax return The corporation supplies all materials, makes frequent inspections of his work, pays him on a piecework basis, and carries workers' compensation insurance on him. Amendment to 2010 tax return He does not have a place of business or hold himself out to perform similar services for others. Amendment to 2010 tax return Either party can end the services at any time. Amendment to 2010 tax return Milton Manning is an employee of the corporation. Amendment to 2010 tax return Example 3. Amendment to 2010 tax return Wallace Black agreed with the Sawdust Co. Amendment to 2010 tax return to supply the construction labor for a group of houses. Amendment to 2010 tax return The company agreed to pay all construction costs. Amendment to 2010 tax return However, he supplies all the tools and equipment. Amendment to 2010 tax return He performs personal services as a carpenter and mechanic for an hourly wage. Amendment to 2010 tax return He also acts as superintendent and foreman and engages other individuals to assist him. Amendment to 2010 tax return The company has the right to select, approve, or discharge any helper. Amendment to 2010 tax return A company representative makes frequent inspections of the construction site. Amendment to 2010 tax return When a house is finished, Wallace is paid a certain percentage of its costs. Amendment to 2010 tax return He is not responsible for faults, defects of construction, or wasteful operation. Amendment to 2010 tax return At the end of each week, he presents the company with a statement of the amount that he has spent, including the payroll. Amendment to 2010 tax return The company gives him a check for that amount from which he pays the assistants, although he is not personally liable for their wages. Amendment to 2010 tax return Wallace Black and his assistants are employees of the Sawdust Co. Amendment to 2010 tax return Example 4. Amendment to 2010 tax return Bill Plum contracted with Elm Corporation to complete the roofing on a housing complex. Amendment to 2010 tax return A signed contract established a flat amount for the services rendered by Bill Plum. Amendment to 2010 tax return Bill is a licensed roofer and carries workers' compensation and liability insurance under the business name, Plum Roofing. Amendment to 2010 tax return He hires his own roofers who are treated as employees for federal employment tax purposes. Amendment to 2010 tax return If there is a problem with the roofing work, Plum Roofing is responsible for paying for any repairs. Amendment to 2010 tax return Bill Plum, doing business as Plum Roofing, is an independent contractor. Amendment to 2010 tax return Example 5. Amendment to 2010 tax return Vera Elm, an electrician, submitted a job estimate to a housing complex for electrical work at $16 per hour for 400 hours. Amendment to 2010 tax return She is to receive $1,280 every 2 weeks for the next 10 weeks. Amendment to 2010 tax return This is not considered payment by the hour. Amendment to 2010 tax return Even if she works more or less than 400 hours to complete the work, Vera Elm will receive $6,400. Amendment to 2010 tax return She also performs additional electrical installations under contracts with other companies, that she obtained through advertisements. Amendment to 2010 tax return Vera is an independent contractor. Amendment to 2010 tax return Trucking Industry Example. Amendment to 2010 tax return Rose Trucking contracts to deliver material for Forest, Inc. Amendment to 2010 tax return , at $140 per ton. Amendment to 2010 tax return Rose Trucking is not paid for any articles that are not delivered. Amendment to 2010 tax return At times, Jan Rose, who operates as Rose Trucking, may also lease another truck and engage a driver to complete the contract. Amendment to 2010 tax return All operating expenses, including insurance coverage, are paid by Jan Rose. Amendment to 2010 tax return All equipment is owned or rented by Jan and she is responsible for all maintenance. Amendment to 2010 tax return None of the drivers are provided by Forest, Inc. Amendment to 2010 tax return Jan Rose, operating as Rose Trucking, is an independent contractor. Amendment to 2010 tax return Computer Industry Example. Amendment to 2010 tax return Steve Smith, a computer programmer, is laid off when Megabyte, Inc. Amendment to 2010 tax return , downsizes. Amendment to 2010 tax return Megabyte agrees to pay Steve a flat amount to complete a one-time project to create a certain product. Amendment to 2010 tax return It is not clear how long that it will take to complete the project, and Steve is not guaranteed any minimum payment for the hours spent on the program. Amendment to 2010 tax return Megabyte provides Steve with no instructions beyond the specifications for the product itself. Amendment to 2010 tax return Steve and Megabyte have a written contract, which provides that Steve is considered to be an independent contractor, is required to pay federal and state taxes, and receives no benefits from Megabyte. Amendment to 2010 tax return Megabyte will file Form 1099-MISC, Miscellaneous Income, to report the amount paid to Steve. Amendment to 2010 tax return Steve works at home and is not expected or allowed to attend meetings of the software development group. Amendment to 2010 tax return Steve is an independent contractor. Amendment to 2010 tax return Automobile Industry Example 1. Amendment to 2010 tax return Donna Lee is a salesperson employed on a full-time basis by Bob Blue, an auto dealer. Amendment to 2010 tax return She works six days a week and is on duty in Bob's showroom on certain assigned days and times. Amendment to 2010 tax return She appraises trade-ins, but her appraisals are subject to the sales manager's approval. Amendment to 2010 tax return Lists of prospective customers belong to the dealer. Amendment to 2010 tax return She is required to develop leads and report results to the sales manager. Amendment to 2010 tax return Because of her experience, she requires only minimal assistance in closing and financing sales and in other phases of her work. Amendment to 2010 tax return She is paid a commission and is eligible for prizes and bonuses offered by Bob. Amendment to 2010 tax return Bob also pays the cost of health insurance and group-term life insurance for Donna. Amendment to 2010 tax return Donna is an employee of Bob Blue. Amendment to 2010 tax return Example 2. Amendment to 2010 tax return Sam Sparks performs auto repair services in the repair department of an auto sales company. Amendment to 2010 tax return He works regular hours and is paid on a percentage basis. Amendment to 2010 tax return He has no investment in the repair department. Amendment to 2010 tax return The sales company supplies all facilities, repair parts, and supplies; issues instructions