Overview: The most important payroll process for all employers is undoubtedly withholding for federal, state and local income and employment taxes and timely remitting the amounts collected to the appropriate government agencies. In turn, proper withholding leads to correct employee paychecks, and timely remitting of withheld taxes avoids serious employer penalties.
The income and employment tax withholding process requires an employer to understand:
Author: Rena Pirsos, JD, Legal Editor
Updated to reflect forthcoming new hire notice provisions with respect to noncompete restrictions.
Updated to reflect a reduction in the Waterfront of New York Harbor Commission Assessment rate, effective July 1, 2019.
Updated to reflect forthcoming changes in the e-filing threshold for information returns, and final regulations on Form W-2 SSN truncation, effective for forms required to be filed as of January 1, 2021.
Updated to reflect amended penalty provisions in Minnesota, effective July 1, 2019.
Most states require employers to file annual reconciliation returns after the end of each calendar year. This chart summarizes each state's filing requirements.
Updated to reflect emergency rules amending annual Form W-2 reporting requirements, effective April 26, 2019.
Updated to include emergency rules amending Missouri withholding, effective April 26, 2019, and forthcoming rate reductions in Arkansas, effective January 1, 2020, and January 1, 2021.
Updated to reflect emergency rules amending supplemental wage withholding, effective April 26, 2019.
Updated to include a new IRC reference date in Hawaii.
An explanation of the process of payroll withholding of federal, state and local income taxes and Social Security and Medicare (FICA) taxes.