§3102 — Deduction of tax from wages
52 citing cases
Statute Text — 26 U.S.C. §3102
The tax imposed by section 3101 shall be collected by the employer of the taxpayer, by deducting the amount of the tax from the wages as and when paid. An employer who in any calendar year pays to an employee cash remuneration to which paragraph (7)(B) of section 3121(a) is applicable may deduct an amount equivalent to such tax from any such payment of remuneration, even though at the time of payment the total amount of such remuneration paid to the employee by the employer in the calendar year is less than the applicable dollar threshold (as defined in section 3121(x)) for such year; and an employer who in any calendar year pays to an employee cash remuneration to which paragraph (7)(C) or (10) of section 3121(a) is applicable may deduct an amount equivalent to such tax from any such payment of remuneration, even though at the time of payment the total amount of such remuneration paid to the employee by the employer in the calendar year is less than $100; and an employer who in any calendar year pays to an employee cash remuneration to which paragraph (8)(B) of section 3121(a) is applicable may deduct an amount equivalent to such tax from any such payment of remuneration, even though at the time of payment the total amount of such remuneration paid to the employee by the employer in the calendar year is less than $150; and an employer who is furnished by an employee a written statement of tips (received in a calendar month) pursuant to section 6053(a) to which paragraph (12)(B) of section 3121(a) is applicable may deduct an amount equivalent to such tax with respect to such tips from any wages of the employee (exclusive of tips) under his control, even though at the time such statement is furnished the total amount of the tips included in statements furnished to the employer as having been received by the employee in such calendar month in the course of his employment by such employer is less than $20.
Every employer required so to deduct the tax shall be liable for the payment of such tax, and shall be indemnified against the claims and demands of any person for the amount of any such payment made by such employer.
In the case of tips which constitute wages, subsection (a) shall be applicable only to such tips as are included in a written statement furnished to the employer pursuant to section 6053(a), and only to the extent that collection can be made by the employer, at or after the time such statement is so furnished and before the close of the 10th day following the calendar month (or, if paragraph (3) applies, the 30th day following the year) in which the tips were deemed paid, by deducting the amount of the tax from such wages of the employee (excluding tips, but including funds turned over by the employee to the employer pursuant to paragraph (2)) as are under control of the employer.
If the tax imposed by section 3101, with respect to tips which are included in written statements furnished in any month to the employer pursuant to section 6053(a), exceeds the wages of the employee (excluding tips) from which the employer is required to collect the tax under paragraph (1), the employee may furnish to the employer on or before the 10th day of the following month (or, if paragraph (3) applies, on or before the 30th day of the following year) an amount of money equal to the amount of the excess.
The Secretary may, under regulations prescribed by him, authorize employers—
to estimate the amount of tips that will be reported by the employee pursuant to section 6053(a) in any calendar year,
to determine the amount to be deducted upon each payment of wages (exclusive of tips) during such year as if the tips so estimated constituted the actual tips so reported, and
to deduct upon any payment of wages (other than tips, but including funds turned over by the employee to the employer pursuant to paragraph (2)) to such employee during such year (and within 30 days thereafter) such amount as may be necessary to adjust the amount actually deducted upon such wages of the employee during the year to the amount required to be deducted in respect of tips included in written statements furnished to the employer during the year.
If the tax imposed by section 3101 with respect to tips which constitute wages exceeds the portion of such tax which can be collected by the employer from the wages of the employee pursuant to paragraph (1) or paragraph (3), such excess shall be paid by the employee.
In the case of any payment for group-term life insurance to which this subsection applies—
subsection (a) shall not apply,
the employer shall separately include on the statement required under section 6051—
the portion of the wages which consists of payments for group-term life insurance to which this subsection applies, and
the amount of the tax imposed by section 3101 on such payments, and
the tax imposed by section 3101 on such payments shall be paid by the employee.
This subsection shall apply to any payment for group-term life insurance to the extent—
such payment constitutes wages, and
such payment is for coverage for periods during which an employment relationship no longer exists between the employee and the employer.
In the case of any payments of wages for service performed in the employ of an international organization pursuant to a transfer to which the provisions of section 3121(y) are applicable—
subsection (a) shall not apply,
the head of the Federal agency from which the transfer was made shall separately include on the statement required under section 6051—
the amount determined to be the amount of the wages for such service, and
the amount of the tax imposed by section 3101 on such payments, and
the tax imposed by section 3101 on such payments shall be paid by the employee.
In the case of any tax imposed by section 3101(b)(2), subsection (a) shall only apply to the extent to which the taxpayer receives wages from the employer in excess of $200,000, and the employer may disregard the amount of wages received by such taxpayer’s spouse.
To the extent that the amount of any tax imposed by section 3101(b)(2) is not collected by the employer, such tax shall be paid by the employee.