on the amounts to be charged, parts to be used, and the time for completion of each job; and checks all estimates and repair orders. Amendment to 2010 tax return Sam is an employee of the sales company. Amendment to 2010 tax return Example 3. Amendment to 2010 tax return An auto sales agency furnishes space for Helen Bach to perform auto repair services. Amendment to 2010 tax return She provides her own tools, equipment, and supplies. Amendment to 2010 tax return She seeks out business from insurance adjusters and other individuals and does all of the body and paint work that comes to the agency. Amendment to 2010 tax return She hires and discharges her own helpers, determines her own and her helpers' working hours, quotes prices for repair work, makes all necessary adjustments, assumes all losses from uncollectible accounts, and receives, as compensation for her services, a large percentage of the gross collections from the auto repair shop. Amendment to 2010 tax return Helen is an independent contractor and the helpers are her employees. Amendment to 2010 tax return Attorney Example. Amendment to 2010 tax return Donna Yuma is a sole practitioner who rents office space and pays for the following items: telephone, computer, on-line legal research linkup, fax machine, and photocopier. Amendment to 2010 tax return Donna buys office supplies and pays bar dues and membership dues for three other professional organizations. Amendment to 2010 tax return Donna has a part-time receptionist who also does the bookkeeping. Amendment to 2010 tax return She pays the receptionist, withholds and pays federal and state employment taxes, and files a Form W-2 each year. Amendment to 2010 tax return For the past 2 years, Donna has had only three clients, corporations with which there have been long-standing relationships. Amendment to 2010 tax return Donna charges the corporations an hourly rate for her services, sending monthly bills detailing the work performed for the prior month. Amendment to 2010 tax return The bills include charges for long distance calls, on-line research time, fax charges, photocopies, postage, and travel, costs for which the corporations have agreed to reimburse her. Amendment to 2010 tax return Donna is an independent contractor. Amendment to 2010 tax return Taxicab Driver Example. Amendment to 2010 tax return Tom Spruce rents a cab from Taft Cab Co. Amendment to 2010 tax return for $150 per day. Amendment to 2010 tax return He pays the costs of maintaining and operating the cab. Amendment to 2010 tax return Tom Spruce keeps all fares that he receives from customers. Amendment to 2010 tax return Although he receives the benefit of Taft's two-way radio communication equipment, dispatcher, and advertising, these items benefit both Taft and Tom Spruce. Amendment to 2010 tax return Tom Spruce is an independent contractor. Amendment to 2010 tax return Salesperson To determine whether salespersons are employees under the usual common-law rules, you must evaluate each individual case. Amendment to 2010 tax return If a salesperson who works for you does not meet the tests for a common-law employee, discussed earlier in this section, you do not have to withhold federal income tax from his or her pay (see Statutory Employees in section 1). Amendment to 2010 tax return However, even if a salesperson is not an employee under the usual common-law rules for income tax withholding, his or her pay may still be subject to social security, Medicare, and FUTA taxes as a statutory employee. Amendment to 2010 tax return To determine whether a salesperson is an employee for social security, Medicare, and FUTA tax purposes, the salesperson must meet all eight elements of the statutory employee test. Amendment to 2010 tax return A salesperson is a statutory employee for social security, Medicare, and FUTA tax purposes if he or she: Works full time for one person or company except, possibly, for sideline sales activities on behalf of some other person, Sells on behalf of, and turns his or her orders over to, the person or company for which he or she works, Sells to wholesalers, retailers, contractors, or operators of hotels, restaurants, or similar establishments, Sells merchandise for resale, or supplies for use in the customer's business, Agrees to do substantially all of this work personally, Has no substantial investment in the facilities used to do the work, other than in facilities for transportation, Maintains a continuing relationship with the person or company for which he or she works, and Is not an employee under common-law rules. Amendment to 2010 tax return 3. Amendment to 2010 tax return Employees of Exempt Organizations Many nonprofit organizations are exempt from federal income tax. Amendment to 2010 tax return Although they do not have to pay federal income tax themselves, they must still withhold federal income tax from the pay of their employees. Amendment to 2010 tax return However, there are special social security, Medicare, and FUTA tax rules that apply to the wages that they pay their employees. Amendment to 2010 tax return Section 501(c)(3) organizations. Amendment to 2010 tax return   Nonprofit organizations that are exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code include any community chest, fund, or foundation organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary or educational purposes, fostering national or international amateur sports competition, or for the prevention of cruelty to children or animals. Amendment to 2010 tax return These organizations are usually corporations and are exempt from federal income tax under section 501(a). Amendment to 2010 tax return Social security and Medicare taxes. Amendment to 2010 tax return   Wages paid to employees of section 501(c)(3) organizations are subject to social security and Medicare taxes unless one of the following situations applies. Amendment to 2010 tax return The organization pays an employee less than $100 in a calendar year. Amendment to 2010 tax return The organization is a church or church-controlled organization opposed for religious reasons to the payment of social security and Medicare taxes and has filed Form 8274, Certification by Churches and Qualified Church-Controlled Organizations Electing Exemption From Employer Social Security and Medicare Taxes, to elect exemption from social security and Medicare taxes. Amendment to 2010 tax return The organization must have filed for exemption before the first date on which a quarterly employment tax return (Form 941) or annual employment tax return (Form 944) would otherwise be due. Amendment to 2010 tax return   An employee of a church or church-controlled organization that is exempt from social security and Medicare taxes must pay self-employment tax if the employee is paid $108. Amendment to 2010 tax return 28 or more in a year. Amendment to 2010 tax return However, an employee who is a member of a qualified religious sect can apply for an exemption from the self-employment tax by filing Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits. Amendment to 2010 tax return See Members of recognized religious sects opposed to insurance in section 4. Amendment to 2010 tax return FUTA tax. Amendment to 2010 tax return   An organization that is exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code is also exempt from FUTA tax. Amendment to 2010 tax return This exemption cannot be waived. Amendment to 2010 tax return Do not file Form 940 to report wages paid by these organizations or pay the tax. Amendment to 2010 tax return Note. Amendment to 2010 tax return An organization wholly owned by a state or its political subdivision should contact the appropriate state official for information about reporting and getting social security and Medicare coverage for its employees. Amendment to 2010 tax return Other than section 501(c)(3) organizations. Amendment to 2010 tax return   Nonprofit organizations that are not section 501(c)(3) organizations may also be exempt from federal income tax under section 501(a) or section 521. Amendment to 2010 tax return However, these organizations are not exempt from withholding federal income, social security, or Medicare tax from their employees' pay, or from paying FUTA tax. Amendment to 2010 tax return Two special rules for social security, Medicare, and FUTA taxes apply. Amendment to 2010 tax return If an employee is paid less than $100 during a calendar year, his or her wages are not subject to social security and Medicare taxes. Amendment to 2010 tax return If an employee is paid less than $50 in a calendar quarter, his or her wages are not subject to FUTA tax for the quarter. Amendment to 2010 tax return The above rules do not apply to employees who work for pension plans and other similar organizations described in section 401(a). Amendment to 2010 tax return 4. Amendment to 2010 tax return Religious Exemptions and Special Rules for Ministers Special rules apply to the treatment of ministers for social security and Medicare tax purposes. Amendment to 2010 tax return An exemption from social security and Medicare taxes is available for ministers and certain other religious workers and members of certain recognized religious sects. Amendment to 2010 tax return For more information on getting an exemption, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. Amendment to 2010 tax return Ministers. Amendment to 2010 tax return   Ministers are individuals who are duly ordained, commissioned, or licensed by a religious body constituting a church or church denomination. Amendment to 2010 tax return They are given the authority to conduct religious worship, perform sacerdotal functions, and administer ordinances and sacraments according to the prescribed tenets and practices of that religious organization. Amendment to 2010 tax return   Ministers are employees if they perform services in the exercise of ministry and are subject to your will and control. Amendment to 2010 tax return The common-law rules discussed in section 1 and section 2 should be applied to determine whether a minister is your employee or is self-employed. Amendment to 2010 tax return Whether the minister is an employee or self-employed, the earnings of a minister are not subject to federal income, social security, and Medicare tax withholding. Amendment to 2010 tax return However, even if the minister is a common law employee, the earnings as reported on the minister's Form 1040 are subject to self-employment tax and federal income tax. Amendment to 2010 tax return You do not withhold these taxes from wages earned by a minister, but if the minister is your employee, you may agree with the minister to voluntarily withhold tax to cover the minister's liability for self-employment tax and federal income tax. Amendment to 2010 tax return For more information, see Publication 517. Amendment to 2010 tax return Form W-2. Amendment to 2010 tax return   If your minister is an employee, report all taxable compensation as wages in box 1 on Form W-2. Amendment to 2010 tax return Include in this amount expense allowances or reimbursements paid under a nonaccountable plan, discussed in section 5 of Publication 15 (Circular E). Amendment to 2010 tax return Do not include a parsonage allowance (excludable housing allowance) in this amount. Amendment to 2010 tax return You may report a designated parsonage or rental allowance (housing allowance) and a utilities allowance, or the rental value of housing provided in a separate statement or in box 14 on Form W-2. Amendment to 2010 tax return Do not show on Form W-2, Form 941, or Form 944 any amount as social security or Medicare wages, or any withholding for social security or Medicare taxes. Amendment to 2010 tax return If you withheld federal income tax from the minister under a voluntary agreement, this amount should be shown in box 2 on Form W-2 as federal income tax withheld. Amendment to 2010 tax return For more information on ministers, see Publication 517. Amendment to 2010 tax return Exemptions for ministers and others. Amendment to 2010 tax return   Certain ordained ministers, Christian Science practitioners, and members of religious orders who have not taken a vow of poverty may apply to exempt their earnings from self-employment tax on religious grounds. Amendment to 2010 tax return The application must be based on conscientious opposition because of personal considerations to public insurance that makes payments in the event of death, disability, old age, or retirement, or that makes payments toward the cost of, or provides services for, medical care, including social security and Medicare benefits. Amendment to 2010 tax return The exemption applies only to qualified services performed for the religious organization. Amendment to 2010 tax return See Revenue Procedure 91-20, 1991-1 C. Amendment to 2010 tax return B. Amendment to 2010 tax return 524, for guidelines to determine whether an organization is a religious order or whether an individual is a member of a religious order. Amendment to 2010 tax return   To apply for the exemption, the employee should file Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners. Amendment to 2010 tax return See Publication 517 for more information about claiming an exemption from self-employment tax using Form 4361. Amendment to 2010 tax return Members of recognized religious sects opposed to insurance. Amendment to 2010 tax return   If you belong to a recognized religious sect or to a division of such sect that is opposed to insurance, you may qualify for an exemption from the self-employment tax. Amendment to 2010 tax