What’s New . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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Contents
What’s New . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Publication 15
Reminders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(Circular E),
Employer’s Tax
Guide
Calendar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
For use in
2026
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1. Employer Identification Number (EIN) . . . . . . . 13
2. Who Are Employees? . . . . . . . . . . . . . . . . . . . . 14
3. Family Employees . . . . . . . . . . . . . . . . . . . . . . 16
4. Employee’s Social Security Number (SSN) . . . 17
5. Wages and Other Compensation . . . . . . . . . . . 18
6. Tips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7. Supplemental Wages . . . . . . . . . . . . . . . . . . . . 23
8. Payroll Period . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9. Withholding From Employees’ Wages . . . . . . . 25
10. Required Notice to Employees About the
Earned Income Credit (EIC) . . . . . . . . . . . . . . 31
11. Depositing Taxes . . . . . . . . . . . . . . . . . . . . . . 31
12. Filing Forms 941, Form 943, Form 944, or
Form 945 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
13. Reporting Adjustments to Forms 941, Form
943, or Form 944 . . . . . . . . . . . . . . . . . . . . . . 40
14. Federal Unemployment (FUTA) Tax . . . . . . . . 43
15. Special Rules for Various Types of Services
and Payments . . . . . . . . . . . . . . . . . . . . . . . . . 46
16. Third-Party Payer Arrangements . . . . . . . . . . 53
17. Federal Agency Certifying Requirements of
Federal Income Taxes Withheld From U.S.
Government Employees Working in, or
Federal Pension Recipients Residing in,
American Samoa, the CNMI, and Guam . . . . . 54
How To Get Tax Help . . . . . . . . . . . . . . . . . . . . . . . 56
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Future Developments
For the latest information about developments related to
Pub. 15, such as legislation enacted after it was
published, go to IRS.gov/Pub15.
Get forms and other information faster and easier at:
• IRS.gov (English)
• IRS.gov/Spanish (Español)
• IRS.gov/Chinese (中文)
Dec 15, 2025
• IRS.gov/Korean (한국어)
• IRS.gov/Russian (Pусский)
• IRS.gov/Vietnamese (Tiếng Việt)
What’s New
Social security and Medicare taxes for 2026. The rate
of social security tax on taxable wages is 6.2% each for
Publication 15 (2026) Catalog Number 10000W
Department of the Treasury Internal Revenue Service www.irs.gov
the employer and employee. The social security wage
base limit is $184,500.
The Medicare tax rate is 1.45% each for the employee
and employer, unchanged from 2025. There is no wage
base limit for Medicare tax.
Social security and Medicare taxes apply to the wages
of household workers you pay $3,000 or more in cash wages in 2026. Social security and Medicare taxes apply to
election workers who are paid $2,500 or more in cash or
an equivalent form of compensation in 2026.
Permanent extension of individual tax rates. P.L.
119-21, commonly known as the One Big Beautiful Bill
Act, permanently extends the individual income tax rates
enacted by the Tax Cuts and Jobs Act (P.L. 115-97). Employers will continue to use Pub. 15-T, Federal Income Tax
Withholding Methods, to figure federal income tax withholding.
Withholding on supplemental wages. The withholding
rate on supplemental wages remains 22% (37% if supplemental wages paid to an employee during the calendar
year exceed $1 million) because P.L. 119-21 permanently
extended the individual tax rates enacted in P.L. 115-97.
See section 7 for more information about supplemental
wages.
Backup withholding. The backup withholding rate remains 24% because P.L. 119-21 permanently extended
the individual tax rates enacted in P.L. 115-97. For reportable payments made under section 6041(a) or 6041A(a)
that are made in calendar year 2026 and subject to
backup withholding, P.L. 119-21 increases the aggregate
reportable payment threshold from $600 to $2,000. This
threshold will be adjusted for inflation for each calendar
year after 2026. For more information on backup withholding, see Backup withholding, later.
Information reporting threshold increased for certain
payments. For payments made after calendar year 2025,
P.L. 119-21 increases the information reporting (for example, Forms 1099-MISC and Forms 1099-NEC) payment
threshold from $600 to $2,000 in a calendar year for certain payments to persons engaged in a trade or business
and payments for services. The threshold also increases
to $2,000 for wage reporting (Forms W-2, Wage and Tax
Statement) if no federal income, social security, or Medicare tax was withheld. This threshold will be adjusted for
inflation for each calendar year after 2026. For more information, see the General Instructions for Forms W-2 and
W-3 and the General Instructions for Certain Information
Returns.
