Instructions For Form 944-X (Rev. February 2015) (Page 10 of 13) in pdf

Form 944, line 6. Your third-party sick pay adjustment should

For Additional Medicare Tax, 0.36% (40% of the employee

have been $960 (shown as “-960.00”) because your third-party

rate of 0.9%) of wages subject to Additional Medicare Tax.

sick pay payer withheld that amount of social security and

For income tax withholding, the rate is 3.0% of wages.

Medicare taxes from your employees. You discovered the error

Unlike other lines on Form 944-X, enter in column 1 only the

in April of 2014. To correct the error, figure the difference on

corrected wages for workers being reclassified, not the amount

Form 944-X as shown.

paid to ALL employees. Enter in column 2 previously reported

wages (if any) to reclassified employees. To get the amount for

Column 1 (corrected amount)

-960.00

column 4, use the applicable section 3509 rates. If you filed the

Column 2 (from Form 944, line 6)

- (690.00)

required information returns for some employees but did not file

Column 3 (difference)

-270.00

them for other employees, be sure to use the applicable rates for

each employee when calculating the amounts in column 4 and

show your calculations on line 22. The tax correction in column 4

Here is how you would enter the numbers on Form 944-X.

will be a positive number if you increased the amount of wages

you previously reported. See the instructions for line 21, later, for

more information.

Column 1

Column 2

Column 3

(corrected amount)

(from Form 944, line 6)

(difference)

17. Subtotal

-960.00

-690.00

-270.00

Combine the amounts on lines 7–16 of column 4 and enter the

total on line 17.

Report “-270.00” as your correction in column 4.

Example: You entered “1,400.00” in column 4 of line 7,

In this example, you are claiming a credit for $270 in

“-500.00” in column 4 of line 8, and “-100.00” in column 4 of

overreported tax for your 2013 Form 944. Always enter the same

line 10. Combine these amounts and enter “800.00” in column 4

amount in column 4 (including any minus sign) that you enter in

of line 17.

column 3.

Be sure to explain the reasons for this correction on line 22.

Line 7 (column 4)

1400.00

Line 8 (column 4)

-500.00

13–16. Special Additions to Wages for Federal

Line 10 (column 4)

-100.00

Income Tax, Social Security Tax, Medicare Tax,

Line 17 (column 4)

800.00

and Additional Medicare Tax

Section 3509 provides special rates for the employee share of

social security tax, Medicare tax, Additional Medicare Tax, and

18a. Claiming or Correcting the COBRA

income tax withholding when workers are reclassified as

Premium Assistance Credit

employees in certain circumstances. The applicable rate

depends on whether you filed required information returns. An

The COBRA premium assistance credit was available

employer cannot recover any tax paid under this provision from

to an employer for premiums paid on behalf of

the employees. The full employer share of social security tax and

employees who were involuntarily terminated from

Medicare tax is due for all reclassifications.

CAUTION

employment between September 1, 2008 and May 31, 2010.

The COBRA premium assistance credit is not available for

Note. Section 3509 rates are not available if you intentionally

individuals who were involuntarily terminated after May 31, 2010.

disregarded the requirements to withhold taxes from the

Therefore, only in rare circumstances, such as instances where

employee, or if you withheld income tax but did not withhold

COBRA eligibility was delayed as a result of employer provided

social security and Medicare tax. Section 3509 rates are also not

health insurance coverage following termination, will the credit

available for certain statutory employees.

be available.

On lines 13–16 enter only corrections to wages resulting from

Enter 65% of the total COBRA premium assistance payments for

reclassifying certain workers as employees when section 3509

all assistance eligible individuals in column 1. Report the

rates are used to calculate the taxes.

premium assistance payments on this line only after the

assistance eligible individual's 35% share of the premium has

If the employer issued the required information returns, use

been paid. For COBRA coverage provided under a self-insured

the section 3509 rates as follows.

plan, COBRA premium assistance is treated as having been

For social security taxes, use the employer rate of 6.2% plus

made for each assistance eligible individual who paid 35% of the

20% of the employee rate of 6.2% (4.2% for 2011 and 2012), for

COBRA premium. Do not include the assistance eligible

a total rate of 7.44% (7.04% for 2011 and 2012) of wages.

individual's 35% of the premium in the amount entered on this

For Medicare taxes, use the employer rate of 1.45% plus 20%

line.

of the employee rate of 1.45%, for a total rate of 1.74% of

wages.

For tax periods ending before January 1, 2014, enter any

For Additional Medicare Tax, 0.18% (20% of the employee

COBRA premium assistance payments previously claimed on

rate of 0.9%) of wages subject to Additional Medicare Tax.

Form 944, line 9a, in column 2. For tax periods beginning after

For income tax withholding, the rate is 1.5% of wages.

December 31, 2013, enter -0- in column 2, unless you are

correcting a COBRA premium assistance payment previously

If the employer did not issue the required information returns,

reported on a Form 944-X. If you or the IRS previously corrected

use the section 3509 rates as follows.

the amount reported, the amount entered in column 2 should

For social security taxes, use the employer rate of 6.2% plus

take into account all previous corrections.

40% of the employee rate of 6.2% (4.2% for 2011 and 2012), for

a total rate of 8.68% (7.88% for 2011 and 2012) of wages.

Enter the difference between column 1 and 2 in column 3.

For Medicare taxes, use the employer rate of 1.45% plus 40%

Copy the amount in column 3 to column 4. However, to properly

of the employee rate of 1.45%, for a total rate of 2.03% of

show the amount as a credit or balance due item, enter a

wages.

positive number in column 3 as a negative number in column 4

-10-

Instructions for Form 944-X (Rev. 2-2015)

Instructions For Form 944-X (Rev. February 2015) Page 10

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