return To qualify, you must be conscientiously opposed to accepting the benefits of any public or private insurance that makes payments because of death, disability, old age, or retirement, or makes payments toward the cost of, or provides services for, medical care (including social security and Medicare benefits). Amendment to 2010 tax return If you buy a retirement annuity from an insurance company, you will not be eligible for this exemption. Amendment to 2010 tax return Religious opposition based on the teachings of the sect is the only legal basis for the exemption. Amendment to 2010 tax return In addition, your religious sect (or division) must have existed since December 31, 1950. Amendment to 2010 tax return Self-employed. Amendment to 2010 tax return   If you are self-employed and a member of a recognized religious sect opposed to insurance, you can apply for exemption by filing Form 4029 to waive all social security and Medicare benefits. Amendment to 2010 tax return Employees. Amendment to 2010 tax return   The social security and Medicare tax exemption available to the self-employed who are members of a recognized religious sect opposed to insurance is also available to their employees who are members of such a sect. Amendment to 2010 tax return This applies to partnerships only if each partner is a member of the sect. Amendment to 2010 tax return This exemption for employees applies only if both the employee and the employer are members of such a sect, and the employer has an exemption. Amendment to 2010 tax return To get the exemption, the employee must file Form 4029. Amendment to 2010 tax return   An employee of a church or church-controlled organization that is exempt from social security and Medicare taxes can also apply for an exemption on Form 4029. Amendment to 2010 tax return 5. Amendment to 2010 tax return Wages and Other Compensation Publication 15 (Circular E) provides a general discussion of taxable wages. Amendment to 2010 tax return Publication 15-B discusses fringe benefits. Amendment to 2010 tax return The following topics supplement those discussions. Amendment to 2010 tax return Relocating for Temporary Work Assignments If an employee is given a temporary work assignment away from his or her regular place of work, certain travel expenses reimbursed or paid directly by the employer in accordance with an accountable plan (see section 5 in Publication 15 (Circular E)) may be excludable from the employee's wages. Amendment to 2010 tax return Generally, a temporary work assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less. Amendment to 2010 tax return If the employee's new work assignment is indefinite, any living expenses reimbursed or paid by the employer (other than qualified moving expenses) must be included in the employee's wages as compensation. Amendment to 2010 tax return For the travel expenses to be excludable: The new work location must be outside of the city or general area of the employee's regular work place or post of duty, The travel expenses must otherwise qualify as deductible by the employee, and The expenses must be for the period during which the employee is at the temporary work location. Amendment to 2010 tax return If you reimburse or pay any personal expenses of an employee during his or her temporary work assignment, such as expenses for home leave for family members or for vacations, these amounts must be included in the employee's wages. Amendment to 2010 tax return See chapter 1 of Publication 463, Travel, Entertainment, Gift, and Car Expenses, and section 5 of Publication 15 (Circular E), for more information. Amendment to 2010 tax return These rules generally apply to temporary work assignments both inside and outside the U. Amendment to 2010 tax return S. Amendment to 2010 tax return Employee Achievement Awards Do not withhold federal income, social security, or Medicare taxes on the fair market value of an employee achievement award if it is excludable from your employee's gross income. Amendment to 2010 tax return To be excludable from your employee's gross income, the award must be tangible personal property (not cash, gift certificates, or securities) given to an employee for length of service or safety achievement, awarded as part of a meaningful presentation, and awarded under circumstances that do not indicate that the payment is disguised compensation. Amendment to 2010 tax return Excludable employee achievement awards also are not subject to FUTA tax. Amendment to 2010 tax return Limits. Amendment to 2010 tax return   The most that you can exclude for the cost of all employee achievement awards to the same employee for the year is $400. Amendment to 2010 tax return A higher limit of $1,600 applies to qualified plan awards. Amendment to 2010 tax return Qualified plan awards are employee achievement awards under a written plan that does not discriminate in favor of highly compensated employees. Amendment to 2010 tax return An award cannot be treated as a qualified plan award if the average cost per recipient of all awards under all of your qualified plans is more than $400. Amendment to 2010 tax return   If during the year an employee receives awards not made under a qualified plan and also receives awards under a qualified plan, the exclusion for the total cost of all awards to that employee cannot be more than $1,600. Amendment to 2010 tax return The $400 and $1,600 limits cannot be added together to exclude more than $1,600 for the cost of awards to any one employee during the year. Amendment to 2010 tax return Scholarship and Fellowship Payments Only amounts that you pay as a qualified scholarship to a candidate for a degree may be excluded from the recipient's gross income. Amendment to 2010 tax return A qualified scholarship is any amount granted as a scholarship or fellowship that is used for: Tuition and fees required to enroll in, or to attend, an educational institution, or Fees, books, supplies, and equipment that are required for courses at the educational institution. Amendment to 2010 tax return The exclusion from income does not apply to the portion of any amount received that represents payment for teaching, research, or other services required as a condition of receiving the scholarship or tuition reduction. Amendment to 2010 tax return These amounts are reportable on Form W-2. Amendment to 2010 tax return However, the exclusion will still apply for any amount received under two specific programs—the National Health Service Corps Scholarship Program and the Armed Forces Health Professions Scholarship and Financial Assistance Program—despite any service condition attached to those amounts. Amendment to 2010 tax return Any amounts that you pay for room and board are not excludable from the recipient's gross income. Amendment to 2010 