Withholding on qualified tips. For tax years beginning
after 2024 and ending before 2029, P.L. 119-21 allows
employees and self-employed individuals to deduct up to
$25,000 of qualified tips received in occupations that customarily and regularly received tips on or before December 31, 2024, on their income tax returns. Qualified tips
are cash tips, which include voluntary cash or charged tips
received from customers or, in the case of employees,
through tip-sharing arrangements. Mandatory service
charges added to the bill are not qualified tips. Employers
must use an employee’s updated Form W-4, Employee’s
2
Withholding Certificate, if one is submitted by the employee, and the federal income tax withholding procedures in Pub. 15-T to allow the employee to account for
their expected deduction and receive more money in each
paycheck instead of waiting until filing their income tax return to receive the full benefit of this deduction. Tips are
still generally subject to both the employer share and employee share of social security tax and Medicare tax if the
tips received are $20 or more per month.
Employers and other payers must file information returns (for example, Forms W-2, 1099-MISC, and
1099-NEC) with the Social Security Administration (SSA)
or IRS, as applicable, and furnish statements to tip recipients showing cash tips received and the Treasury Tipped
Occupation Code(s) of the tip recipient. However, the IRS
has provided transition relief to employers and payers for
the tax year 2025 reporting requirements. For more information, see Notice 2025-62, 2025-48 I.R.B. 740, available
at IRS.gov/irb/2025-48_IRB#NOT-2025-62.
Withholding on qualified overtime compensation.
For tax years beginning after 2024 and ending before
2029, P.L. 119-21 allows individuals (employees and other
workers not treated as employees) to deduct up to
$12,500 ($25,000 if married filing jointly) of qualified overtime compensation from their income subject to federal income tax on their income tax returns. Qualified overtime is
compensation that exceeds the regular rate of pay (such
as the “half” portion of time-and-a-half compensation) that
is required to be paid to an individual under section 7 of
the Fair Labor Standards Act (FLSA) of 1938. The FLSA
provides that employers must generally pay covered, nonexempt employees at least one-and-a-half times their regular rate of pay for hours worked over 40 hours per week.
For more information about overtime compensation, go to
dol.gov/agencies/whd/overtime. Employers must use an
employee’s updated Form W-4, if one is submitted by the
employee, and the federal income tax withholding procedures in Pub. 15-T to allow the employee to account for
their expected deduction and receive more money in each
paycheck instead of waiting until filing their income tax return to receive the full benefit of this deduction. Overtime
compensation is still generally subject to both the employer share and employee share of social security tax
and Medicare tax.
Employers and other payers must file information returns (for example, Forms W-2, 1099-MISC, and
1099-NEC) with the SSA or IRS, as applicable, and furnish statements to overtime recipients showing qualified
overtime compensation paid during the year. However, the
IRS has provided transition relief to employers and payers
for the tax year 2025 reporting requirements. For more information, see Notice 2025-62.
Moving expense reimbursement. P.L. 119-21 permanently eliminates the exclusion for qualified moving expense reimbursements from your employee’s income.
However, the exclusion is available in the case of a member of the U.S. Armed Forces on active duty who moves
because of a permanent change of station due to a military order. The exclusion applies only to reimbursement of
moving expenses that the member could deduct if they
had paid or incurred them without reimbursement. See
Publication 15 (2026)
Moving Expenses in Pub. 3, Armed Forces’ Tax Guide, for
the definition of what constitutes a permanent change of
station and to learn which moving expenses are deductible.
P.L. 119-21 also makes the exclusion available to an
employee or new appointee of the intelligence community
(as defined in section 3 of the National Security Act of
1947 (50 U.S.C. 3003)) (other than a member of the
Armed Forces of the United States) who moves pursuant
to a change in assignment which requires relocation. The
exclusion applies only to reimbursement of moving expenses that an intelligence community employee or appointee
could deduct if they had paid or incurred them without reimbursement.
Employer contributions to Trump accounts. P.L.
119-21 allows for a new type of traditional individual retirement account to be established for a child who has not attained age 18 at the end of year the account is established, known as a Trump account. This account has an
annual contribution limit of $5,000 (other than exempt contributions), which will be indexed for inflation after tax year
2027. Beginning July 4, 2026, employers may contribute
up to $2,500 a year, which will be indexed for inflation after
tax year 2027, toward the $5,000 contribution limit to the
Trump account of an employee or of a dependent of an
employee, and the amount will be excluded from the gross
income of the employee if paid pursuant to a Trump account contribution program. For more information about
employer contributions to Trump accounts, see Pub. 15-A,
Employer’s Supplemental Tax Guide.