If an employer, in violation of this chapter, fails to deduct and withhold the tax imposed by section 3101(b)(2) and thereafter the tax is paid by the employee, the tax so required to be deducted and withheld shall not be collected from the employer, but this paragraph shall in no case relieve the employer from liability for any penalties or additions to tax otherwise applicable in respect of such failure to deduct and withhold.
Treasury Regulations
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Treas. Reg. §31.3102-1Collection of, and liability for, employee tax; in general
(a) The employer shall collect from each of his employees the employee tax with respect to wages for employment performed for the employer by the employee. The employer shall make the collection by deducting or causing to be deducted the amount of the employee tax from such wages as and when paid. (For provisions relating to the time of such payment, see § 31.3121(a)-2.) The employer is required to collect the tax, notwithstanding the wages are paid in something other than money, and to pay over the tax in moey. (As to the exclusion from wages of remuneration paid in any medium other than cash for certain types of services, see § 31.3121(a)(7)-1, relating to such remuneration paid for service not in the course of the employer's trade or business or for domestic service in a private home of the employer; and § 31.3121(a)(8)-1, relating to such remuneration paid for agricultural labor.) For provisions relating to the collection of, and liability for, employee tax in respect of tips, see § 31.3102-3. For special rules relating to Additional Medicare Tax imposed under section 3101(b)(2), see § 31.3102-4.
(b) The employer is permitted, but not required, to deduct amounts equivalent to employee tax from payments to an employee of cash remuneration to which the sections referred to in this paragraph (b) are applicable prior to the time that the sum of such payments equals—
(1) $100 in the calendar year, for service not in the course of the employer's trade or business, to which § 31.3121(a)(7)-1 is applicable;
(2) The applicable dollar threshold (as defined in section 3121(x)) in the calendar year, for domestic service in a private home of the employer, to which § 31.3121(a)(7)-1 is applicable;
(3) $150 in the calendar year, for agricultural labor, to which § 31.3121(a)(8)-1(c)(1)(i) is applicable; or
(4) $100 in the calendar year, for service performed as a home worker, to which § 31.3121(a)(10)-1 is applicable.
(c) At such time as the sum of the cash payments in the calendar year for a type of service referred to in paragraph (b)(1), (b)(2), (b)(3) or (b)(4) of this section equals or exceeds the amount specified, the employer is required to collect from the employee any amount of employee tax not previously deducted. If an employer pays cash remuneration to an employee for two or more of the types of service referred to in paragraph (b)(1), (b)(2), (b)(3) or (b)(4) of this section, the provisions of paragraph (b) of this section and this paragraph (c) are to be applied separately to the amount of remuneration attributable to each type of service. For provisions relating to the repayment to an employee, or other disposition, of amounts deducted from an employee's remuneration in excess of the correct amount of employee tax, see § 31.6413(a)-1.
(d) In collecting employee tax, the employer shall disregard any fractional part of a cent of such tax unless it amounts to one-half cent or more, in which case it shall be increased to 1 cent. The employer is liable for the employee tax with respect to all wages paid by him to each of his employees whether or not it is collected from the employee. If, for example, the employer deducts less than the correct amount of tax, or if he fails to deduct any part of the tax, he is nevertheless liable for the correct amount of the tax. Until collected from him the employee also is liable for the employee tax with respect to all the wages received by him. Any employee tax collected by or on behalf of an employer is a special fund in trust for the United States. See section 7501. The employer is indemnified against the claims and demands of any person for the amount of any payment of such tax made by the employer to the district director.
(e)(1) The provisions of paragraphs (a) and (d) of this section apply to any payment made on or after January 1, 1955.
(2) The provisions of paragraphs (b) and (c) of this section that apply to any payment made for service not in the course of the employer's trade or business or for service performed as a home worker within the meaning of section 3121(d)(3)(C) apply to any such payment made on or after January 1, 1978. The provisions of paragraphs (b) and (c) of this section that apply to any payment made for domestic service in a private home of the employer apply to any such payment made on or after January 1, 1994. The provisions of paragraphs (b) and (c) of this section that apply to any payment made for agricultural labor apply to any such payment made on or after January 1, 1988. For rules applicable to any payment for these services made prior to the dates set forth in this paragraph (e)(2), see § 31.3102-1 in effect at such time (see 26 CFR part 31 contained in the edition of 26 CFR Parts 30 to 39, revised as of April 1, 2006).
(f) Effective/applicability date. Paragraph (a) of this section applies to quarters beginning on or after November 29, 2013.
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Treas. Reg. §31.3102-1(a)The employer shall collect from each of his employees the employee tax with respect to wages for employment performed for the employer by the employee.