tax return A qualified scholarship is not subject to social security, Medicare, and FUTA taxes, or federal income tax withholding. Amendment to 2010 tax return For more information, see Publication 970, Tax Benefits for Education. Amendment to 2010 tax return Outplacement Services If you provide outplacement services to your employees to help them find new employment (such as career counseling, resume assistance, or skills assessment), the value of these benefits may be income to them and subject to all withholding taxes. Amendment to 2010 tax return However, the value of these services will not be subject to any employment taxes if: You derive a substantial business benefit from providing the services (such as improved employee morale or business image) separate from the benefit that you would receive from the mere payment of additional compensation, and The employee would be able to deduct the cost of the services as employee business expenses if he or she had paid for them. Amendment to 2010 tax return However, if you receive no additional benefit from providing the services, or if the services are not provided on the basis of employee need, then the value of the services is treated as wages and is subject to federal income tax withholding and social security and Medicare taxes. Amendment to 2010 tax return Similarly, if an employee receives the outplacement services in exchange for reduced severance pay (or other taxable compensation), then the amount the severance pay is reduced is treated as wages for employment tax purposes. Amendment to 2010 tax return Withholding for Idle Time Payments made under a voluntary guarantee to employees for idle time (any time during which an employee performs no services) are wages for the purposes of social security, Medicare, and FUTA taxes, and federal income tax withholding. Amendment to 2010 tax return Back Pay Treat back pay as wages in the year paid and withhold and pay employment taxes as required. Amendment to 2010 tax return If back pay was awarded by a court or government agency to enforce a federal or state statute protecting an employee's right to employment or wages, special rules apply for reporting those wages to the Social Security Administration. Amendment to 2010 tax return These rules also apply to litigation actions and settlement agreements or agency directives that are resolved out of court and not under a court decree or order. Amendment to 2010 tax return Examples of pertinent statutes include, but are not limited to, the National Labor Relations Act, Fair Labor Standards Act, Equal Pay Act, and Age Discrimination in Employment Act. Amendment to 2010 tax return See Publication 957, Reporting Back Pay and Special Wage Payments to the Social Security Administration, and Form SSA-131, Employer Report of Special Wage Payments, for details. Amendment to 2010 tax return Supplemental Unemployment Benefits If you pay, under a plan, supplemental unemployment benefits to a former employee, all or part of the payments may be taxable and subject to federal income tax withholding, depending on how the plan is funded. Amendment to 2010 tax return Amounts that represent a return to the employee of amounts previously subject to tax are not taxable and are not subject to withholding. Amendment to 2010 tax return You should withhold federal income tax on the taxable part of the payments made, under a plan, to an employee who is involuntarily separated because of a reduction in force, discontinuance of a plant or operation, or other similar condition. Amendment to 2010 tax return It does not matter whether the separation is temporary or permanent. Amendment to 2010 tax return There are special rules that apply in determining whether benefits qualify as supplemental unemployment benefits that are excluded from wages for social security, Medicare, and FUTA tax purposes. Amendment to 2010 tax return To qualify as supplemental unemployment benefits for these purposes, the benefits must meet the following requirements. Amendment to 2010 tax return Benefits are paid only to unemployed former employees who are laid off by the employer. Amendment to 2010 tax return Eligibility for benefits depends on meeting prescribed conditions after termination. Amendment to 2010 tax return The amount of weekly benefits payable is based upon state unemployment benefits, other compensation allowable under state law, and the amount of regular weekly pay. Amendment to 2010 tax return The right to benefits does not accrue until a prescribed period after termination. Amendment to 2010 tax return Benefits are not attributable to the performance of particular services. Amendment to 2010 tax return No employee has any right to the benefits until qualified and eligible to receive benefits. Amendment to 2010 tax return Benefits may not be paid in a lump sum. Amendment to 2010 tax return Withholding on taxable supplemental unemployment benefits must be based on the withholding certificate (Form W-4) that the employee gave to you. Amendment to 2010 tax return Golden Parachute Payments A golden parachute payment, in general, is a payment made under a contract entered into by a corporation and key personnel. Amendment to 2010 tax return Under the agreement, the corporation agrees to pay certain amounts to its key personnel in the event of a change in ownership or control of the corporation. Amendment to 2010 tax return Payments to employees under golden parachute contracts are subject to social security, Medicare, and FUTA taxes, and federal income tax withholding. Amendment to 2010 tax return See Regulations section 1. Amendment to 2010 tax return 280G-1 for more information. Amendment to 2010 tax return No deduction is allowed to the corporation for any excess parachute payment. Amendment to 2010 tax return To determine the amount of the excess parachute payment, you must first determine if there is a parachute payment for purposes of section 280G. Amendment to 2010 tax return A parachute payment for purposes of section 280G is any payment that meets all of the following. Amendment to 2010 tax return The payment is in the nature of compensation. Amendment to 2010 tax return The payment is to, or for the benefit of, a disqualified individual. Amendment to 2010 tax return A disqualified individual is anyone who at any time during the 12-month period prior to and ending on the date of the change in ownership or control of the corporation (the disqualified individual determination period) was an employee or independent contractor and was, in regard to that corporation, a shareholder, an officer, or highly compensated individual. Amendment to 2010 tax return The payment is contingent on a change in ownership of the corporation, the effective control of the corporation, or the ownership of a substantial portion of the assets