Direct deposit of employment tax refunds now available. Executive Order (EO) 14247, Modernizing Payments
To and From America’s Bank Account, issued on March
25, 2025, promotes operational efficiency by mandating
the transition to electronic payments for all federal disbursements. Accordingly, the IRS will now issue employment tax return refunds by direct deposit. Direct deposit is
a fast, simple, safe, and secure way to have your refund
deposited automatically to your checking or savings account. Instead of a direct deposit refund, you can still
choose to have your overpayment applied to your next return by checking the appropriate box on your employment
tax return. For more information, see the instructions for
your employment tax return.
Make balance due payments electronically. EO 14247
also promotes operational efficiency by mandating the
transition to electronic payments for all payments made to
the federal government. Therefore, pay your balance due
on your employment tax return electronically. There are
several easy, safe, and secure ways to pay your balance
due electronically. For more information, see the instructions for your employment tax return.
Employment tax return transcripts are now available
electronically. You can now access Form 940, Form 941,
Form 943, Form 944, and Form 945 return transcripts for
tax years 2023 and later using your IRS business tax account. For more information, go to IRS.gov/
BusinessTranscript. To access your IRS business tax account, go to IRS.gov/BusinessAccount.
Publication 15 (2026)
Reminders
Electronic filing of amended employment tax returns.
You can file an amended Form 940, Employer’s Annual
Federal Unemployment (FUTA) Tax Return; Form 941-X,
Adjusted Employer’s QUARTERLY Federal Tax Return or
Claim for Refund; Form 943-X, Adjusted Employer’s Annual Federal Tax Return for Agricultural Employees or
Claim for Refund; and Form 945-X, Adjusted Annual Return of Withheld Income Tax or Claim for Refund, electronically using Modernized e-File (MeF). At this time, MeF
can’t be used to file Form 944-X, Adjusted Employer’s ANNUAL Federal Tax Return or Claim for Refund; or Form
CT-1 X, Adjusted Employer’s Annual Railroad Retirement
Tax Return or Claim for Refund. For more information on
electronic filing, go to IRS.gov/EmploymentEfile.
Pub. 15 is for all employers. Pub. 15 is used by all employers, including agricultural employers and employers in
the U.S. territories. Pub. 51, Agricultural Employer’s Tax
Guide; Pub. 80, Federal Tax Guide for Employers in the
U.S. Virgin Islands, Guam, American Samoa, and the
Commonwealth of the Northern Mariana Islands; and Pub.
179, Guía Contributiva Federal para Patronos Puertorriqueños, have been discontinued. If you prefer Pub. 15 in
Spanish, see Pub. 15 (sp).
Unless otherwise noted, references throughout this
publication to Form W-2 include Forms W-2AS, W-2CM,
W-2GU, W-2VI, and Form 499R-2/W-2PR; references to
Form W-2c include Form 499R-2c/W-2cPR; references to
Form W-3 include Form W-3SS and Form W-3 (PR); and
references to Form W-3c include Form W-3C (PR).
The COVID-19 related credit for qualified sick and
family leave wages is limited to leave taken after
March 31, 2020, and before October 1, 2021, and may
no longer be claimed on Form 941, Form 943, or
Form 944. Generally, the credit for qualified sick and family leave wages, as enacted under the Families First Coronavirus Response Act (FFCRA) and amended and extended by the COVID-related Tax Relief Act of 2020, for leave
taken after March 31, 2020, and before April 1, 2021, and
the credit for qualified sick and family leave wages under
sections 3131, 3132, and 3133 of the Internal Revenue
Code, as enacted under the American Rescue Plan Act of
2021 (the ARP), for leave taken after March 31, 2021, and
before October 1, 2021, have expired. However, employers that pay qualified sick and family leave wages in 2024,
2025, or 2026 for leave taken after March 31, 2020, and
before October 1, 2021, are eligible to claim a credit for
qualified sick and family leave wages in 2024, 2025, or
2026. Effective for tax periods beginning after 2023, the
lines used to claim the credit for qualified sick and family
leave wages have been removed from Form 941, Employer’s QUARTERLY Federal Tax Return; Form 943, Employer’s Annual Tax Return for Agricultural Employees; and
Form 944, Employer’s ANNUAL Federal Tax Return, because it would be extremely rare for an employer to pay
wages after 2023 for qualified sick and family leave taken
after March 31, 2020, and before October 1, 2021. Instead, if you’re eligible to claim the credit for qualified sick
and family leave wages because you paid the wages after
3
2023 for an earlier applicable leave period, file Form
941-X, Form 943-X, or Form 944-X to claim the credit for
qualified sick and family leave wages paid that year. Filing
a Form 941-X, Form 943-X, or Form 944-X before filing a
Form 941 for the quarter, or Form 943 or Form 944 for the
year, may result in errors or delays in processing your
Form 941-X, Form 943-X, or Form 944-X.
