Instructions For Form 941-Ss - Employer'S Quarterly Federal Tax Returnamerican Samoa, Guam, The Commonwealth Of The Northern Mariana Islands, And The U.s. Virgin Islands - 2010 Page 6
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9section 6 in Pub. 15-A for more information about sick pay
6. Employer’s social security tax exemption.
reporting.
Complete lines 6a – 6d to figure the payroll tax exemption
Enter the amount before deductions. Do not include tips
for the employer’s share (6.2%) of social security tax on
on this line. For information on types of wages subject to
wages/tips paid to one or more qualified employees.
social security taxes, see section 4 of Pub. 80 (Circular SS).
An employer must be a qualified employer to be eligible
The rate of social security tax on taxable wages is 6.2
for the employer’s social security tax exemption. A qualified
percent (.062) each for the employer and employee or 12.4
employer is any employer other than Federal, State, and
percent (.124) for both. Stop paying social security tax on
any related government entities. All public institutions of
and reporting an employee’s wages on line 5a when the
higher education and Indian tribal governments are also
employee’s taxable wages (including tips) reach $106,800
qualified employers.
during 2010. However, continue to withhold Medicare taxes
An employer may elect not to apply the social security tax
for the whole year on wages and tips even when the social
exemption with respect to a qualified employee. The election
security wage base of $106,800 has been reached.
is made by not including that employee or that employee’s
wages on lines 6a – 6d and lines 12c – 12e. An election not to
line 5a (column 1)
apply the social security tax exemption to a qualified
x
.124
line 5a (column 2)
employee may allow a qualified employer to claim the Work
Opportunity Credit for that employee. A qualified employer
Do not reduce the amount reported on line 5a by any
cannot apply both the social security tax exemption on Form
!
amount paid to qualified new employees. The social
941-SS and claim the Work Opportunity Credit for the same
security tax exemption on wages/tips will be figured
employee. For more information, see Form 5884, Work
CAUTION
on lines 6c and 6d and will reduce the tax on line 6e.
Opportunity Credit.
5b. Taxable social security tips. Enter all tips your
For more information about the employer’s social security
employees reported to you during the quarter until the total
tax exemption, visit the IRS website at and
of the tips and wages for an employee reach $106,800 in
enter the keywords “HIRE Act” in the search box.
2010. Do this even if you were unable to withhold the
6a. Number of qualified employees first paid exempt
employee tax of 6.2%.
wages/tips this quarter. A qualified employee is an
An employee must report cash tips to you, including tips
employee who:
•
you paid the employee for charge customers, totaling $20 or
Begins employment with you after February 3, 2010, and
more in a month by the 10th of the next month. Employees
before January 1, 2011;
•
may use Form 4070, Employee’s Report of Tips to Employer
Certifies by signed affidavit (Form W-11, Hiring Incentives
(available only in Pub. 1244, Employee’s Daily Record of
to Restore Employment (HIRE) Act Employee Affidavit), or
Tips and Report to Employer), or submit a written statement
similar statement under penalties of perjury, that he or she
or electronic tip record.
has not been employed for more than 40 hours during the
60-day period (including 2009) ending on the date the
Do not include allocated tips on this line. Instead, report
employee begins employment with you;
them on Form 8027, Employer’s Annual Information Return
•
Is not employed by you to replace another employee
of Tip Income and Allocated Tips. Allocated tips are not
unless the other employee separated from employment
reportable on Form 941-SS and are not subject to social
voluntarily or for cause (including downsizing); and
security or Medicare taxes.
•
Is not related to you. An employee is related to you if he
line 5b (column 1)
or she is your child or a descendant of your child, your
x
.124
sibling or stepsibling, your parent or ancestor of your parent,
line 5b (column 2)
your stepparent, your niece or nephew, your aunt or uncle,
or your in-law. An employee is also related to you if he or
Do not reduce the amount reported on line 5b by
she is related to anyone who owns more than 50% of your
!
any amount paid to qualified new employees. The
outstanding stock or capital and profits interest or is your
social security tax exemption on wages/tips will be
dependent or a dependent of anyone who owns more than
CAUTION
figured on lines 6c and 6d and will reduce the tax on line 6e.
50% of your outstanding stock or capital and profits interest.
If you are an estate or trust, see section 51(i)(1) and section
5c. Taxable Medicare wages and tips. Report all
152(d)(2) for more details.
wages, tips, sick pay, and taxable fringe benefits that are
subject to Medicare tax. Unlike social security wages, there
Exempt wages/tips are the wages/tips paid to qualified
is no limit on the amount of wages subject to Medicare tax.
employees for which the employer is exempt from paying
the employer’s 6.2% share of social security tax. Enter on
Include all tips your employees reported during the
line 6a the number of qualified employees first paid wages/
quarter, even if you were unable to withhold the employee
tips to which you applied the social security tax exemption in
tax of 1.45%.
this quarter. Do not include on line 6a qualified employees
line 5c (column 1)
that are included on line 12c.
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.029
6b. Number of qualified employees paid exempt
line 5c (column 2)
wages/tips this quarter. Enter on line 6b the total number
of qualified employees paid exempt wages/tips to which you
For more information, see sections 4, 5, and 7 of Pub. 80
applied the social security tax exemption in this quarter.
(Circular SS).
Qualified employees included on line 6a will also be
Do not reduce the amount reported on line 5c by any
included on line 6b. Qualified employees on line 12c may
!
amount paid to qualified new employees. The tax
also be included on line 6b. See line 6a for the definition of
exemption does not apply to Medicare tax.
CAUTION
qualified employee.
5d. Total social security and Medicare taxes. Add
6c. Exempt wages/tips paid to qualified employees
the social security tax (line 5a), social security tips tax (line
this quarter. Enter the amount of exempt wages/tips paid
5b), and Medicare tax (line 5c) and enter the result
this quarter to all qualified employees reported on line 6b.
on line 5d.
See line 6a for the definition of exempt wages/tips.
-5-
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