of the corporation. Amendment to 2010 tax return The payment has an aggregate present value of at least three times the individual's base amount. Amendment to 2010 tax return The base amount is the average annual compensation for service includible in the individual's gross income over the most recent 5 taxable years. Amendment to 2010 tax return An excess parachute payment amount is the excess of any parachute payment over the base amount. Amendment to 2010 tax return For more information, see Regulations section 1. Amendment to 2010 tax return 280G-1. Amendment to 2010 tax return The recipient of an excess parachute payment is subject to a 20% nondeductible excise tax. Amendment to 2010 tax return If the recipient is an employee, the 20% excise tax is to be withheld by the corporation. Amendment to 2010 tax return Example. Amendment to 2010 tax return An officer of a corporation receives a golden parachute payment of $400,000. Amendment to 2010 tax return This is more than three times greater than his or her average compensation of $100,000 over the previous 5-year period. Amendment to 2010 tax return The excess parachute payment is $300,000 ($400,000 minus $100,000). Amendment to 2010 tax return The corporation cannot deduct the $300,000 and must withhold the excise tax of $60,000 (20% of $300,000). Amendment to 2010 tax return Reporting golden parachute payments. Amendment to 2010 tax return   Golden parachute payments to employees must be reported on Form W-2. Amendment to 2010 tax return See the General Instructions for Forms W-2 and W-3 for details. Amendment to 2010 tax return For nonemployee reporting of these payments, see Box 7. Amendment to 2010 tax return Nonemployee Compensation in the Instructions for Form 1099-MISC. Amendment to 2010 tax return Exempt payments. Amendment to 2010 tax return   Payments by most small business corporations and payments under certain qualified plans are exempt from the golden parachute rules. Amendment to 2010 tax return See section 280G(b)(5) and (6) for more information. Amendment to 2010 tax return Interest-Free and Below-Market-Interest-Rate Loans In general, if an employer lends an employee more than $10,000 at an interest rate less than the current applicable federal rate (AFR), the difference between the interest paid and the interest that would be paid under the AFR is considered additional compensation to the employee. Amendment to 2010 tax return This rule applies to a loan of $10,000 or less if one of its principal purposes is the avoidance of federal tax. Amendment to 2010 tax return This additional compensation to the employee is subject to social security, Medicare, and FUTA taxes, but not to federal income tax withholding. Amendment to 2010 tax return Include it in compensation on Form W-2 (or Form 1099-MISC for an independent contractor). Amendment to 2010 tax return The AFR is established monthly and published by the IRS each month in the Internal Revenue Bulletin. Amendment to 2010 tax return You can get these rates by calling 1-800-829-4933 or by visiting IRS. Amendment to 2010 tax return gov. Amendment to 2010 tax return For more information, see section 7872 and its related regulations. Amendment to 2010 tax return Leave Sharing Plans If you establish a leave sharing plan for your employees that allows them to transfer leave to other employees for medical emergencies, the amounts paid to the recipients of the leave are considered wages. Amendment to 2010 tax return These amounts are includible in the gross income of the recipients and are subject to social security, Medicare, and FUTA taxes, and federal income tax withholding. Amendment to 2010 tax return Do not include these amounts in the income of the transferors. Amendment to 2010 tax return These rules apply only to leave sharing plans that permit employees to transfer leave to other employees for medical emergencies. Amendment to 2010 tax return Nonqualified Deferred Compensation Plans Income Tax and Reporting Section 409A provides that all amounts deferred under a nonqualified deferred compensation (NQDC) plan for all tax years are currently includible in gross income (to the extent not subject to a substantial risk of forfeiture and not previously included in gross income) and subject to additional taxes, unless certain requirements are met pertaining to, among other things, elections to defer compensation and distributions under a NQDC plan. Amendment to 2010 tax return Section 409A also includes rules that apply to certain trusts or similar arrangements associated with NQDC plans if the trusts or arrangements are located outside of the United States, are restricted to the provision of benefits in connection with a decline in the financial health of the plan sponsor, or contributions are made to the trust during certain periods such as when a qualified plan of the service recipient is underfunded. Amendment to 2010 tax return Employers must withhold federal income tax (but not the additional Section 409A taxes) on any amount includible in gross income under section 409A. Amendment to 2010 tax return Other changes to the Internal Revenue Code provide that the deferrals under a NQDC plan must be reported separately on Form W-2 or Form 1099-MISC, whichever applies. Amendment to 2010 tax return Specific rules for reporting are provided in the instructions to the forms. Amendment to 2010 tax return The provisions do not affect the application or reporting of social security, Medicare, or FUTA taxes. Amendment to 2010 tax return The provisions do not prevent the inclusion of amounts in income or wages under other provisions of the Internal Revenue Code or common law principles, such as when amounts are actually or constructively received or irrevocably contributed to a separate fund. Amendment to 2010 tax return For more information about nonqualified deferred compensation plans, see Regulations sections 1. Amendment to 2010 tax return 409A-1 through 1. Amendment to 2010 tax return 409A-6. Amendment to 2010 tax return Notice 2008-113 provides guidance on the correction of certain operation failures of a NQDC plan. Amendment to 2010 tax return Notice 2008-113, 2008-51 I. Amendment to 2010 tax return R. Amendment to 2010 tax return B. Amendment to 2010 tax return 1305, is available at www. Amendment to 2010 tax return irs. Amendment to 2010 tax return gov/irb/2008-51_IRB/ar12. Amendment to 2010 tax return html. Amendment to 2010 tax return Also see Notice 2010-6, 2010-3 I. Amendment to 2010 tax return R. Amendment to 2010 tax return B. Amendment to 2010 tax return 275, available at www. Amendment to 2010 tax return irs. Amendment to 2010 tax return gov/irb/2010-03_IRB/ar08. Amendment to 2010 tax return html and Notice 2010-80, 2010-51 I. Amendment to 2010 tax return R. Amendment to 2010 tax return B. Amendment