Form 941 (sp), Form 943 (sp), and Form 944 (sp). If
you prefer your form and instructions in Spanish, you can
file Form 941 (sp), Form 943 (sp), or Form 944 (sp).
Qualified small business payroll tax credit for increasing research activities. For tax years beginning
before 2023, a qualified small business may elect to claim
up to $250,000 of its credit for increasing research activities as a payroll tax credit. The Inflation Reduction Act of
2022 (the IRA) increases the election amount to $500,000
for tax years beginning after 2022. The payroll tax credit
election must be made on or before the due date of the
originally filed income tax return (including extensions).
The portion of the credit used against payroll taxes is allowed in the first calendar quarter beginning after the date
that the qualified small business filed its income tax return.
The election and determination of the credit amount that
will be used against the employer’s payroll taxes are made
on Form 6765, Credit for Increasing Research Activities.
The amount from Form 6765 must then be reported on
Form 8974, Qualified Small Business Payroll Tax Credit for
Increasing Research Activities.
Starting in the first quarter of 2023, the payroll tax credit
is first used to reduce the employer share of social security tax up to $250,000 per quarter and any remaining
credit reduces the employer share of Medicare tax for the
quarter. Any remaining credit, after reducing the employer
share of social security tax and the employer share of
Medicare tax, is then carried forward to the next quarter.
Form 8974 is used to determine the amount of the credit
that can be used in the current quarter. The amount from
Form 8974, line 12 or, if applicable, line 17, is reported on
Form 941, Form 943, or Form 944. For more information
about the payroll tax credit, go to IRS.gov/
ResearchPayrollTC. Also see the line 16 instructions in the
Instructions for Form 941 (line 17 instructions in the Instructions for Form 943, or line 13 instructions in the Instructions for Form 944) for information on reducing your
record of tax liability for this credit.
Disaster tax relief. Disaster tax relief is available for
those impacted by disasters. For more information about
disaster tax relief, go to IRS.gov/DisasterTaxRelief.
2026 withholding tables. The Percentage Method and
Wage Bracket Method withholding tables, the employer instructions on how to figure employee withholding, and the
amount to add to a nonresident alien employee’s wages
for figuring federal income tax withholding are included in
Pub. 15-T, available at IRS.gov/Pub15T.
Certification program for professional employer organizations (PEOs). The Stephen Beck, Jr., Achieving a
Better Life Experience (ABLE) Act of 2014 required the
IRS to establish a voluntary certification program for
PEOs. PEOs handle various payroll administration and tax
reporting responsibilities for their business clients and are
4
typically paid a fee based on payroll costs. To become and
remain certified under the certification program, certified
professional employer organizations (CPEOs) must meet
various requirements described in sections 3511 and
7705 and related published guidance. Certification as a
CPEO may affect the employment tax liabilities of both the
CPEO and its customers. A CPEO is generally treated for
employment tax purposes as the employer of any individual who performs services for a customer of the CPEO
and is covered by a contract described in section 7705(e)
(2) between the CPEO and the customer (CPEO contract), but only for wages and other compensation paid to
the individual by the CPEO. To become a CPEO, the organization must apply through the IRS Online Registration
System. For more information or to apply to become a
CPEO, go to IRS.gov/CPEO. Also see Revenue Procedure 2023-18, 2023-13 I.R.B. 605, available at
IRS.gov/irb/2023-13_IRB#REV-PROC-2023-18.
Outsourcing payroll duties. Generally, as an employer,
you’re responsible to ensure that tax returns are filed and
deposits and payments are made, even if you contract
with a third party to perform these acts. You remain responsible if the third party fails to perform any required action. Before you choose to outsource any of your payroll
and related tax duties (that is, withholding, reporting, and
paying over social security, Medicare, FUTA, and federal
income taxes) to a third-party payer, such as a payroll
service provider or reporting agent, go to IRS.gov/
OutsourcingPayrollDuties for helpful information on this
topic. If a CPEO pays wages and other compensation to
an individual performing services for you, and the services
are covered by a CPEO contract, then the CPEO is generally treated as the employer, but only for wages and other
compensation paid to the individual by the CPEO. However, with respect to certain employees covered by a
CPEO contract, you may also be treated as an employer
of the employees and, consequently, may also be liable for
federal employment taxes imposed on wages and other
compensation paid by the CPEO to such employees. For
more information on the different types of third-party payer
arrangements, see section 16.
