Had a client bring in an IRS letter yesterday about not having filed this farm payroll tax report. He had one laborer who earned $115 total for the year. Didn't there used to be something about an exclusion or not having to report or make a W-2 for farm workers making less than $150 in a pay period -- quarter?/ year?
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Instructions for Form 943:
The $150 test or the $2,500 test. All cash wages that
you pay to farmworkers are subject to social security and
Medicare taxes and federal income tax withholding for
any calendar year that you meet either of these tests:
• You pay an employee cash wages of $150 or more in
a year for farmwork.
• The total (cash and noncash) wages that you pay to all
farmworkers is $2,500 or more.
If the $2,500-or-more test for the group is not met, the
$150-or-more test for an individual still applies.
Exceptions. Special rules apply to certain
hand-harvest laborers who receive less than $150 in
annual cash wages. For more information, see section 4
of Pub. 51 (Circular A). -
The exception in Pub 51 says:
Exceptions. The $150 and $2,500 tests do not apply
wages that you pay to a farmworker who receives less than
$150 in annual cash wages and the wages are not subject
to social security and Medicare taxes, or federal income
tax withholding, even if you pay $2,500 or more in that year
to all of your farmworkers if the farmworker:
• Is employed in agriculture as a hand-harvest laborer,
• Is paid piece rates in an operation that is usually
paid on a piece-rate basis in the region of employ-
ment,
• Commutes daily from his or her home to the farm,
and
• Had been employed in agriculture less than 13
weeks in the preceding calendar year.
Amounts that you pay to these seasonal farmworkers,
however, count toward the $2,500-or-more test to deter-
mine whether wages that you pay to other farmworkers are
subject to social security and Medicare taxes.Comment
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TTB, page 23-6 deals with the FUTA issue. Employers that pay cash wages of less than $20,000 during any calendar quarter in 2005 or 2006 are not subject to FUTA.Comment
Comment