One of the trickiest parts of running a business is the sheer amount of paperwork involved. If you dread the thought of figuring out what payroll forms you need to file and when you need to file them, this post is for you.
This list clears up all the confusion about federal payroll forms.
Of course, each state has its own payroll forms too. Some cities have extra hoops for you to jump through as well. We haven’t covered all of those. But if you get your federal payroll forms right, you’ve done the lion’s share of the work.
1. Form 940
- What is Form 940?
It is an Employer’s Annual Federal Unemployment (FUTA) Tax Return.
- When is it required?
If employers have paid $1,500 or more to a W-2 employee in the last year OR if employers had at least one employee who worked more than 20 weeks in the last year.
- Who is responsible?
Employers, and they must file by the Form 940 January 31. The FUTA tax is not deducted from an employee’s wages.
A Form 940 reports an employer’s annual payroll expenses to determine how much FUTA tax the employer owes the IRS. Businesses are taxed on up to $7,000 per employee at a rate set by the federal government. Right now, that number is 6%.
This means that if you pay two employees $7,000 apiece during one year, you’ll pay $840 into FUTA. You can think of FUTA as a big pool of money that all employers pay into. If an employee gets laid off or let go for reasons unrelated to their performance, they can receive unemployment compensation from the FUTA pool.
2. Form 941
- What is Form 941?
It is an Employer’s Quarterly Federal Tax Return.
- When is it required?
In general, any employer with one or more employees on their payroll must file a Form 941. However, employers who only employ workers for three or fewer quarters do not need to file a Form 941. Neither do employers of agricultural or household employees.
- Who is responsible?
Employers are responsible for filing Form 941 every quarter. The four filing deadlines are:
- April 30
- July 31
- October 31
- January 31
The Form 941 will tell the IRS how many employees you have and the total wages you paid these employees. It also reports the amount of Medicare, income, and Social Security taxes you withheld from your employees’ wages.
You’ll also use the Form 941 to pay the employer portion of Medicare or Social Security tax.
3. Form 943
- What is Form 943?
It is a form an employer must file if they paid wages to one or more agricultural employees.
- When is it required?
If you pay a single farmworker cash wages of $150 or more during a single calendar year OR pay all your farm employees cash and non-cash wages equaling $2,500, you must file Form 943. Non-cash wages include things like food and lodging.
- Who is responsible?
Employers must file the Form 943 by January 31 of each year.
The Form 943 is basically a farm employer’s version of the Form 941. It reports how much an agricultural employer has paid each employee, along with the total federal income, Social Security, and Medicare taxes withheld.
But it’s important to note that if an employer employs both farm and non-farm workers, they must file a Form 943 and a Form 941.
4. Form 944
- What is Form 944?
It is an Employer’s Annual Federal Tax Return.
- When is it required?
The Form 944 is for employers whose annual tax liability—amount of taxes owed—is $1,000 or less. It allows these employers to pay federal income, Medicare, and Social Security taxes once per year instead of once per quarter.
- Who is responsible?
Employers are responsible for filing a Form 944 by January 31.
One of the most important things to remember about Form 944 is that an employer must obtain written approval from the IRS to file a Form 944 instead of a Form 941.
You must be able to prove that you paid W-2 employees—not independent contractors—a total of about $4,000 or less throughout an entire year. This is what would put your tax burden at $1,000 or less. To see if you qualify, call or write to the IRS.
This form is basically the IRS’s way of making filing taxes easier for the smallest businesses in the country.
5. Form 945
- What is Form 945?
It is a form used to file an Annual Return of Withheld Federal Income Tax.
- When is it required?
A Form 945 is only required if an employer or business withheld federal income tax for non-payroll payments. This includes things like pension payments, gambling winnings, military retirement, gaming profits, and backup withholding for independent contractors.
- Who is responsible?
Employers are responsible for filing Form 945 by January 31.
In short, if you have any non-payroll tax liability for the previous calendar year, you must file Form 945. Did you distribute retirement funds? You’ll need to file a Form 945. Did you hire an independent contractor who gave you an incorrect Tax Identification Number (TIN)? You may receive a letter from the IRS instructing you to withhold taxes from their future pay.