Aggregate Form 941 or Form 943 filers. Approved
section 3504 agents and CPEOs must complete Schedule R (Form 941), Allocation Schedule for Aggregate Form
941 Filers; or Schedule R (Form 943), Allocation Schedule
for Aggregate Form 943 Filers, as applicable, when filing
an aggregate Form 941 or Form 943. An aggregate quarterly Form 941 or annual Form 943 is filed by an agent approved by the IRS under section 3504 of the Internal Revenue Code. To request approval to act as an agent for an
employer, the agent files Form 2678 with the IRS unless
you’re a state or local government agency acting as an
agent under the special procedures provided in Revenue
Procedure 2013-39, 2013-52 I.R.B. 830, available at
IRS.gov/irb/2013-52_IRB#RP-2013-39. An aggregate
quarterly Form 941 or annual Form 943 is also filed by
CPEOs approved by the IRS under section 7705. To become a CPEO, the organization must apply through the
IRS Online Registration System at IRS.gov/CPEO. CPEOs
file Form 8973, Certified Professional Employer Organization/Customer Reporting Agreement, to notify the IRS that
Publication 15 (2026)
they’ve started or ended a service contract with a client or
customer. CPEOs must generally file Form 941 or Form
943 and the applicable Schedule R electronically. For
more information about a CPEO’s requirement to file electronically, see Revenue Procedure 2023-18.
Other third-party payers that file an aggregate quarterly
Form 941 or annual Form 943, such as non-certified
PEOs, must complete and file the applicable Schedule R if
they have clients that are claiming any employment tax
credit (for example, the qualified small business payroll tax
credit for increasing research activities).
Aggregate Form 940 filers. Approved section 3504
agents and CPEOs must complete Schedule R (Form
940), Allocation Schedule for Aggregate Form 940 Filers,
when filing an aggregate Form 940. Aggregate Forms 940
can be filed by agents acting on behalf of home care service recipients who receive home care services through a
program administered by a federal, state, or local government. To request approval to act as an agent on behalf of
home care service recipients, the agent files Form 2678
with the IRS unless you’re a state or local government
agency acting as an agent under the special procedures
provided in Revenue Procedure 2013-39. Aggregate
Forms 940 are also filed by CPEOs approved by the IRS
under section 7705. CPEOs file Form 8973 to notify the
IRS that they’ve started or ended a service contract with a
client or customer. CPEOs must generally file Form 940
and Schedule R (Form 940) electronically. For more information about a CPEO’s requirement to file electronically,
see Revenue Procedure 2023-18.
Work opportunity tax credit for qualified tax-exempt
organizations hiring qualified veterans. Qualified
tax-exempt organizations that hire eligible unemployed
veterans may be able to claim the work opportunity tax
credit against their payroll tax liability using Form 5884-C.
For more information, go to IRS.gov/WOTC.
Medicaid waiver payments. Notice 2014-7 provides
that certain Medicaid waiver payments are excludable
from income for federal income tax purposes. See Notice
2014-7, 2014-4 I.R.B. 445, available at IRS.gov/irb/
2014-04_IRB#NOT-2014-7. For more information, including questions and answers related to Notice 2014-7, go to
IRS.gov/MedicaidWaiverPayments.
No federal income tax withholding on disability payments for injuries incurred as a direct result of a terrorist attack directed against the United States. Disability payments for injuries incurred as a direct result of a
terrorist attack directed against the United States (or its allies) aren’t included in income. Because federal income
tax withholding is only required when a payment is includible in income, no federal income tax should be withheld
from these payments. See Pub. 907, Tax Highlights for
Persons With Disabilities; and Pub. 3920, Tax Relief for
Victims of Terrorist Attacks.
Voluntary withholding on dividends and other distributions by an Alaska Native Corporation (ANC). A
shareholder of an ANC may request voluntary federal income tax withholding on dividends and other distributions
paid by an ANC. A shareholder may request voluntary
withholding by giving the ANC a completed Form W-4V.
Publication 15 (2026)
For more information, see Notice 2013-77, 2013-50 I.R.B.
632, available at IRS.gov/irb/2013-50_IRB#NOT-2013-77.
Definition of marriage. A marriage of two individuals is
recognized for federal tax purposes if the marriage is recognized by the state or territory of the United States in
which the marriage is entered into, regardless of legal residence. Two individuals who enter into a relationship that is
denominated as marriage under the laws of a foreign jurisdiction or an American Indian tribe are recognized as married for federal tax purposes if the relationship would be
recognized as marriage under the laws of at least one
state or territory of the United States, regardless of legal
residence. Individuals who have entered into a registered
domestic partnership, civil union, or other similar relationship that isn’t denominated as a marriage under the law of
the state or territory of the United States where such relationship was entered into aren’t lawfully married for federal
tax purposes, regardless of legal residence.
