(Circular A), Agricultural Employer's Tax Guide

(Including 2005 Wage Withholding and Advance Earned Income Credit Payment Tables)

Taxmap/pubs/p51-000.htm#TXMP2f584229 What's New

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Additional federal holiday.

January 20, 2005, is Inauguration Day and has been designated as a federal holiday for tax purposes. Tax returns due on that day may be filed on the next business day. Also, January 20, 2005, is not a banking day under federal tax deposit rules.

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Social Security and Medicare taxes for 2005.

The social security wage base for 2005 is $90,000. There is no wage base limit for Medicare tax. The tax rate remains 6.2% for social security and 1.45% for Medicare tax.

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Increase to FUTA tax deposit threshold.

The Treasury Department recently amended Regulations section 31.6302(c)-3 to increase the accumulated FUTA tax deposit threshold from $100 to $500. The $500 threshold applies to FUTA tax deposits required for taxes reported on Forms 940, 940-EZ, and 940-PR, Employer's Annual Federal Unemployment (FUTA) Tax Return for tax periods beginning after December 31, 2004. For more information about this and other important tax changes, see Publication 553, Highlights of 2004 Tax Changes.

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Household employees.

Household employees, such as a maid, babysitter, gardener, or cook, who perform domestic service on a farm operated for profit are not agricultural employees. However, they may still be employees for social security, Medicare, and federal unemployment taxes. See the Instructions for Schedule H (Form 1040).

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New Form W-4 in Spanish.

If your Spanish-speaking employees prefer, they may claim withholding allowances using Form W-4(SP), Certificado de Exención de la Retención del(la) Empleado(a), in place of Form W-4, Employee's Withholding Allowance Certificate. Instructions, in Spanish, for completing Form W-4 or Form W-4(SP) are available in Publication 579SP, Cómo Preparar la Declaración de Impuesto Federal. See Quick and Easy Access to Tax Help and Forms on page 56 for information on obtaining Form W-4(SP), Publication 579SP, and other tax forms and publications.

Taxmap/pubs/p51-000.htm#TXMP078adca7 Reminders

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Electronic payment.

Now, more than ever before, businesses can enjoy the benefits of paying their taxes electronically. Whether you rely on a tax professional or handle your own taxes, IRS offers you convenient programs to make it easier.

Spend less time and worry on taxes and more time running your business. Use Electronic Federal Tax Payment System (EFTPS) to your benefit.

For EFTPS, visit www.eftps.gov or call EFTPS Customer Service at 1-800-555-4477.

Use the electronic options available from IRS and make filing and paying taxes easier.

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Change of address.

If you changed your business mailing address or business location, notify the IRS by filing Form 8822, Change of Address. For information on how to change your address for deposit coupons, see Making deposits with FTD coupons in section 7.

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Web-based application for an EIN.

You can apply for an employer identification number (EIN) online by visiting the IRS website at www.irs.gov/smallbiz.

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When you hire a new employee.

Ask each new employee to complete the 2005 Form W-4, Employee's Withholding Allowance Certificate. Also, ask the employee to show you his or her social security card so that you can record the employee's name and social security number accurately. If the employee has lost the card or recently changed names, have the employee apply for a duplicate or corrected card. If the employee does not have a card, have the employee apply for one on Form SS-5, Application for a Social Security Card. See section 1.

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Eligibility for employment.

You must verify that each new employee is legally eligible to work in the United States. This includes completing the U.S. Citizenship and Immigration Services (USCIS) Form I-9, Employment Eligibility Verification. You can get the form from USCIS offices or by calling 1-800-870-3676. Contact the USCIS at 1-800-375-5283, or visit the USCIS website at www.uscis.gov for further information.

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New hire reporting.

You are required to report any new employee to a designated state new hire registry. Many states accept a copy of Form W-4 with employer information added. Call the Office of Child Support Enforcement at 202-401-9267 or visit its website at www.acf.hhs.gov/programs/cse/newhire/ for more information.

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When a crew leader furnishes workers to you.

Record the crew leader's name, address, and EIN. See sections 2, 10, and 11.

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Information returns.