to 2010 tax return 853, available at www. Amendment to 2010 tax return irs. Amendment to 2010 tax return gov/irb/2010-51_IRB/ar08. Amendment to 2010 tax return html. Amendment to 2010 tax return Social security, Medicare, and FUTA taxes. Amendment to 2010 tax return   Employer contributions to nonqualified deferred compensation (NQDC) plans, as defined in the applicable regulations, are treated as wages subject to social security, Medicare, and FUTA taxes when the services are performed or the employee no longer has a substantial risk of forfeiting the right to the deferred compensation, whichever is later. Amendment to 2010 tax return   Amounts deferred are subject to social security, Medicare, and FUTA taxes at that time unless the amount that is deferred cannot be reasonably ascertained; for example, if benefits are based on final pay. Amendment to 2010 tax return If the value of the future benefit is based on any factors that are not yet reasonably ascertainable, you may choose to estimate the value of the future benefit and withhold and pay social security, Medicare, and FUTA taxes on that amount. Amendment to 2010 tax return You will have to determine later, when the amount is reasonably ascertainable, whether any additional taxes are required. Amendment to 2010 tax return If taxes are not paid before the amounts become reasonably ascertainable, when the amounts become reasonably ascertainable they are subject to social security, Medicare, and FUTA taxes on the amounts deferred plus the income attributable to those amounts deferred. Amendment to 2010 tax return For more information, see Regulations sections 31. Amendment to 2010 tax return 3121(v)(2)-1 and 31. Amendment to 2010 tax return 3306(r)(2)-1. Amendment to 2010 tax return Tax-Sheltered Annuities Employer payments made by a public educational institution or a tax-exempt organization to purchase a tax-sheltered annuity for an employee (annual deferrals) are included in the employee's social security and Medicare wages, if the payments are made because of a salary reduction agreement. Amendment to 2010 tax return However, they are not included in box 1 on Form W-2 in the year the deferrals are made and are not subject to federal income tax withholding. Amendment to 2010 tax return See Regulations section 31. Amendment to 2010 tax return 3121(a)(5)-2 for the definition of a salary reduction agreement. Amendment to 2010 tax return Contributions to a Simplified Employee Pension (SEP) An employer's SEP contributions to an employee's individual retirement arrangement (IRA) are excluded from the employee's gross income. Amendment to 2010 tax return These excluded amounts are not subject to social security, Medicare, or FUTA taxes, or federal income tax withholding. Amendment to 2010 tax return However, any SEP contributions paid under a salary reduction agreement (SARSEP) are included in wages for purposes of social security, Medicare, and FUTA taxes. Amendment to 2010 tax return See Publication 560 for more information about SEPs. Amendment to 2010 tax return Salary reduction simplified employee pensions (SARSEP) repealed. Amendment to 2010 tax return   You may not establish a SARSEP after 1996. Amendment to 2010 tax return However, SARSEPs established before January 1, 1997, may continue to receive contributions. Amendment to 2010 tax return SIMPLE Retirement Plans Employer and employee contributions to a savings incentive match plan for employees (SIMPLE) retirement account (subject to limitations) are excludable from the employee's income and are exempt from federal income tax withholding. Amendment to 2010 tax return An employer's nonelective (2%) or matching contributions are exempt from social security, Medicare, and FUTA taxes. Amendment to 2010 tax return However, an employee's salary reduction contributions to a SIMPLE are subject to social security, Medicare, and FUTA taxes. Amendment to 2010 tax return For more information about SIMPLE retirement plans, see Publication 560. Amendment to 2010 tax return 6. Amendment to 2010 tax return Sick Pay Reporting The IRS expects to change the third-party sick pay recap reporting and filing requirements for wages paid in 2014. Amendment to 2010 tax return Information about this change will be included in the revision of Publication 15-A that is expected to post to IRS. Amendment to 2010 tax return gov in December 2014. Amendment to 2010 tax return Special rules apply to the reporting of sick pay payments to employees. Amendment to 2010 tax return How these payments are reported depends on whether the payments are made by the employer or a third party, such as an insurance company. Amendment to 2010 tax return Sick pay is usually subject to social security, Medicare, and FUTA taxes. Amendment to 2010 tax return For exceptions, see Social Security, Medicare, and FUTA Taxes on Sick Pay , later in this section. Amendment to 2010 tax return Sick pay may also be subject to either mandatory or voluntary federal income tax withholding, depending on who pays it. Amendment to 2010 tax return Sick Pay Sick pay generally means any amount paid under a plan because of an employee's temporary absence from work due to injury, sickness, or disability. Amendment to 2010 tax return It may be paid by either the employer or a third party, such as an insurance company. Amendment to 2010 tax return Sick pay includes both short- and long-term benefits. Amendment to 2010 tax return It is often expressed as a percentage of the employee's regular wages. Amendment to 2010 tax return Payments That Are Not Sick Pay Sick pay does not include the following payments. Amendment to 2010 tax return Disability retirement payments. Amendment to 2010 tax return Disability retirement payments are not sick pay and are not discussed in this section. Amendment to 2010 tax return Those payments are subject to the rules for federal income tax withholding from pensions and annuities. Amendment to 2010 tax return See section 8. Amendment to 2010 tax return Workers' compensation. Amendment to 2010 tax return Payments because of a work-related injury or sickness that are made under a workers' compensation law are not sick pay and are not subject to employment taxes. Amendment to 2010 tax return But see Payments in the nature of workers' compensation—public employees next. Amendment to 2010 tax return Payments in the nature of workers' compensation—public employees. Amendment to 2010 tax return State and local government employees, such as police officers and firefighters, sometimes receive payments due to an injury in the line of duty under a statute that is not the general workers' compensation law of a state. Amendment to 2010 tax return If the statute limits benefits to work-related injuries or sickness and does not base payments on the employee's age, length