Payroll Accounting 117 Chapter 3 Social Security Taxes

  1. Person (p. 3-2)
    An individual, a trust or estate, a partnership, or a corporation
  2. Employer (p. 3-2)
    If the person employs one or more individuals for the performances of services in the United States, unless such services or employment are specifically exempted by the law.
  3. Employment (p. 3-2)
    Applies to any service performed by employees for their employer, regardless of the citizenship or residence of either.
  4. Independent Contractors (p. 3-4)
    As persons who follow an independent trade, business, or profession where they offer their services to the public.
  5. Attributed Tip Income Program (p. 3-7)
    Under ATIP, a formula based on the employer's credit card sales determines the amount of tips that must be reported to the IRS.

    To be eligible to use ATIP, the employer must have at least 20 percent of its gross receipts from charged receipts that show charged tips and at least 75 percent of its tipped employees must sign a participation agreement.
  6. Sick Pay (p. 3-7)
    Any payment made to individuals due to personal injury or sickness that does not constitute wages.
  7. Educational Assistance (p. 3-8)
    Refers to the expenses that an employer pays for an employee's education, such as tuition, fees, and payments for books, supplies, and equipment.
  8. Taxable Wage Base (p. 3-9)
    Maximum amount of wages that can be taxed for OASDI
  9. Self-Employment Income (p. 3-12)
    Self employment income generally consists of the net earnings derived by individuals from a business or profession carried on as a sole proprietorship or as a partnership
  10. Loopback Period (p. 3-17)
    The amount of employment taxes that the employer reported on the quarterly returns for the four quarters in the lookback period determines if the employer is a monthly or a semiweekly depositor. A lookback period consists of four quarters beginning July 1 of the second preceding year and ending June 30 of the prior year. These four quarters are the employer's lookback period even if no taxes were reported
  11. Monthly Depositor (p. 3-17)
    Monthly Depositor Reported

    $50,000 or less in lookback period.

    Required deposits—By the 15th of the following month (if not a banking day, next banking day).
  12. Semiweekly Depositor (p. 3-17)
    Reported—More than $50,000 in lookback period.

    Required deposits (Within three business days of the semiweekly period. If any of the three weekdays is a nonbusiness day, add one additional business day to the due date.)

    Payday on Wednesday, Thursday, or Friday—due following Wednesday.

    Payday on Saturday, Sunday, Monday, or Tuesday—due following Friday.
  13. Safe Harbor Rule (p. 3-18)
  14. Shortfall (p. 3-18)
    A shortfall is the excess of the amount of employment taxes required to be deposited over the amount deposited on or before the last date prescribed for the deposit.
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Payroll Accounting 117 Chapter 3 Social Security Taxes
Social Security Taxes