This is the non-payroll payment you’ll need to report on a Form 945.
6. Form I-9
- What is Form I-9?
It is a form used for Employment Eligibility Verification.
- When is it required?
All employers based in the United States of America must provide Form I-9 to each of their employees.
- Who is responsible?
Employers are responsible for providing the form, but both the employee and the employer must fill out the form.
Every time an employer hires a new employee, the employee must fill out and sign the I-9 on the first day of their employment. The employer has three days after that to fill out the employer section of the form.
Form I-9 must be kept in that employee’s file. The Department of Homeland Security, the Immigrant and Employee Rights Section of the Department of Justice, and the Department of Labor can inspect your I-9 records with three days’ notice.
7. Form W-4
- What is Form W-4?
It is the Employee’s Withholding Certificate.
- When is it required?
All employees must fill out a Form W-4 when they’re first hired by a company. The IRS also recommends filling out a new W-4 each year or when the employee’s financial situation changes.
- Who is responsible?
The employer is responsible for giving the Form W-4 to each employee, and employees are responsible for filling out the form and returning it to their employer.
Each completed W-4 form shows an employee’s filing status, number of credits—such as the Child and Dependent Care Credit—amount of income from other jobs or sources, and number of deductions.
Employers use the information on the W-4 form to withhold the correct amount of money from each person’s paycheck. While you don’t have to file the W-4s with the IRS, you should keep them in a secure location in case the IRS directs you to share them.
8. Form W-2
- What is Form W-2?
It is the Wage and Tax Statement.
- When is it required?
If employers pay an employee $600 or more in any given tax year, a Form W-2 is required.
- Who is responsible?
Employers must file a W-2 for each employee with the IRS by January 31. They must also give each employee a copy of their W-2 by that date.
The Form W-2 is what allows employees to file their own taxes. That’s why it’s crucial to make sure you stay on top of sending it to the IRS and your employees on time. The Form W-2 tells an employee the amount you paid them during the year.
It also shows how much Social Security, income, and Medicare tax was withheld from that pay. In short, the W-2 is what shows employees whether or not they get a tax return—or whether they still owe taxes to the federal government.
9. Form W-9
- What is Form W-9?
It is the Request for Taxpayer Identification Number and Certification.
- When is it required?
Businesses should collect a Form W-9 from any non-employees—for example, independent contractors—they pay $600 or more a year.
- Who is responsible?
Employers are responsible for providing the Form W-9 to any independent contractor or non-employee entity if the employer paid them $600 or more in a single calendar year. The independent contractor or non-employee entity is responsible for filling the form out and sending it back to the company.
A Form W-9 doesn’t need to be filed with the IRS. It’s simply a way for companies to collect a non-employee’s taxpayer identification number (TIN) and other relevant information to help companies prepare a Form 1099-NEC.
If you work with an independent contractor and aren’t sure if you’ll end up paying them more than $600 in a calendar year, send them a Form W-9 anyway. That way you’ll have it on hand when tax time comes.
Form W-9 is only used for U.S. citizens and resident aliens. There’s another form, the W-8BEN, for foreign-based individuals who work as independent contractors for U.S.-based businesses.
10. Form 1099-NEC/1099-MISC
- What is Form 1099-NEC/1099-MISC?
Before the 2020 tax year, the Form 1099-MISC was used to report all forms of miscellaneous compensation, including payments to independent contractors, freelancers, and self-employed individuals.
As of the 2021 tax year, however, the Form 1099-MISC is only for employers to report miscellaneous compensation for things like awards, rent, attorney fees, and medical payments.
The Form 1099-NEC now covers all non-employee compensation made to freelancers, independent contractors, sole proprietors, and self-employed individuals.
- When is it required?
Any employer or individual who paid $10 or more in royalties or $600 or more in other miscellaneous payments in one calendar year must submit a Form 1099-MISC or 1099-NEC to the payee.
- Who is responsible?
Employers/entities are responsible for filling out the forms and submitting them to the payees by January 31 of each year. The Forms 1099-MISC and 1099-NEC must also be filed with the iRS by March 1.
The payee will use the Form 1099-MISC or 1099-NEC to file their own taxes, so it’s important to stay on top of these deadlines.