The employer shall collect from each of his employees the employee tax with respect to wages for employment performed for the employer by the employee. The employer shall make the collection by deducting or causing to be deducted the amount of the employee tax from such wages as and when paid. (For provisions relating to the time of such payment, see § 31.3121(a)-2.) The employer is required to collect the tax, notwithstanding the wages are paid in something other than money, and to pay over the tax in moey. (As to the exclusion from wages of remuneration paid in any medium other than cash for certain types of services, see § 31.3121(a)(7)-1, relating to such remuneration paid for service not in the course of the employer's trade or business or for domestic service in a private home of the employer; and § 31.3121(a)(8)-1, relating to such remuneration paid for agricultural labor.) For provisions relating to the collection of, and liability for, employee tax in respect of tips, see § 31.3102-3. For special rules relating to Additional Medicare Tax imposed under section 3101(b)(2), see § 31.3102-4.
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Treas. Reg. §31.3102-1(b)§31.3102-1(b)
The employer is permitted, but not required, to deduct amounts equivalent to employee tax from payments to an employee of cash remuneration to which the sections referred to in this paragraph (b) are applicable prior to the time that the sum of such payments equals—
(1) $100 in the calendar year, for service not in the course of the employer's trade or business, to which § 31.3121(a)(7)-1 is applicable;
(2) The applicable dollar threshold (as defined in section 3121(x)) in the calendar year, for domestic service in a private home of the employer, to which § 31.3121(a)(7)-1 is applicable;
(3) $150 in the calendar year, for agricultural labor, to which § 31.3121(a)(8)-1(c)(1)(i) is applicable; or
(4) $100 in the calendar year, for service performed as a home worker, to which § 31.3121(a)(10)-1 is applicable.
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Treas. Reg. §31.3102-1(c)At such time as the sum of the cash payments in the calendar year for a type of service referred to in paragraph (b)(1), (b)(2), (b)(3) or (b)(4) of this section equals or exceeds the amount specified, the employer is required to collect from the employee any amount of employee tax not previously deducted.
At such time as the sum of the cash payments in the calendar year for a type of service referred to in paragraph (b)(1), (b)(2), (b)(3) or (b)(4) of this section equals or exceeds the amount specified, the employer is required to collect from the employee any amount of employee tax not previously deducted. If an employer pays cash remuneration to an employee for two or more of the types of service referred to in paragraph (b)(1), (b)(2), (b)(3) or (b)(4) of this section, the provisions of paragraph (b) of this section and this paragraph (c) are to be applied separately to the amount of remuneration attributable to each type of service. For provisions relating to the repayment to an employee, or other disposition, of amounts deducted from an employee's remuneration in excess of the correct amount of employee tax, see § 31.6413(a)-1.
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Treas. Reg. §31.3102-1(d)In collecting employee tax, the employer shall disregard any fractional part of a cent of such tax unless it amounts to one-half cent or more, in which case it shall be increased to 1 cent.
In collecting employee tax, the employer shall disregard any fractional part of a cent of such tax unless it amounts to one-half cent or more, in which case it shall be increased to 1 cent. The employer is liable for the employee tax with respect to all wages paid by him to each of his employees whether or not it is collected from the employee. If, for example, the employer deducts less than the correct amount of tax, or if he fails to deduct any part of the tax, he is nevertheless liable for the correct amount of the tax. Until collected from him the employee also is liable for the employee tax with respect to all the wages received by him. Any employee tax collected by or on behalf of an employer is a special fund in trust for the United States. See section 7501. The employer is indemnified against the claims and demands of any person for the amount of any payment of such tax made by the employer to the district director.
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Treas. Reg. §31.3102-1(e)§31.3102-1(e)
(1) The provisions of paragraphs (a) and (d) of this section apply to any payment made on or after January 1, 1955.
(2) The provisions of paragraphs (b) and (c) of this section that apply to any payment made for service not in the course of the employer's trade or business or for service performed as a home worker within the meaning of section 3121(d)(3)(C) apply to any such payment made on or after January 1, 1978. The provisions of paragraphs (b) and (c) of this section that apply to any payment made for domestic service in a private home of the employer apply to any such payment made on or after January 1, 1994. The provisions of paragraphs (b) and (c) of this section that apply to any payment made for agricultural labor apply to any such payment made on or after January 1, 1988. For rules applicable to any payment for these services made prior to the dates set forth in this paragraph (e)(2), see § 31.3102-1 in effect at such time (see 26 CFR part 31 contained in the edition of 26 CFR Parts 30 to 39, revised as of April 1, 2006).
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Treas. Reg. §31.3102-1(f)Effective/applicability date.
Effective/applicability date. Paragraph (a) of this section applies to quarters beginning on or after November 29, 2013.
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Treas. Reg. §31.3102-2Manner and time of payment of employee tax
The employee tax is payable to the district director in the manner and at the time prescribed in Subpart G of the regulations in this part. For provisions relating to the payment by an employee of employee tax in respect of tips, see paragraph (d) of § 31.3102-3.
