Changes To Note

Social Security and Medicare tax for 2002.   The social security wage base for 2002 is $84,900. There is no wage base limit for Medicare tax. The tax rate remains 6.2% for social security and 1.45% for Medicare tax.

Redesignation of Estimated Income Tax Payments as Employment Tax Deposits.   If you determine that your income tax liability for your current tax year will be lower than the amount of estimated income tax payments you have already made, you may redesignate estimated income tax payments as employment tax deposits. You may use these redesignated payments to satisfy deposit liabilities for income tax withholding and social security, Medicare, railroad retirement, and Federal unemployment taxes. To make this redesignation, call 1-866-562-5227. Be certain your redesignation of these payments does not result in an underpayment of estimated income tax for the tax year. You may be subject to a penalty for underpayment of estimated income tax.

Important Reminders

Electronic deposit requirement.   You must make electronic deposits of all depository taxes (such as employment tax, excise tax, and corporate income tax) using the Electronic Federal Tax Payment System (EFTPS) in 2002 if:

• The total deposits of such taxes in 2000 were more than $200,000 or
• You were required to use EFTPS in 2001.

If you are required to use EFTPS and fail to do so, you may be subject to a 10% penalty. If you are not required to use EFTPS, you may participate voluntarily. To get more information or to enroll in EFTPS, call 1-800-555-4477 or 1-800-945-8400, or visit the EFTPS Web Site at www.eftps.gov.

See section 7 for more information.

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 (section 7).

When you hire a new employee.   Ask each new employee to complete the 2002 Form W-4, Employee's Withholding Allowance Certificate. Also, ask the employee to show you his or her social security card so 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 new 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.)

Eligibility for employment.   You must verify that each new employee is legally eligible to work in the United States. This includes completing the Immigration and Naturalization Service (INS) Form I-9, Employment Eligibility Verification. You can get the form from INS offices. Contact the INS at 1-800-870-3676, or visit the INS Web Site at www.ins.usdoj.gov for further information.

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 web site at www.acf.dhhs.gov/programs/cse/newhire for more information.

When a crew leader furnishes workers to you.   Record the crew leader's name, address, and employer identification number. (See sections 2 and 11.)

Information returns.   You must furnish Form W-2, Wage and Tax Statement, to each employee by January 31 for the previous year. 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 (e.g., 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 2002 General Instructions for Forms 1099, 1098, 5498, and W-2G. Also see the separate instructions for each information return you file (e.g., 2002 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.

Private delivery services.   You can use certain private delivery services designated by the IRS to send tax returns or payments. If you mail by the due date using any of these services, you are considered to have filed on time. The most recent list of designated private delivery services was published in October 2001. The list includes only the following:

• Airborne Express (Airborne): Overnight Air Express Service, Next Afternoon Service, Second Day Service.
• DHL Worldwide Express (DHL): DHL Same Day Service, DHL USA Overnight.
• Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2 Day.
• 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.

The 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.

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.
• Courteous service.

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

• Your name, address, and employer identification number.
• The name and telephone number of an authorized contact person and the hours 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 you are facing (if applicable).

You may contact a Taxpayer Advocate 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 Pub. 1546, The Taxpayer Advocate Service of the IRS, for a list of addresses and fax numbers.

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.

Calendar

The following are important dates and responsibilities. Also see Pub. 509, Tax Calendars for 2002.

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 on or before the due date. (See Private delivery services earlier.)

By January 31  

• File Form 943, Employer's Annual Tax Return for Agricultural Employees, with the Internal Revenue Service. (See section 8.) If you deposited all Form 943 taxes when due, you have ten additional days to file.
• Furnish each employee a completed Form W-2, Wage and Tax Statement.
• Furnish each recipient a completed Form 1099 (e.g., 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 ten additional days to file.
• File Form 945, Annual Return of Withheld Federal Income Tax, to report any nonpayroll income tax withheld during 2001.

By February 15  

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

On February 16  

Begin withholding for any employee who previously claimed exemption from 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 tax 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.)

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 Internal Revenue Service Center for your area. For electronically filed returns, see By March 31 below.

Send 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. For electronically filed returns, see By March 31 below.

By March 31  

File electronic Forms W-2 and 1099. File Copy A of electronic (not magnetic media or paper) Forms W-2 with the Social Security Administration and Forms 1099 with the Internal Revenue Service. See the SSA Web Site at www.ssa.gov/employer for more information.

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

Deposit FUTA taxes. Deposit Federal unemployment (FUTA) tax due if it is more than $100.

Before December 1  

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

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

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

Ordering publications and forms.   See Form 7018-A, Employer's Order Blank for 2002 Forms, and Quick and Easy Access to Tax Help and Forms at the end of this publication.

Telephone help.   You can call the IRS with your tax questions. Check your telephone book for the local number or call 1-800-829-1040.

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

Useful Items You may want to see:

Publication

• 15   Circular E, Employer's Tax Guide
• 15-A   Employer's Supplemental Tax Guide
• 15-B   Employer's Tax Guide to Fringe Benefits
• 225   Farmer's Tax Guide
• 535   Business Expenses
• 583   Starting a Business and Keeping Records
• 1635   Understanding Your EIN

1. Taxpayer Identification Numbers

If you are required to withhold any income, social security, or Medicare taxes, you will need an employer identification number for yourself, and you will need the social security number of each employee.

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

If you have not asked for an EIN, request one on Form SS-4, Application for Employer Identification Number. Form SS-4 contains information on how to apply for an EIN by mail or by telephone.

If you do not have an EIN by the time a return is due, write Applied For and the date you applied in the space shown for the number. If you took over another employer's business, do not use that employer's EIN. Make your check for any amount due on a return payable to the United States Treasury and show on it your name (as shown on Form SS-4), address, kind of tax, period covered, and date you applied for an EIN.

You should have only one EIN. If you have more than one, notify the Internal Revenue Service Center where you file your return. List the EINs 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 Pub. 1635, Understanding Your EIN, or Pub. 583, Starting a Business and Keeping Records.

Social security number.   An employee's social security number (SSN) consists of nine digits separated as follows: 000-00-0000. You must obtain each employee's name and SSN 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 provide the correct name and SSN, you may owe a penalty. Any employee without a social security card can get one by completing Form SS-5. You can get this form at SSA offices or by calling 1-800-772-1213. If 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. When the employee receives the SSN, file Form W-2c, Corrected Wage and Tax Statement, to show the employee's SSN.

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 new 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 was given a new social security card to show his or her correct name and number after an adjustment to his or her alien residence status, correct your records and show the new information on Form W-2. If you filed Form W-2 for the same employee in prior years under the old name and SSN, file Form W-2c to correct the name and number. Advise the employee to contact the local SSA office about 9 months after the Form W-2c is filed to ensure that his or her records have been updated.

IRS individual taxpayer identification numbers (ITINs) for aliens.   A resident or nonresident alien may request an ITIN for tax purposes if he or she does not have and is not eligible to get an SSN. Possession of an ITIN does not change an individual's employment or immigration status under U.S. law. Do not accept an ITIN in place of an SSN for employee identification. An individual with an ITIN who later becomes eligible to work in the United States must obtain an SSN.

Verification of social security numbers.   The Social Security Administration (SSA) offers employers and authorized reporting agents two 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. To verify up to 50 names and numbers, contact your local social security office.
• Large volume verification. The Enumeration Verification Service (EVS) may be used to verify more than 50 employee names and SSNs. 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 SSA's Web Site for Employers at www.ssa.gov/employer.

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