11. Form W-8BEN/W-8BEN-E
- What is Form W-8BEN/W-8BEN-E?
Get ready, because this one’s a mouthful. The Form W-8BEN is the Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals). The form W-8BEN-E is the same, but for Entities instead of Individuals.
- When is it required?
Any non-U.S. individual who receives an income from U.S.-based sources must file a Form W-8BEN. Any non-U.S. entity that receives income from U.S.-based sources must file a Form W-8BEN-E.
- Who is responsible?
Foreign individuals or entities are responsible for filling out Form W-8BEN or W-8BEN-E, but payers/withholding agents (the U.S.-based companies that contracted with the foreign individuals or entities) can make it easier by supplying them with the blank form to fill out and return to them.
The W-8BEN/W-8BEN-E gives U.S.-based businesses information about how much pay to withhold from the contractor’s compensation. The standard for foreign individuals or entities is 30%. But some countries have tax treaties with the U.S. that allow for a reduced tax rate or a tax exemption.
After receiving the form W-8BEN or W-8BEN-E from foreign individuals or entities, the U.S.-based payers will use the information to withhold the appropriate amount of taxes.
12. Form W-3
- What is Form W-3?
It is a form used for the Transmittal of Wage and Tax Statements.
- When is it required?
Any employer who sends out two or more Form W-2s must fill out a Form W-3 to summarize the payments and withholdings reported on all of its employees’ Form W-2s.
- Who is responsible?
The employer, and they must file a Form W-3 to the IRS and the Social Security Administration (SSA) by January 31 of each year.
Most employers in the United States are required to file a Form W-3 with the IRS and SSA. That’s because most employers pay their employees $600 or more in a single calendar year. Any employer who pays $600 or more to each employee must request Form W-2 from every employee. If you only have one employee who earns more than $600 a year, you won’t need to file a Form W-3 because the total amount paid to the employee will show up on the W-2.
When there are multiple W-2 forms, you’ll add up the information on each one—compensation paid, taxes withheld, and dependent care benefits provided, for example. You’ll then report the totals on the W-3.
13. Form 1096
- What is Form 1096?
It is a form used to file an Annual Summary and Transmittal of U.S. Information Returns
- When is it required?
If you are filing taxes by mail and are including any of the following forms in your tax return, you will need to submit a Form 1096 for each one:
- Form 1097
- Form 1098
- Form 1099
- Form 3921
- Form 3922
- Form 5498
- Form W-2G
Keep in mind that there are multiple versions of some of these forms. For example, if you are filing both a Form 1099-MISC and a Form 1099-NEC, you’ll need to fill out two separate 1096 forms for each one.
The Form 1096 essentially serves as a cover letter for the forms listed above.
- Who is responsible?
Employers are responsible for filing 1096 forms if they are filing by mail, and the forms must be sent by:
- January 31 if the Form 1096 is filed with the Form 1099-NEC
- February 28 if the Form 1096 is sent with Forms 1097, 1098, 1099, 3921, 3922, or W-2G
- May 31 if the Form 1096 is sent with the Form 5498
When you file your taxes electronically, you do not need to include a Form 1096. If you have more than 250 of any single form to file, you must file your taxes electronically with an approved tax software or through the IRS FIRE System.
14. Form 1095-C
- What is Form 1095-C?
It is a form used to report Employer-Provided Health Insurance Offer and Coverage.
- When is it required?
All employers with 50 or more full-time employees must file Form 1095-C for each employee.
- Who is responsible?
Applicable Large Employers (ALEs), or any employer with 50 or more full-time employees, and they must file by February 28 of each year. They must also furnish the employee’s copy of the Form 1095-C by February 28.
The Form 1095-C helps enforce the Affordable Care Act, which requires all ALEs to provide health insurance coverage to employees. The Form 1095-C tells employees what types of coverage are available, what the lowest premiums are, and which months of the calendar year the coverage was available.
15. Form 1094-C
- What is Form 1094-C?
It is a form used for the Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns.
- When is it required?
All employers with 50 or more full-time employees must file Form 1094-C as the cover sheet for Form 1095-C.
- Who is responsible?