You generally must furnish Form W-2, Wage and Tax Statement, to each employee by January 31. You also may have to file information returns to report certain types of payments made during the year. For example, you must file Form 1099-MISC, Miscellaneous Income, to report payments of $600 or more to persons not treated as employees (for example, independent contractors) for services performed for your trade or business. For general information about Forms 1099 and for information about required electronic or magnetic media filing, see the 2005 General Instructions for Forms 1099, 1098, 5498, and W-2G. Also see the separate instructions for each information return that you file (for example, 2005 Instructions for Form 1099-MISC). Do not use Form 1099 to report wages or other compensation you paid to employees; report these on Form W-2. See the separate Instructions for Forms W-2 and W-3 for details.

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Private delivery services.

You can use certain private delivery services designated by the IRS to send tax returns and payments. The list includes only the following.

• DHL Express (DHL): DHL Same Day Service; DHL Next Day 10:30 am; DHL Next Day 12:00 pm; DHL Next Day 3:00 pm; and DHL 2nd Day Service.
• Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2 Day, FedEx International Priority, and FedEx International First.
• United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, and UPS Worldwide Express.

Your private delivery service can tell you how to get written proof of the mailing date.

Private delivery services cannot deliver items to P.O. boxes. You must use the U.S. Postal Service to mail any item to an IRS P.O. box address.

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Unresolved tax issues.

If you have attempted to deal with an IRS problem unsuccessfully, you should contact the Taxpayer Advocate. The Taxpayer Advocate independently represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels.

While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that your case is given a complete and impartial review.

Your assigned personal advocate will listen to your point of view and will work with you to address your concerns. You can expect the advocate to provide:

• A "fresh look" at a new or ongoing problem,
• Timely acknowledgment,
• The name and phone number of the individual assigned to your case,
• Updates on progress,
• Timeframes for action,
• Speedy resolution, and
• Courteous service.

When contacting the Taxpayer Advocate, you should provide the following information:

• Your name, address, and employer identification number (EIN).
• The name and telephone number of an authorized contact person and the hours when he or she can be reached.
• The type of tax return and year(s) involved.
• A detailed description of the problem.
• Previous attempts to solve the problem and the office that had been contacted.
• A description of the hardship that you are facing (if applicable).

You may contact a Taxpayer Advocate online at www.irs.gov/advocate or by calling a toll-free number, 1-877-777-4778. Persons who have access to TTY/TDD equipment may call 1-800-829-4059 and ask for Taxpayer Advocate assistance. If you prefer, you may call, write, or fax the Taxpayer Advocate office in your area. See Publication 1546, The Taxpayer Advocate Service of the IRS, for a list of addresses and fax numbers.

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Information reporting call site.

The IRS operates a centralized call site to answer questions about reporting on Forms W-2, W-3, 1099, and other information returns. If you have questions related to reporting on information returns, you may call 1-866-455-7438 (toll free) or 304-263-8700 (not toll free). The call site can also be reached by email at mccirp@irs.gov.

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Photographs of missing children.

The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

Taxmap/pubs/p51-000.htm#TXMP3679ae8e Calendar

The following are important dates and responsibilities. See section 7 for information about depositing taxes reported on Forms 941, 943, and 945. Also see Publication 509, Tax Calendars for 2005.

Note. If any date shown below falls on a Saturday, Sunday, or legal holiday, the due date is the next business day. A statewide legal holiday delays a filing due date only if the IRS office where you are required to file is located in that state. For any due date, you will meet the "file" or "furnish" requirement if the form is properly addressed and mailed First-Class or sent by an IRS-designated delivery service by the due date. See Private delivery services on page 2.

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By January 31

• File Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, with the Internal Revenue Service. See section 8. If you deposited all Form 943 taxes when due, you have 10 additional days to file.
• Furnish each employee with a completed Form W-2, Wage and Tax Statement.
• Furnish each recipient to whom you paid $600 or more in nonemployee compensation with a completed Form 1099 (for example, Form 1099-MISC, Miscellaneous Income).
• File Form 940 or Form 940-EZ, Employer's Annual Federal Unemployment (FUTA) Tax Return. See section 10. But if you deposited all the FUTA tax when due, you have 10 additional days to file.
• File Form 945, Annual Return of Withheld Federal Income Tax, to report any nonpayroll income tax withheld during 2004.

