New forms in Spanish. Your Spanish-speaking employees may claim withholding allowances using Forma W-4(SP), Certificado de Exención de la Retención del(la) Empleado(a), in place of Form W-4, Employee's Withholding Allowance Certificate. Instructions, in Spanish, for completing Form W-4 or Forma W-4(SP) are available in Publication 579SP, Cómo Preparar la Declaración de Impuesto Federal. For nonemployees, new Forma W-9(SP), Solicitad y Certificación del Número de Identificación del Contribuyente, may be used in place of Form W-9, Request for Taxpayer Identification Number and Certification.

New IRS procedure for review of Forms W-4. Employers no longer have to routinely send copies of Forms W-4 claiming more than 10 allowances and certain “exempt” Forms W-4 to the IRS. However, Forms W-4 are still subject to review by the IRS. See Publication 15 (Circular E), Employer's Tax Guide, for details.

New procedure for withholding income taxes on the wages of nonresident alien employees. For wages paid on or after January 1, 2006, employers are required to apply a new procedure in calculating the amount of federal income tax withholding on the wages of nonresident alien employees. For more information, see Publication 15.

Nonqualified deferred compensation plans. The employer and payer reporting and wage withholding requirements provided for amounts deferred under nonqualified deferred compensation plans, described in Notice 2005-1, have been suspended for calendar year 2005 by Notice 2005-94. You can find Notice 2005-94 by accessing the IRS website at www.irs.gov and typing “Notice 2005-94” in the search box.

Payments in the nature of workers' compensation—public employees. Effective December 15, 2005, payments to state and local government employees, under a statute in the nature of a workers' compensation law, are not sick pay and are not subject to employment taxes. See section 6 for more information.

Additional employment tax information. Visit the IRS website at www.irs.gov and type “Employment Tax” in the search box for a list of employment tax topics.

Furnishing Form W-2 to employees electronically. You may set up a system to furnish Forms W-2 electronically to employees who choose to receive them in that format. Each employee participating must consent (or receive confirmation of any consent made using a paper document) electronically, and you must notify the employees of all hardware and software requirements to receive the forms. You may not send a Form W-2 electronically to any employee who does not consent or who has revoked consent previously provided. To furnish Forms W-2 electronically, you must meet the following disclosure requirements and provide a clear and conspicuous statement of each of them to your employees.

You must furnish electronic Forms W-2 by the due date of the paper forms. For more information, see Regulations section 31.6051-1(j).

Electronic filing and payment. Now, more than ever before, businesses can enjoy the benefits of filing and paying their federal taxes electronically. Whether you rely on a tax professional or handle your own taxes, IRS offers you convenient programs to make it easier. Spend less time and worry on taxes and more time running your business. Use e-file and Electronic Federal Tax Payment System (EFTPS) to your benefit.

Electronic submission of Forms W-4, W-4P, W-4S, W-4V, and W-5. You may set up a system to electronically receive any or all of the following forms (and their Spanish versions, if available) from an employee or payee.

If you establish an electronic system to receive any of these forms, you do not need to process that form in a paper version. For each form that you establish an electronic submission system for, you must meet each of the following five requirements.

For more information, see:

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this booklet on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

This publication supplements Publication 15 (Circular E), Employer's Tax Guide. It contains specialized and detailed employment tax information supplementing the basic information provided in Publication 15 (Circular E). This publication also contains:

Publication 15-B, Employer's Tax Guide to Fringe Benefits, contains information about the employment tax treatment of various types of noncash compensation.

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