Differential wage payments. Qualified differential wage
payments made by employers to individuals serving in the
U.S. Armed Forces are subject to federal income tax withholding but not social security, Medicare, or FUTA tax.
See section 5 for more information.
Severance payments. Severance payments are wages
subject to social security and Medicare taxes, federal income tax withholding, and FUTA tax.
You must receive written notice from the IRS to file
Form 944. If you’ve been filing quarterly Forms 941 and
believe your employment taxes for the calendar year will
be $1,000 or less, and you would like to file an annual
Form 944 instead of quarterly Forms 941, you must contact the IRS during the first calendar quarter of the tax
year to request to file Form 944. You must receive written
notice from the IRS to file Form 944 instead of quarterly
Forms 941 before you may file this form. For more information on requesting to file Form 944, including the methods and deadlines for making a request, see the Instructions for Form 944.
Employers can request to file quarterly Forms 941 instead of an annual Form 944. If you received notice
from the IRS to file Form 944 but would like to file quarterly
Forms 941 instead, you must contact the IRS during the
first calendar quarter of the tax year to request to file quarterly Forms 941. You must receive written notice from the
IRS to file quarterly Forms 941 instead of Form 944 before
you may file these forms. For more information on requesting to file quarterly Forms 941, including the methods and
deadlines for making a request, see the Instructions for
Form 944.
Correcting Form 941, Form 943, or Form 944. If you
discover an error on a previously filed Form 941, make the
correction using Form 941-X. If you discover an error on a
previously filed Form 943, make the correction using Form
943-X. If you discover an error on a previously filed Form
944, make the correction using Form 944-X. Form 941-X,
Form 943-X, and Form 944-X are filed separately from
Form 941, Form 943, and Form 944. Form 941-X, Form
943-X, and Form 944-X are used by employers to claim
refunds or abatements of employment taxes, rather than
Form 843. See section 13 for more information.
5
Zero wage return. If you haven’t filed a “final” Form 940
and “final” Form 941, Form 943, or Form 944, or aren’t a
“seasonal” employer (Form 941 only), you must continue
to file a Form 940 and Forms 941, Form 943, or Form 944,
even for periods during which you paid no wages. The IRS
encourages you to file your “zero wage” Form 940 and
Forms 941, Form 943, or Form 944 electronically. Go to
IRS.gov/EmploymentEfile for more information on electronic filing.
Federal tax deposits must be made by electronic
funds transfer (EFT). You must use EFT to make all federal tax deposits. An EFT can be made using the Electronic Federal Tax Payment System (EFTPS), IRS Direct
Pay, or your IRS business tax account. If you don’t want to
use one of these methods, you can arrange for your tax
professional, financial institution, payroll service, or other
trusted third party to make electronic deposits on your behalf. Also, you may arrange for your financial institution to
initiate a same-day wire payment on your behalf. EFTPS is
a free service provided by the Department of the Treasury.
Payments made using IRS Direct Pay or through your IRS
business tax account are also free. Services provided by
your tax professional, financial institution, payroll service,
or other third party may have a fee.
For more information on making federal tax deposits,
see How To Deposit in section 11. For more information
about IRS Direct Pay, go to IRS.gov/DirectPay. For more
information about making a payment through your IRS
business tax account, go to IRS.gov/BusinessAccount. To
get more information about EFTPS or to enroll in EFTPS,
go to EFTPS.gov or call 800-555-4477, 800-244-4829
(Spanish), or 303-967-5916 (toll call). To contact EFTPS
using Telecommunications Relay Services (TRS) for people who are deaf, hard of hearing, or have a speech disability, dial 711 and then provide the TRS assistant the
800-555-4477 number or 800-733-4829. Additional information about EFTPS is also available in Pub. 966.
Residents of the Philippines working in the Commonwealth of the Northern Mariana Islands (CNMI). Employers must withhold and pay social security and Medicare taxes on wages and other compensation paid to
residents of the Philippines who don’t hold an H-2 status
for services performed as employees in the CNMI unless
those workers are eligible for exemption from social security and Medicare taxes under an exception listed in section 15. For more information, see Announcement
2012-43, 2012-51 I.R.B. 723, available at IRS.gov/irb/
2012-51_IRB#ANN-2012-43.