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By February 15

Ask for a new Form W-4 from each employee who claimed exemption from income tax withholding last year.

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On February 16

Begin withholding income tax for any employee who previously claimed exemption from income tax withholding but has not given you a new Form W-4 for the current year. If the employee does not give you a new Form W-4, withhold as if he or she is single, with zero withholding allowances. The Form W-4 previously given to you claiming exemption is now expired. See section 5.

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By February 28

File Forms 1099 and 1096. File Copy A of all Forms 1099 with Form 1096, Annual Summary and Transmittal of U.S. Information Returns, with the IRS. For electronically filed returns, see By March 31 below.

File Forms W-2 and W-3. File Copy A of all Forms W-2 with Form W-3, Transmittal of Wage and Tax Statements, or your magnetic media wage report to the Social Security Administration (SSA). For electronically filed returns, see By March 31 below.

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By March 31

File electronic Forms W-2 and 1099. File electronic (not magnetic media or paper) Forms W-2 with the SSA and Forms 1099 with the IRS. See Social Security's Employer Reporting Instructions and Information web page at www.socialsecurity.gov/employer for more information about filing Forms W-2 and W-2c electronically.

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By April 30, July 31, October 31, and January 31

Deposit FUTA taxes. Deposit FUTA tax due if it is more than $500.

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Before December 1

Remind employees to submit a new Form W-4 if their withholding allowances have changed or will change for the next year.

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On December 31

Form W-5, Earned Income Credit Advance Payment Certificate, expires. Employees who want to receive advance payments of the earned income credit for the next year must give you a new Form W-5.

Introduction

This publication is for employers of agricultural workers (farmworkers). It contains information that you may need to comply with the laws for agricultural labor (farmwork) relating to social security and Medicare taxes, FUTA tax, and withheld federal income tax.

If you have nonfarm employees, see Publication 15 (Circular E), Employer's Tax Guide. If you have employees in the U.S. Virgin Islands, Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands, see Publication 80 (Circular SS). Publication 15-A, Employer's Supplemental Tax Guide, contains more employment-related information, including information about sick pay and pension income. Publication 15-B, Employer's Tax Guide to Fringe Benefits, contains information about the employment tax treatment and valuation of various types of noncash compensation.

Taxmap/pubs/p51-000.htm#TXMP0094ff9f Ordering publications and forms.

See Form 7018-A, Employer's Order Blank for 2005 Forms, and Quick and Easy Access to Tax Help and Forms at the end of this publication.

Taxmap/pubs/p51-000.htm#TXMP4dc8efc3 Telephone help.

You can call the IRS with your employment tax questions at 1-800-829-4933.

Taxmap/pubs/p51-000.htm#TXMP73aa2c1b Help for people with disabilities.

Telephone help is available using TTY/TDD equipment. You can call 1-800-829-4059 with any question or to order forms and publications. See your tax package for the hours of operation.

Taxmap/pubs/p51-000.htm#TXMP4912b38d Comments and Suggestions.

We welcome your comments about this publication and your suggestions for future editions. You can email us while visiting our website at www.irs.gov. You can also write to us at the following address:

 
Internal Revenue Service  
TE-GE Forms and Publications Branch  
SE:W:CAR:MP:T:T  
1111 Constitution Ave. NW, IR-6406  
Washington, DC 20224

We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.

Useful items

You may want to see:

Taxmap/pubs/p51-000.htm#TXMP033a5c00 1. Taxpayer Identification Numbers

TIN

If you are required to withhold any income, social security, or Medicare taxes, you will need an employer identification number (EIN) for yourself and you will need the social security number (SSN) of each employee and the name of each employee exactly as shown on the employee's social security card.

Taxmap/pubs/p51-000.htm#TXMP6ad56d49 Employer identification number (EIN).

The EIN is a nine-digit number that the IRS issues. The digits are arranged as follows: 00-0000000. It is used to identify the tax accounts of employers and certain others who have no employees. Use your EIN on all of the items that you send to the IRS and SSA.