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Treas. Reg. §31.3102-3Collection of, and liability for, employee tax on tips
(a) Collection of tax from employee—(1) In general. Subject to the limitations set forth in subparagraph (2) of this paragraph, the employer shall collect from each of his employees the employee tax on those tips received by the employee which constitute wages for purposes of the tax imposed by section 3101. (For provisions relating to the treatment of tips as wages, see 3121(a)(12) and 3121(q).) The employer shall make the collection by deducting or causing to be deducted the amount of the employee tax from wages (exclusive of tips) which are under the control of the employer or other funds turned over by the employee to the employer (see subparagraph (3) of this paragraph). For purposes of this section the term “wages (exclusive of tips) which are under the control of the employer” means, with respect to a payment of wages, an amount equal to wages as defined in section 3121(a) except that tips and noncash remuneration which are wages are not included, less the sum of—
(i) The tax under section 3101 required to be collected by the employer in respect of wages as defined in section 3121(a) (exclusive of tips);
(ii) The tax under section 3402 required to be collected by the employer in respect of wages as defined in section 3401(a) (exclusive of tips); and
(iii) The amount of taxes imposed on the remuneration of an employee withheld by the employer pursuant to State and local law (including amounts withheld under an agreement between the employer and the employee pursuant to such law) except that the amount of taxes taken into account in this subdivision shall not include any amount attributable to tips.
(2) Limitations. An employer is required to collect employee tax on tips which constitute wages only in respect of those tips which are reported by the employee to the employer in a written statement furnished to the employer pursuant to section 6053(a). The employer is responsible for the collection of employee tax on tips reported to him only to the extent that the employer can—
(i) During the period beginning at the time the written statement is submitted to him and ending at the close of the 10th day of the month following the month in which the statement was submitted, or
(ii) In the case of an employer who elects to deduct the tax on an estimated basis (see paragraph (c) of this section), during the period beginning at the time the written statement is submitted to him and ending at the close of the 30th day following the quarter in which the statement was submitted,
collect the employee tax by deducting it or causing it to be deducted as provided in subparagraph (1).
(3) Furnishing of funds to employer. If the amount of employee tax in respect of tips reported by the employee to the employer in a written statement (or statements) furnished pursuant to section 6053(a) exceeds the wages (exclusive of tips) which are under the control of the employer, the employee may furnish to the employer, within the period specified in subparagraph (2) (i) or (ii) of this paragraph (whichever is applicable), an amount of money equal to the amount of such excess.
(b) Less than $20 of tips. Notwithstanding the provisions of paragraph (a) of this section, if an employee furnishes to his employer a written statement—
(1) Covering a period of less than 1 month, and
(2) The statement is furnished to the employer prior to the close of the 10th day of the month following the month in which the tips were actually received by the employee, and
(3) The aggregate amount of tips reported in the statement and in all other statements previously furnished by the employee covering periods within the same month is less than $20, and the statements, collectively, do not cover the entire month,
the employer may deduct amounts equivalent to employee tax on such tips from wages (exclusive of tips) which are under the control of the employer or other funds turned over by the employee to the employer. For provisions relating to the repayment to an employee, or other disposition, of amounts deducted from an employee's remuneration in excess of the correct amount of employee tax, see § 31.6413(a)-1. (As to the exclusion from wages of tips of less than $20, see § 31.3121(a)(12)-1.)
(c) Collection of employee tax on estimated basis—(1) In general. Subject to certain limitations and conditions, an employer may, at his discretion, make collection of the employee tax in respect of tips reported by an employee to the employer on an estimated basis. An employer who elects to make collection of the employee tax on an estimated basis shall:
(i) In respect of each employee, make an estimate of the amount of tips that will be reported, pursuant to section 6053(a), by the employee to the employer in a calendar quarter.
(ii) Determine the amount which must be deducted upon each payment of wages (exclusive of tips) which are under the control of the employer to be made during the quarter by the employer to the employee in order to collect from the employee during the quarter an amount equal to the amount obtained by multiplying the estimated quarterly tips by the sum of the rates of tax under subsections (a) and (b) of section 3101.
(iii) Deduct from any payment of such employee's wages (exclusive of tips) which are under the control of the employer, or from funds referred to in paragraph (a)(3) of this section, such amount as may be necessary to adjust the amount of tax withheld on the estimated basis to conform to the amount of employee tax imposed upon, and required to be deducted in respect of, tips reported by the employee to the employer during the calendar quarter in written statements furnished to the employer pursuant to section 6053(a). If an adjustment is required, the additional employee tax required to be collected may be deducted upon any payment of the employee's wages (exclusive of tips) which are under the control of the employer during the quarter and within the first 30 days following the quarter or from funds turned over by the employee to the employer for such purposes within such period. For provisions relating to the repayment to an employee, or other disposition, of amounts deducted from an employee's remuneration in excess of the correct amount of employee tax, see § 31.6413(a)-1.
(2) Estimating tips employee will report—(i) Initial estimate. The initial estimate of the amount of tips that will be reported by a particular employee in a calendar quarter shall be made on the basis of the facts and circumstances surrounding the employment of that employee. However, if a number of employees are employed under substantially the same circumstances and working conditions, the initial estimate established for one such employee may be used as the initial estimate for other employees in that group.