Federal employers in the CNMI. The U.S. Treasury Department and the CNMI Division of Revenue and Taxation
entered into an agreement under 5 U.S.C. section 5517 in
December 2006. Under this agreement, all federal employers (including the Department of Defense) are required to withhold CNMI income taxes (rather than federal
income taxes) and deposit the CNMI taxes with the CNMI
Treasury for employees who are subject to CNMI taxes
and whose regular place of federal employment is in the
CNMI. For more information, including details on completing Form W-2, go to IRS.gov/5517Agreements. Federal
employers are also required to file quarterly and annual
reports with the CNMI Division of Revenue and Taxation.
6
For questions, contact the CNMI Division of Revenue and
Taxation.
Pub. 5146 explains employment tax examinations
and appeal rights. Pub. 5146 provides employers with
information on how the IRS selects employment tax returns to be examined, what happens during an exam, and
what options an employer has in responding to the results
of an exam, including how to appeal the results. Pub. 5146
also includes information on worker classification issues
and tip exams.
Electronic Filing and Payment
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, the IRS offers you
convenient and secure programs to make filing and
payment easier.
Spend less time worrying about taxes and more time
running your business. Use e-file and electronic payment
options to your benefit.
• For e-file, go to IRS.gov/EmploymentEfile for
additional information. A fee may be charged to file
electronically.
• For electronic payment options, go to IRS.gov/Pay.
• For electronic filing of Forms W-2, including Forms
W-2AS, W-2CM, W-2GU, and W-2VI, and Forms
499R-2/W-2PR, go to SSA.gov/employer. You may be
required to file Forms W-2 electronically. For details,
see the General Instructions for Forms W-2 and W-3.
If you experience problems filing electronically, contact
the SSA at 800-772-6270. To speak with the SSA’s
Regional Employer Services Liaison Officer, go to the
SSA’s Regional Employer Services Liaison Officers
website at SSA.gov/employer/
wage_reporting_specialists.htm. The Regional
Employer Services Liaison Officers are available to
provide assistance with all questions about the SSA’s
payroll reporting processes and applications.
Employers in the CNMI should contact their local tax
department for instructions on completing Form
W-2CM. You can get Form W-2CM and its instructions
by going to Finance.gov.mp/forms.php, or by calling
670-664-1000. The SSA’s Business Services Online
(BSO) is an independent program from the
Government of Puerto Rico electronic filing system.
Employers in Puerto Rico must go to Hacienda.pr.gov
for additional information.
Caution: If you’re filing your tax return or paying your
federal taxes electronically, a valid employer identification
number (EIN) is required at the time the return is filed or
the payment is made. If a valid EIN isn’t provided, the
return or payment won’t be processed. This may result in
penalties. See section 1 for information about applying for
an EIN.
Electronic funds withdrawal (EFW). If you file your employment tax return electronically, you can e-file and use
EFW to pay the balance due in a single step using tax
Publication 15 (2026)
preparation software or through a tax professional. However, don’t use EFW to make federal tax deposits. For
more information on paying your taxes using EFW, go to
IRS.gov/EFW.
Credit or debit card payments. You can pay the balance due shown on your employment tax return by credit
or debit card. Your payment will be processed by a payment processor who will charge a processing fee. Don’t
use a credit or debit card to make federal tax deposits. For
more information on paying your taxes with a credit or
debit card, go to IRS.gov/PayByCard.
Online payment agreement. You may be eligible to apply for an installment agreement online if you can’t pay the
full amount of tax you owe when you file your employment
tax return. For more information, see the instructions for
your employment tax return or go to IRS.gov/OPA.
Forms in Spanish
Many forms and instructions discussed in this publication
have Spanish-language versions available for employers
and employees. Some examples include Form 941 (sp),
Form 944 (sp), Form SS-4 (sp), Form W-4 (sp), and Form
W-9 (sp). Although this publication doesn’t reference
Spanish-language forms and instructions in each instance
that one is available, you can see Pub. 15 (sp) and go to
IRS.gov/SpanishForms
to
determine
if
a
Spanish-language version is available.
Hiring New Employees
Eligibility for employment. You must verify that each
new employee is legally eligible to work in the United
States, including American Samoa, Guam, the CNMI, the
U.S. Virgin Islands (USVI), and Puerto Rico. This includes
completing the U.S. Citizenship and Immigration Services
(USCIS) Form I-9, Employment Eligibility Verification. You
can get Form I-9 at USCIS.gov/Forms. For more information, go to USCIS.gov/I-9-Central or call 800-375-5283 or
800-767-1833 (TTY).
