If the three-part test is met, a successor may take credit for the wages paid by the predecessor for purposes of calculating the amount of employer FICA and FUTA
taxes the successor owes.
The FICA, FUTA
, and SUI rules, in contrast, are designed to support social welfare programs.
The Supreme Court rejected this third argument, saying the amendment's purpose primarily was to set a "yardstick" for measuring wages for FICA and FUTA
for administrative convenience, not to ratify allocations concerning back pay.
Specifically, with respect to ISOs and ESPP options exercised on or after publication of the notice and before January 1, 2003, the IRS will not assess FICA or FUTA
taxes on exercise or require income tax withholding at disqualifying disposition.
The court in Eastman Kodak reasoned that because of the yearly FICA and FUTA
wage ceilings, the obligation to pay those taxes was not fixed and certain as of the last day of the employer's tax year in which the employees earned the compensation.
tax liability owed by household employers in 1995, and later, is reported on form 1040 unless the employer also has a business, in which case it may be shown either on the business' form 940 or 940EZ or on schedule H.
Section 3509 also does not apply to the business's liability for the employer share of FICA taxes or for FUTA
Under the final rules, compensation associated with (1) NQSOs on exercise and (2) deferred compensation when paid or made available to the nonemployee spouse, remains subject to FICA and FUTA
taxes as if it had been retained by the employee.
22, 2004, to make permanent the current moratorium on withholding payroll taxes (including FICA, FUTA
and Federal tax withholding) on a disqualifying disposition of incentive stock options (ISOs) and employee stock purchase plans (ESPPs).
Section 2 of the Social Security Domestic Employment Reform Act of 1994 made two major changes in the rules for household employers: (1) for wages paid after December 31, 1994, reporting and payment of FICA (Social Security and Medicare) and FUTA
(unemployment) taxes and any withheld income taxes are now required on a calendar-year basis and (2), for wages paid after December 31, 1993, household employers are no longer liable for FICA taxes for household employees to whom the employer pays less than $1,000 during the year.
The IRS assessed penalties against Y for failure to timely file its FICA and FUTA
returns under Sec.
Illegal aliens often are hired to do such jobs, but as long as the services are performed in the United States, a worker's citizenship or residency status generally does not affect the applicability of federal income tax, FICA or FUTA