What's New
941TeleFile discontinued. The second quarter 2005 Form 941 was the last quarterly return that could be filed using the 941TeleFile system. Former 941TeleFile users are encouraged to use other convenient IRS e-file options by accessing the IRS website at www.irs.gov and clicking on the e-file logo in the lower-left corner.
Annual employment tax filing for small employers. Soon, certain small employers may be qualified to file Form 944, Employer's Annual Federal Tax Return, rather than Form 941, Employer's Quarterly Federal Tax Return, to report their employment taxes. The IRS will publish more information about this form and who will qualify to file the form as it becomes available.
Credit card payment of tax. Beginning in 2006, employers can pay the balance due shown on Forms 940 and 941 by credit card. For more information, see the 2005 Instructions for Form 940 and the 2006 Instructions for Form 941.
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 IRS review of Forms W-4 on page 15 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 New procedure for withholding income taxes on the wages of nonresident alien employees on page 14.
Ordering employer tax products. This is the last year that you will receive an order blank (Form 7018-A, located at the end of this publication) for employer tax products and information returns. For faster service, order your 2005 and 2006 forms online at www.irs.gov/businesses and select “Online Ordering of Employer Forms.” Instead of ordering paper Forms W-2 and W-3, consider filing them electronically using the Social Security Administration's (SSA) free e-file service. Visit SSA's Employer Reporting Instructions and Information website at www.socialsecurity.gov/employer, select “Electronically File Your W-2s,” and provide registration information. You will be able to create and file “fill-in” versions of Forms W-2 with SSA and can print out completed copies of Forms W-2 for filing with state and local governments, distribution to your employees, and for your records. Form W-3 will be created for you based on your Forms W-2.
Social security and Medicare tax for 2006. Do not withhold social security tax after an employee reaches $94,200 in social security wages. (There is no limit on the amount of wages subject to Medicare tax.) Social security and Medicare taxes apply to the wages of household workers you pay $1,500 or more in cash. Social security and Medicare taxes apply to election workers who are paid $1,300 or more.