(ii) Adjusting estimate. If the quarterly estimate of tips in respect of a particular employee continues to differ substantially from the amount of tips reported by the employee and there are no unusual factors involved (for example, an extended absence from work due to illness) the employer shall make an appropriate adjustment of his estimate of the amount of tips that will be reported by the employee.
(iii) Reasonableness of estimate. The employer must be prepared, upon request of the district director, to disclose the factors upon which he relied in making the estimate, and his reasons for believing that the estimate is reasonable.
(d) Employee tax not collected by employer. If—
(1) The amount of the employee tax imposed by section 3101 in respect of those tips received by an employee which constitute wages exceeds
(2) The amount of employee tax imposed by section 3101 (in respect of tips reported by the employee to the employer) which can be collected by the employer from such employee's wages (exclusive of tips) which are under the control of the employer or from funds referred to in paragraph (a)(3) of this section,
the employee shall be liable for the payment of tax in an amount equal to such excess. For provisions relating to the manner and time of payment of employee tax by an employee, see paragraph (d) of § 31.6011(a)-1 and paragraph (a)(4) of § 31.6071(a)-1. For provisions relating to statements required to be furnished by employers to employees in respect of uncollected employee tax on tips reported to the employer, see § 31.6053-2.
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Treas. Reg. §31.3102-3(a)Collection of tax from employee—(1) In general.
Collection of tax from employee—(1) In general. Subject to the limitations set forth in subparagraph (2) of this paragraph, the employer shall collect from each of his employees the employee tax on those tips received by the employee which constitute wages for purposes of the tax imposed by section 3101. (For provisions relating to the treatment of tips as wages, see 3121(a)(12) and 3121(q).) The employer shall make the collection by deducting or causing to be deducted the amount of the employee tax from wages (exclusive of tips) which are under the control of the employer or other funds turned over by the employee to the employer (see subparagraph (3) of this paragraph). For purposes of this section the term “wages (exclusive of tips) which are under the control of the employer” means, with respect to a payment of wages, an amount equal to wages as defined in section 3121(a) except that tips and noncash remuneration which are wages are not included, less the sum of—
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Treas. Reg. §31.3102-3(b)Less than $20 of tips.
Less than $20 of tips. Notwithstanding the provisions of paragraph (a) of this section, if an employee furnishes to his employer a written statement—
(1) Covering a period of less than 1 month, and
(2) The statement is furnished to the employer prior to the close of the 10th day of the month following the month in which the tips were actually received by the employee, and
(3) The aggregate amount of tips reported in the statement and in all other statements previously furnished by the employee covering periods within the same month is less than $20, and the statements, collectively, do not cover the entire month,
the employer may deduct amounts equivalent to employee tax on such tips from wages (exclusive of tips) which are under the control of the employer or other funds turned over by the employee to the employer. For provisions relating to the repayment to an employee, or other disposition, of amounts deducted from an employee's remuneration in excess of the correct amount of employee tax, see § 31.6413(a)-1. (As to the exclusion from wages of tips of less than $20, see § 31.3121(a)(12)-1.)
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Treas. Reg. §31.3102-3(c)Collection of employee tax on estimated basis—(1) In general.
Collection of employee tax on estimated basis—(1) In general. Subject to certain limitations and conditions, an employer may, at his discretion, make collection of the employee tax in respect of tips reported by an employee to the employer on an estimated basis. An employer who elects to make collection of the employee tax on an estimated basis shall:
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Treas. Reg. §31.3102-3(d)Employee tax not collected by employer.
Employee tax not collected by employer. If—
(1) The amount of the employee tax imposed by section 3101 in respect of those tips received by an employee which constitute wages exceeds
(2) The amount of employee tax imposed by section 3101 (in respect of tips reported by the employee to the employer) which can be collected by the employer from such employee's wages (exclusive of tips) which are under the control of the employer or from funds referred to in paragraph (a)(3) of this section,
the employee shall be liable for the payment of tax in an amount equal to such excess. For provisions relating to the manner and time of payment of employee tax by an employee, see paragraph (d) of § 31.6011(a)-1 and paragraph (a)(4) of § 31.6071(a)-1. For provisions relating to statements required to be furnished by employers to employees in respect of uncollected employee tax on tips reported to the employer, see § 31.6053-2.
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Treas. Reg. §31.3102-3(i)In respect of each employee, make an estimate of the amount of tips that will be reported, pursuant to section 6053(a), by the employee to the employer in a calendar quarter.
In respect of each employee, make an estimate of the amount of tips that will be reported, pursuant to section 6053(a), by the employee to the employer in a calendar quarter.