If you do not have an EIN, request one on Form SS-4, Application for Employer Identification Number. The Instructions for Form SS-4 contain information on how to apply for an EIN online or by mail, fax, or telephone. You may apply for an EIN online by visiting the IRS website at www.irs.gov/smallbiz.

If you do not have an EIN by the time a return is due, write "Applied For" and the date you applied for it in the space shown for the number. If you took over another employer's business, do not use that employer's EIN.

See Depositing without an EIN in section 7 if you must make a tax deposit and you do not have an EIN.

You should have only one EIN. If you have more than one, notify the IRS office where you file your return. List the EINs that you have, the name and address to which each number was assigned, and the address of your principal place of business. The IRS will tell you which EIN to use.

For more information, see Publication 1635, Understanding Your EIN, or Publication 583, Starting a Business and Keeping Records.

Taxmap/pubs/p51-000.htm#TXMP22b1a0d9 Social security number.

An employee's social security number (SSN) consists of nine digits arranged as follows: 000-00-0000. You must obtain each employee's name and SSN exactly as shown on the employee's social security card because you must enter them on Form W-2. You may, but are not required to, photocopy the social security card if the employee provides it. If you do not show the employee's correct name and SSN on Form W-2, you may owe a penalty unless you have reasonable cause. See Publication 1586, Reasonable Cause Regulations and Requirements for Missing and Incorrect Name/TINs.

Any employee without a social security card can get one by completing Form SS-5, Application for a Social Security Card, and submitting the necessary documentation. You can get Form SS-5 at SSA offices, by calling 1-800-772-1213, or from the SSA website at www.socialsecurity.gov/online/ss-5.html. The employee must complete and sign Form SS-5; it cannot be filed by the employer.

If you file Form W-2 on paper and your employee has applied for an SSN but does not have one when you must file Form W-2, enter "Applied For" on the form. If you are filing on magnetic media or electronically, enter all zeros (000-00-0000) in the social security number field. When the employee receives the SSN, file Copy A of Form W-2c, Corrected Wage and Tax Statement, with the SSA to show the employee's SSN. Furnish Copies B, C, and 2 of Form W-2c to the employee. Up to five forms W-2c per Form W-3c may be created and submitted to the SSA over the Internet. For more information, visit Social Security's Employer Reporting Instructions and Information web page at www.socialsecurity.gov/employer. Advise your employee to correct the SSN on his or her original Form W-2.

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Note.Record the name and number of each employee exactly as they are shown on the employee's social security card. If the employee's name is not correct as shown on the card (for example, because of marriage or divorce), the employee should request a corrected card from the SSA. Continue to report the employee's wages under the old name until he or she shows you an updated social security card with the new name.
If your employee is given a new social security card following an adjustment to his or her resident status that shows a different name or SSN, file a Form W-2c for the most current year only.

Taxmap/pubs/p51-000.htm#TXMP4403a97e IRS individual taxpayer identification numbers (ITINs) for aliens.

Do not accept an ITIN in place of an SSN for employee identification or for work. An ITIN is only available to resident and nonresident aliens who are not eligible for U.S. employment and need identification for other tax purposes. You can identify an ITIN because it is a 9-digit number beginning with the number "9" with either a "7" or "8" as the fourth digit and is formatted like an SSN (for example, 9NN-7N-NNNN).

An individual with an ITIN who later becomes eligible to work in the United States must obtain an SSN.

Taxmap/pubs/p51-000.htm#TXMP6fd4aef3 Verification of social security numbers.

The SSA offers employers and authorized reporting agents three methods for verifying employee SSNs. Both methods match employee names and SSNs.

• Telephone verification. To verify up to five names and numbers, call 1-800-772-6270.
• Telephone verification. To verify up to 50 names and numbers, contact your local social security office.
• Large volume verification. The Employee Verification Service (EVS) may be used to verify more than 50 employee names and SSNs. Paper listings are limited to 300 verifications. Preregistration is required for EVS or requests made on magnetic media. For more information, call the EVS Information Line at 410-965-7140 or visit Social Security's Employer Reporting Instructions and Information webpage at www.socialsecurity.gov/employer.

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