Employers are responsible for filing the Form 1094-C along with the 1095-C. They must file these forms with the IRS by February 28 of each year.
If you have more than 250 Form 1095-Cs to file, you must file electronically.
16. Form 1042-S
- What is Form 1042-S?
It is the form used to report a Foreign Person’s U.S. Source Income Subject to Withholding.
- When is it required?
A Form 1042-S must be filed anytime a U.S.-based employer or withholding agent pays a foreign person an income. This income could include things like compensation for work performed, scholarships, royalties, real estate income, and gambling winnings.
- Who is responsible?
Employers or withholding agents are responsible for filing the Form 1042-S, and they must do so by March 15 of each year. A copy must also be sent to the employee or entity for whom the form was filed.
This form must be filed even if no taxes were withheld from the foreign person or entity’s payment. A Form 1042-S must be filed along with a Form 1042-T.
17. Form 1042-T
- What is Form 1042-T?
It is the Annual Summary and Transmittal of Forms 1042-S.
- When is it required?
The Form 1042-T is required to be filed alongside the Form 1042-S, the Foreign Person’s U.S. Source Income Subject to Withholding. Anytime an employer, university, or other withholding agent is required to file a 1042-S, they must also file a 1042-T.
- Who is responsible?
Withholding agents such as employers, universities, individuals, or businesses must file Form 1042-T and Form 1042-S by March 15 of each year.
The 1042-T provides the IRS with a summary of all the money paid to foreign persons from a single withholding agent, as reported on the 1042-S. It also reports how much federal tax, if any, was withheld from all the attached 1042-S forms.
18. Form 8850
- What is Form 8850?
It is the Pre-Screening Notice and Certification Request for the Work Opportunity Credit.
- When is it required?
Employers who wish to take advantage of the Work Opportunity Tax Credit (WOTC) must fill out Form 8850 and submit it to their state workforce agency (SWA), not the IRS.
- Who is responsible?
Employers are responsible for providing the form to job applicants who may qualify for the WOTC, but the form is voluntary for the applicants to fill out. Employers must submit the form no later than the 28th calendar day after the new hire’s start date.
This form is often used to certify whether certain targeted groups of people qualify for WOTC. The WOTC program gives employers a tax credit for hiring of ex-felons, summer youth employees, SNAP benefit recipients, and other targeted groups that face a barrier to employment.
19. Form CT-1
- What is Form CT-1?
It is the Employer’s Annual Railroad Retirement Tax Return.
- When is it required?
A Form CT-1 is how rail employers report taxes put forth by the Railroad Retirement Tax Act (RRTA). If you paid one or more employees taxable compensation under the RRTA, you must file a form CT-1.
- Who is responsible?
Employers must submit Form CT-1 by February 28 of each year.
Confused about who has to pay the CT-1 and when? It’s an unusual form to need to file unless you work in the railway industry.
Railway employers are not subject to FUTA and Federal Insurance Contributions Act (FICA), like most employers. Instead, railway employers must comply with a separate system, which is overseen by the Railroad Retirement Board and the IRS.
All railroad employers must withhold two tiers of taxes:
- Tier 1 RRTA Tax: benefits equivalent to Social Security and Medicare
- Tier 2 RRTA Tax: private pension benefit
So if you’re a railway employer who paid compensation that is subject to this RRTA tax, you’ll need to fill out a Form CT-1.
20. Form 8027
- What is Form 8027?
It is the Employer’s Annual Information Return of Tip Income and Allocated Tips.
- When is it required?
An employer must file a Form 8027 if they are a food or beverage establishment AND employ workers who regularly receive tips from customers AND employ 10 or more people on a given day.
- Who is responsible?
Employers must file a Form 8027 by February 28 by mail or March 31 electronically.
If you pass the IRS’s 10-employee test and otherwise qualify as a large food or beverage establishment, keeping careful record of your business’s tip income is incredibly important. Any employee who makes more than $20 in monthly tip income will need to file Form 4070s to report their tips to you.
The Form 4070s will help you fill out your Form 8027.
As you fill out the Form 8027, you’ll find out whether or not your employees’ total tips make up 8% of your gross sales for the year. If they do not, you’ll need to allocate the difference.