(ii) Determine the amount which must be deducted upon each payment of wages (exclusive of tips) which are under the control of the employer to be made during the quarter by the employer to the employee in order to collect from the employee during the quarter an amount equal to the amount obtained by multiplying the estimated quarterly tips by the sum of the rates of tax under subsections (a) and (b) of section 3101.
(iii) Deduct from any payment of such employee's wages (exclusive of tips) which are under the control of the employer, or from funds referred to in paragraph (a)(3) of this section, such amount as may be necessary to adjust the amount of tax withheld on the estimated basis to conform to the amount of employee tax imposed upon, and required to be deducted in respect of, tips reported by the employee to the employer during the calendar quarter in written statements furnished to the employer pursuant to section 6053(a). If an adjustment is required, the additional employee tax required to be collected may be deducted upon any payment of the employee's wages (exclusive of tips) which are under the control of the employer during the quarter and within the first 30 days following the quarter or from funds turned over by the employee to the employer for such purposes within such period. For provisions relating to the repayment to an employee, or other disposition, of amounts deducted from an employee's remuneration in excess of the correct amount of employee tax, see § 31.6413(a)-1.
(2) Estimating tips employee will report—(i) Initial estimate. The initial estimate of the amount of tips that will be reported by a particular employee in a calendar quarter shall be made on the basis of the facts and circumstances surrounding the employment of that employee. However, if a number of employees are employed under substantially the same circumstances and working conditions, the initial estimate established for one such employee may be used as the initial estimate for other employees in that group.
(ii) Adjusting estimate. If the quarterly estimate of tips in respect of a particular employee continues to differ substantially from the amount of tips reported by the employee and there are no unusual factors involved (for example, an extended absence from work due to illness) the employer shall make an appropriate adjustment of his estimate of the amount of tips that will be reported by the employee.
(iii) Reasonableness of estimate. The employer must be prepared, upon request of the district director, to disclose the factors upon which he relied in making the estimate, and his reasons for believing that the estimate is reasonable.
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Treas. Reg. §31.3102-4Special rules regarding Additional Medicare Tax
(a) Collection of tax from employee. An employer is required to collect from each of its employees the tax imposed by section 3101(b)(2) (Additional Medicare Tax) with respect to wages for employment performed for the employer by the employee only to the extent the employer pays wages to the employee in excess of $200,000 in a calendar year. This rule applies regardless of the employee's filing status or other income. Thus, the employer disregards any amount of wages or Railroad Retirement Tax Act (RRTA) compensation paid to the employee's spouse. The employer also disregards any RRTA compensation paid by the employer to the employee or any wages or RRTA compensation paid to the employee by another employer.
(b) Collection of amounts not withheld. To the extent the employer does not collect Additional Medicare Tax imposed on the employee by section 3101(b)(2), the employee is liable to pay the tax.
(c) Employer's liability for tax. If the employer deducts less than the correct amount of Additional Medicare Tax, or if it fails to deduct any part of Additional Medicare Tax, it is nevertheless liable for the correct amount of tax that it was required to withhold, unless and until the employee pays the tax. If an employee subsequently pays the tax that the employer failed to deduct, the tax will not be collected from the employer. The employer will not be relieved of its liability for payment of the tax required to be withheld unless it can show that the tax under section 3101(b)(2) has been paid. The employer, however, will remain subject to any applicable penalties or additions to tax resulting from the failure to withhold as required.
(d) Effective/applicability date. This section applies to quarters beginning on or after November 29, 2013.
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Treas. Reg. §31.3102-4(a)Collection of tax from employee.
Collection of tax from employee. An employer is required to collect from each of its employees the tax imposed by section 3101(b)(2) (Additional Medicare Tax) with respect to wages for employment performed for the employer by the employee only to the extent the employer pays wages to the employee in excess of $200,000 in a calendar year. This rule applies regardless of the employee's filing status or other income. Thus, the employer disregards any amount of wages or Railroad Retirement Tax Act (RRTA) compensation paid to the employee's spouse. The employer also disregards any RRTA compensation paid by the employer to the employee or any wages or RRTA compensation paid to the employee by another employer.
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Treas. Reg. §31.3102-4(b)Collection of amounts not withheld.
Collection of amounts not withheld. To the extent the employer does not collect Additional Medicare Tax imposed on the employee by section 3101(b)(2), the employee is liable to pay the tax.
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Treas. Reg. §31.3102-4(c)Employer's liability for tax.
Employer's liability for tax. If the employer deducts less than the correct amount of Additional Medicare Tax, or if it fails to deduct any part of Additional Medicare Tax, it is nevertheless liable for the correct amount of tax that it was required to withhold, unless and until the employee pays the tax. If an employee subsequently pays the tax that the employer failed to deduct, the tax will not be collected from the employer. The employer will not be relieved of its liability for payment of the tax required to be withheld unless it can show that the tax under section 3101(b)(2) has been paid. The employer, however, will remain subject to any applicable penalties or additions to tax resulting from the failure to withhold as required.