of service, or prior contributions, the statute is “in the nature of” a workers' compensation law. Amendment to 2010 tax return Payments under a statute in the nature of a workers' compensation law are not sick pay and are not subject to employment taxes. Amendment to 2010 tax return For more information, see Regulations section 31. Amendment to 2010 tax return 3121(a)(2)-1. Amendment to 2010 tax return Medical expense payments. Amendment to 2010 tax return Payments under a definite plan or system for medical and hospitalization expenses, or for insurance covering these expenses, are not sick pay and are not subject to employment taxes. Amendment to 2010 tax return Payments unrelated to absence from work. Amendment to 2010 tax return Accident or health insurance payments unrelated to absence from work are not sick pay and are not subject to employment taxes. Amendment to 2010 tax return These include payments for: Permanent loss of a member or function of the body, Permanent loss of the use of a member or function of the body, or Permanent disfigurement of the body. Amendment to 2010 tax return Example. Amendment to 2010 tax return Donald was injured in a car accident and lost an eye. Amendment to 2010 tax return Under a policy paid for by Donald's employer, Delta Insurance Co. Amendment to 2010 tax return paid Donald $20,000 as compensation for the loss of his eye. Amendment to 2010 tax return Because the payment was determined by the type of injury and was unrelated to Donald's absence from work, it is not sick pay and is not subject to federal employment taxes. Amendment to 2010 tax return Sick Pay Plan A sick pay plan is a plan or system established by an employer under which sick pay is available to employees generally or to a class or classes of employees. Amendment to 2010 tax return This does not include a situation in which benefits are provided on a discretionary or occasional basis with merely an intention to aid particular employees in time of need. Amendment to 2010 tax return You have a sick pay plan or system if the plan is in writing or is otherwise made known to employees, such as by a bulletin board notice or your long and established practice. Amendment to 2010 tax return Some indications that you have a sick pay plan or system include references to the plan or system in the contract of employment, employer contributions to a plan, or segregated accounts for the payment of benefits. Amendment to 2010 tax return Definition of employer. Amendment to 2010 tax return   The employer for whom the employee normally works, a term used in the following discussion, is either the employer for whom the employee was working at the time that the employee became sick or disabled or the last employer for whom the employee worked before becoming sick or disabled, if that employer made contributions to the sick pay plan on behalf of the sick or disabled employee. Amendment to 2010 tax return Note. Amendment to 2010 tax return Contributions to a sick pay plan through a cafeteria plan (by direct employer contributions or salary reduction) are employer contributions unless they are after-tax employee contributions (that is, included in taxable wages). Amendment to 2010 tax return Third-Party Payers of Sick Pay Employer's agent. Amendment to 2010 tax return   An employer's agent is a third party that bears no insurance risk and is reimbursed on a cost-plus-fee basis for payment of sick pay and similar amounts. Amendment to 2010 tax return A third party may be your agent even if the third party is responsible for determining which employees are eligible to receive payments. Amendment to 2010 tax return For example, if a third party provides administrative services only, the third party is your agent. Amendment to 2010 tax return If the third party is paid an insurance premium and is not reimbursed on a cost-plus-fee basis, the third party is not your agent. Amendment to 2010 tax return Whether an insurance company or other third party is your agent depends on the terms of their agreement with you. Amendment to 2010 tax return   A third party that makes payments of sick pay as your agent is not considered the employer and generally has no responsibility for employment taxes. Amendment to 2010 tax return This responsibility remains with you. Amendment to 2010 tax return However, under an exception to this rule, the parties may enter into an agreement that makes the third-party agent responsible for employment taxes. Amendment to 2010 tax return In this situation, the third-party agent should use its own name and EIN (rather than your name and EIN) for the responsibilities that it has assumed. Amendment to 2010 tax return Third party not employer's agent. Amendment to 2010 tax return   A third party that makes payments of sick pay other than as an agent of the employer is liable for federal income tax withholding (if requested by the employee) and the employee part of the social security and Medicare taxes. Amendment to 2010 tax return   The third party is also liable for the employer part of the social security and Medicare taxes, and the FUTA tax, unless the third party transfers this liability to the employer for whom the employee normally works. Amendment to 2010 tax return This liability is transferred if the third party takes the following steps. Amendment to 2010 tax return Withholds the employee social security and Medicare taxes from the sick pay payments. Amendment to 2010 tax return Makes timely deposits of the employee social security and Medicare taxes. Amendment to 2010 tax return Notifies the employer for whom the employee normally works of the payments on which employee taxes were withheld and deposited. Amendment to 2010 tax return The third party must notify the employer within the time required for the third party's deposit of the employee part of the social security and Medicare taxes. Amendment to 2010 tax return For instance, if the third party is a monthly schedule depositor, it must notify the employer by the 15th day of the month following the month in which the sick pay payment is made because that is the day by which the deposit is required to be made. Amendment to 2010 tax return The third party should notify the employer as soon as information on payments is available so that an employer required to make electronic deposits can make them timely. Amendment to 2010 tax return For multi-employer plans, see the special rule discussed next. Amendment to 2010 tax return Multi-employer plan timing rule. Amendment to 2010 tax return   A special rule applies to sick pay payments made to employees by a third-party insurer under an insurance contract with a multi-employer plan established under a collectively bargained agreement. Amendment to 2010 tax return If the third-party insurer making the payments complies wi