Publication 80 - (Circular Ss),federal Tax Guide For Employers In The U.s. Virgin Islands, Guam, American Samoa, And The Commonwealth Of The Northern Mariana Islands Page 5
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24liable for the taxes. See Internal Revenue Code section
owe a penalty unless you have reasonable cause. You
3509 for details.
should ask the employee to show you his or her social
security card. The employee may show the card if it is
IRS help. If you want the IRS to determine if a worker is an
available. You may, but you are not required to, photocopy
employee, file Form SS-8, Determination of Worker Status
the social security card if the employee provides it.
for Purposes of Federal Employment Taxes and Income
If an employee does not have a social security card or
Tax Withholding.
needs a new one, the employee should apply for one on
Form SS-5, Application for a Social Security Card, and
Farm Crew Leaders
submit the necessary documentation. See the back cover
of this publication for information on how to get and where
You are an employer of farmworkers if you are a crew
to send the form. The employee must complete and sign
leader. A crew leader is a person who furnishes and pays
Form SS-5; it cannot be filed by the employer. If your
(either on his or her own behalf or on behalf of the farm
employee has applied for an SSN but has not received the
operator) workers to do farmwork for the farm operator. If
card before you must file your Form W-2 reports and you
there is no written agreement between you and the farm
are filing your reports on paper, enter “Applied For” in box
operator stating that you are his or her employee, and if
d. Enter all zeroes in the SSN block if filing electronically or
you pay the workers (either for yourself or for the farm
on magnetic media. When the employee receives the
operator), then you are a crew leader.
SSN, file Form W-2c, Corrected Wage and Tax Statement,
with SSA to show the employee’s SSN.
2. Employer Identification
Note. Record the name and number of each employee
exactly as they appear on his or her social security card. If
Number (EIN)
the employee’s name is not correct as shown on the card
(for example, because of marriage or divorce), the em-
An employer identification number (EIN) is a nine-digit
ployee should request a corrected card from the SSA.
number that the IRS issues. Its format is 00-0000000. It is
Continue to use the old name until the employee shows
used to identify the tax accounts of employers and certain
you the new social security card with the corrected name.
other organizations and entities that have no employees.
Employees who apply for social security cards must
Use your EIN on all of the items that you send to the IRS
supply proof of age, identity, and citizenship. If they are not
and SSA for your business.
citizens of the United States, they must submit evidence of
If you do not have an EIN, request one on Form SS-4,
their alien status.
Application for Employer Identification Number. Form SS-4
If your employee is given a new social security card
contains information on how to apply for an EIN by mail,
following an adjustment to his or her resident status that
fax, or telephone. You can also apply online at
shows a different name or SSN, file a Form W-2c for the
most current year only.
If you do not have an EIN by the time a return is due and
you are filing a paper return, enter “Applied For” and the
date that you applied for it in the space shown for the
4. Taxable Wages
number. If you took over another employer’s business, do
not use that employer’s EIN.
Generally, all wages are subject to social security and
You should have only one EIN. If you have more than
Medicare tax (and FUTA tax for U.S. Virgin Islands em-
one, notify the Internal Revenue Service office where you
ployers). However, wages subject to social security tax
file your return. List the EINs that you have, the name and
and FUTA tax are limited by a wage base amount that you
address to which each number was assigned, and the
pay to each employee for the year. After you pay $90,000
address of your principal place of business. The IRS will
to an employee in 2005, including tips, do not withhold
tell you which EIN to use.
social security tax on any amount that you later pay to the
For more information, see Publication 1635, Under-
employee for the year. The wage base for FUTA tax is
standing Your EIN, or Publication 583, Starting a Business
$7,000 for 2005. All wages are subject to Medicare tax.
and Keeping Records.
The wages may be in cash or in other forms, such as an
automobile for personal use. Wages include salaries, va-
cation allowances, bonuses, commissions, and fringe ben-
3. Employee’s Social Security
efits. It does not matter how payments are measured or
Number (SSN)
paid.
See the table in section 12 for exceptions to social
security, Medicare, and FUTA taxes on wages. See sec-
An employee’s social security number (SSN) consists of
tions 5 and 6 for a discussion of how the rules apply to tips
nine digits separated as follows: 000-00-0000. You must
and farmworkers.
get each employee’s name and SSN because you must
enter them on the employee’s wage and tax statement,
Social security and Medicare taxes apply to most pay-
ments of sick pay, including payments by third parties such
Form W-2VI, W-2GU, W-2AS, or W-2CM. If you do not
report the employee’s correct name and SSN, you may
as insurance companies. Special rules apply to the report-
Page 5
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