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Treas. Reg. §31.3102-4(d)Effective/applicability date.
Effective/applicability date. This section applies to quarters beginning on or after November 29, 2013.
52 Citing Cases
mployer (here, Iron Cross) is required to withhold from an employee's wages and then pay over to the IRS both income tax, see sec. 3402, and the employee's share ofSocial Security and Medicare tax (i.e., Federal Insurance Contributions Act tax), see sec. 3102. Under section 7501(a), "the amount oftax so collected or withheld shall be held to be a special fund in trust for the United -15- States"; consequently, these withheld taxes are referred to as "trust fund taxes". One ofthe means Congress h
Section 3101 imposes on employees under FICA a tax based on their ¹°We find that even ifTexas does accept the fraud exception, there is no evidence to support its application here. - 30 - wages paid, which the employer is required to collect under section 3102. Under sections 3402 and 3403, employers are liable for withholding from their employees' wages the employees' shares ofFederal income tax. In addition to the successor in interest liabilities, respondent determined that TFT Galveston Por
Section 3101 imposes on employees under FICA a tax based on their ¹°We find that even ifTexas does accept the fraud exception, there is no evidence to support its application here. - 30 - wages paid, which the employer is required to collect under section 3102. Under sections 3402 and 3403, employers are liable for withholding from their employees' wages the employees' shares ofFederal income tax. In addition to the successor in interest liabilities, respondent determined that TFT Galveston Por
Section 3101 imposes on employees under FICA a tax based on their ¹°We find that even ifTexas does accept the fraud exception, there is no evidence to support its application here. - 30 - wages paid, which the employer is required to collect under section 3102. Under sections 3402 and 3403, employers are liable for withholding from their employees' wages the employees' shares ofFederal income tax. In addition to the successor in interest liabilities, respondent determined that TFT Galveston Por
Section 3101 imposes on employees under FICA a tax based on their ¹°We find that even ifTexas does accept the fraud exception, there is no evidence to support its application here. - 30 - wages paid, which the employer is required to collect under section 3102. Under sections 3402 and 3403, employers are liable for withholding from their employees' wages the employees' shares ofFederal income tax. In addition to the successor in interest liabilities, respondent determined that TFT Galveston Por
Section 3101 imposes on employees under FICA a tax based on their ¹°We find that even ifTexas does accept the fraud exception, there is no evidence to support its application here. - 30 - wages paid, which the employer is required to collect under section 3102. Under sections 3402 and 3403, employers are liable for withholding from their employees' wages the employees' shares ofFederal income tax. In addition to the successor in interest liabilities, respondent determined that TFT Galveston Por
yer (here, Commonwealth) is required to withhold from an employee's kvages and then pay over to the IRS both income tax, see sec. 3402, and the employee's share ofSocial Security and Medicare tax (i.e., Federal Insurance Contributions Act tax), see sec. 3102. Under section 7501(a), "the amount oftax so collected or withheld shall be held to be a special fund in trust for the United States"; consequently, these withheld taxes are referred to as "trust fund taxes". One ofthe means Congress has ena
For FICA purposes, whether a worker qualifies as an employee is generally determined under the common law rules. See sec. 3121(d)(2). "The courts have considered several factors in determining the existence ofthe employer-employee relationship. Among those factors are: (1) the right to control the details ofthe work; (2) furnishing oftoo
Section 3101 imposes on employees under FICA a tax based on their ¹°We find that even ifTexas does accept the fraud exception, there is no evidence to support its application here. - 30 - wages paid, which the employer is required to collect under section 3102. Under sections 3402 and 3403, employers are liable for withholding from their employees' wages the employees' shares ofFederal income tax. In addition to the successor in interest liabilities, respondent determined that TFT Galveston Por
Section 3101 imposes on employees under FICA a tax based on their ¹°We find that even ifTexas does accept the fraud exception, there is no evidence to support its application here. - 30 - wages paid, which the employer is required to collect under section 3102. Under sections 3402 and 3403, employers are liable for withholding from their employees' wages the employees' shares ofFederal income tax. In addition to the successor in interest liabilities, respondent determined that TFT Galveston Por
impose taxes on employers under the Federal Insurance Contributions Act (FICA) and the Federal Unemployment Tax Act (FUTA). Section 3101 imposes on employees under FICA a tax based on their wages paid, which the employer is required to collect under section 3102. Under sections 3402 and 3403, employers are liable for withholding from their employees’ wages the employees’ shares of Federal income tax. In addition to the successor in interest liabilities, respondent determined that TFT Galveston P
yee ofFountain for all quarters from Marcli 31, 1999, through December 31, 2003. Section 3101 imposes a tax on employees under the Federal Insurance Contributions Act (FICA) based on their wages paid, which the employer is required to collect under section 3102. The term "wages" as used in these statutes generally encompasses "all remuneration for employment". Secs. 3121(a), 3306(b). Fountain paid NESL and PLS as remuneration for Dr. Alexander's services. We häve found that Dr. Alexander was in
An employer is required by sections 3102 and 3402 to withhold from an - 9 - [*9] employee's wages and then pay the Internal Revenue Service both income tax, under section 3402, and the employee's share ofSocial Security and Medicare tax (FICA tax). Section 31.3102-1(d), Employment Tax Regs., provides that the employer is liable for the
Section 3101(a) imposes a share ofthe FICA tax on the employee; section 3102 provides that this tax "shall be collected by the employer," who thus bears derivative liability for the emplòyee's share ofthe FICA tax.
yee ofFountain for all quarters from Marcli 31, 1999, through December 31, 2003. Section 3101 imposes a tax on employees under the Federal Insurance Contributions Act (FICA) based on their wages paid, which the employer is required to collect under section 3102. The term "wages" as used in these statutes generally encompasses "all remuneration for employment". Secs. 3121(a), 3306(b). Fountain paid NESL and PLS as remuneration for Dr. Alexander's services. We häve found that Dr. Alexander was in
31.6302-1(e)(1) (2005) to include (1) "The employer tax under section 3111", that is, the employer share ofFICA, (2)"The employee portion ofthe tax withheld under section 3102", that is, employee FICA withholding, and (3)."The income tax withheld under sections 3402 and 3405, that is, income-tax withholding.
sections 3102 and 3402 to withhold from an employee's wages and then pay over to the IRS both income tax, under section 3402, and the employee's share ofSocial Security and Medicare tax (i.e., Federal Insurance Contributions Act (FICA) tax), under section 3102. Under section 7501(a), "the amount oftax so collected or withheld shall be held to be a special fund in trust for the United States"; consequently, these withheld taxes are referred to as "trust fund taxes". One ofthe means Congress has
. The Federal Insurance Contributions Act (i) taxes employers a percentage of wages paid, sec. 3111; (ii) taxes employees a percentage of wages received, sec. 3101; and (iii) requires employers to withhold the tax on employees from employee wages, sec. 3102 (a) . The Federal Unemployment Tax Act taxes employers a percentage of the wages paid. Sec. 3301. Year Quarter 1 Ouarter 2 Ouarter 3 Quarter 4 Total 2005 $3,822.27 $5,617.86 $3,149.51 $4,058.84 $16,648.48 2006 4,193.32 5,588.17 5,776.87 4,16
3102 (a) requires employers to withhold amounts from wages "to pay the se . 3101 tax. Sec. 3402(a) (1) requires every employer to withhold amounts from wages to *pay the federal income tak of the employ e. Sec. 6051(a) requires .every person who is required to - withho d a tax under sec . 3101 or 3402 and every employer engaged in a "t rade or
It also withheld those to porary laborers' shares of FICA taxes under section 3102 and pai its own corresponding share of FICA taxes under section 3111 .
It also withheld those temporary laborers’ shares of FICA taxes under section 3102 and paid its own corresponding share of FICA taxes under section 3111.
Section 3101 imposes a FICA tax on employees, which section 3102 requires the employer to collect.
Section 3101 imposes a FICA tax at the employee level as well, which section 3102 requires the employer to collect from the employee's wages .
impose taxes on employers under the Federal Insurance Contributions Act (FICA) and the Federal Unemployment Tax Act (FUTA). Section 3101 imposes a tax on employees under FICA based on their wages paid, which the employer is required to collect under section 3102. Under sections 3402 and 3403, employers are liable for withholding from their employees' wages the employees' shares of Federal income tax. Respondent determined that petitioner's workers were employees for purposes of employment taxes
le C. Sections 3111 and 3301 impose taxes on employers under FICA and FUTA, respectively, based on wages paid to employees. Section 3101 imposes a tax on employees under FICA based on their wages paid, which the employer is required to collect under section 3102. The term. "wages", as used in these statutes, generally encompasses "all remuneration for employment". Secs. 3121(a), 3306(b). The term "employee", for FICA taxes purposes, is defined in section 3121(d), and, with modifications not pert
3102. Section 3121(a) defines wages and establishes the annual ceiling which limits the amount of wages subject to the Social Security portion of the FICA taxes. The taxable wage base applies separately to each employer. Veterinary Surgical Consultants, P.C. v. Commissioner, 117 T.C. 141, 151 (2001), affd. sub nom. Yeagle Drywall Co. v. Commissioner, 54 Fed. Appx. 100 (3d Cir. 2002). Thus, if an employee receives wages from more than one employer, the annual wage limitation does not apply to the
Allstate withheld FICA taxes from petitioners and paid both halves over to the Treasury Department for the years in issue. Independent contractors are not subject to the FICA tax; however, they are subject to a Self-Employment Contributions Act of 1954, secs. 1401-1403, 68A Stat. 353, tax (SECA tax). See secs. 1401, 1402. The SECA tax is