You may use the Social Security Number Verification
Service (SSNVS) at SSA.gov/employer/ssnv.htm to verify
that an employee name matches a social security number
(SSN). A person may have a valid SSN but not be authorized to work in the United States. You may use E-Verify at
E-Verify.gov to confirm the employment eligibility of newly
hired employees.
New hire reporting. All 50 states, and most of the territories, have a new hire registry. You’re required to report any
new employee to a designated state new hire registry. A
new employee is an employee who hasn’t previously been
employed by you or was previously employed by you but
has been separated from such prior employment for at
least 60 consecutive days.
Many states accept a copy of Form W-4 with employer
information added. Go to the Office of Child Support Enforcement website at acf.gov/css/employers for more
information. Employers in American Samoa, Guam, the
Publication 15 (2026)
CNMI, the USVI, and Puerto Rico should contact their local government for information on their new hire registry.
W-4 request. Ask each new employee to complete the
2026 Form W-4. See section 9.
Name and SSN. Record each new employee’s name and
SSN from their social security card if it is available. If an
employee can’t provide their social security card, you
should verify their SSN and their eligibility for employment
as discussed under Verification of SSNs in section 4. Any
employee without a social security card should apply for
one. See section 4.
Information Returns
You must file Forms W-2 to report wages paid to
employees. You may also be required to file information
returns to report certain types of payments made during
the year. For example, you must file Form 1099-NEC,
Nonemployee Compensation, to report payments of $600
or more made in 2025 ($2,000 or more for payments
made in 2026) to persons not treated as employees (for
example, independent contractors) for services performed
for your trade or business. For details about filing Forms
1099 for payments made in 2025 and for information
about required electronic filing, see the General
Instructions for Certain Information Returns for general
information (these general instructions will be replaced by
new Pub. 1099 for payments made after 2025), and the
separate, specific instructions for each information return
you file (for example, the Instructions for Forms
1099-MISC and 1099-NEC). Generally, don’t use Forms
1099 to report wages and other compensation you paid to
employees; report these on Form W-2. See the General
Instructions for Forms W-2 and W-3 for details about filing
Form W-2 and for information about required electronic
filing.
Technical Services Operation (TSO). The IRS operates the TSO to answer questions about reporting on
Forms W-2, W-3, and 1099, and other information returns.
If you have questions related to reporting on information
returns, call 866-455-7438 (toll free), 304-263-8700 (toll
call), or 304-579-4827 (TDD). The center can also be
reached by email at mccirp@irs.gov. Don’t include taxpayer identification numbers (TINs) or attachments in
email because email isn’t secure.
Federal Income Tax
Withholding
Caution: References to federal income tax withholding
don’t apply to employers in American Samoa, Guam, the
CNMI, the USVI, and Puerto Rico, unless you have
employees who are subject to U.S. income tax
withholding. Contact your local tax department for
information about income tax withholding.
Withhold federal income tax from each wage payment
or supplemental unemployment compensation plan
7
Employer Responsibilities
The following list provides a brief summary of your basic responsibilities. Because the individual circumstances for each employer
can vary greatly, responsibilities for withholding, depositing, and reporting employment taxes can differ. Each item in this list has a
page reference to a more detailed discussion in this publication.
New employees:
Verify work eligibility of new employees . . . . . . .
Record employees’ names and SSNs from
social security cards . . . . . . . . . . . . . . . . . . . .
Ask employees for Form W-4 . . . . . . . . . . . . . .
Each payday:
Page
7
7
7
Withhold federal income tax based on each
employee’s Form W-4 . . . . . . . . . . . . . . . . . . .
Withhold employee’s share of social security
25
and Medicare taxes . . . . . . . . . . . . . . . . . . . .
Deposit:
• Withheld federal income tax,
• Withheld and employer social security taxes,
and
• Withheld and employer Medicare taxes . . . . . .
Note: Due date of deposit generally depends
on your deposit schedule (monthly or
semiweekly).
Quarterly (by April 30, July 31, October 31,
and January 31):
Deposit FUTA tax if undeposited amount
is over $500 . . . . . . . . . . . . . . . . . . . . . . . . . .
File Form 941 (pay tax with return if not
required to deposit) . . . . . . . . . . . . . . . . . . . . .
29
31
44
38
benefit payment according to the employee’s Form W-4
and the correct withholding table in Pub. 15-T. Farm
operators and crew leaders must withhold federal income
tax from the wages of farmworkers if the wages are
subject to social security and Medicare taxes. If you’re
paying supplemental wages to an employee, see section
7. If you have nonresident alien employees, see
Withholding federal income taxes on the wages of
nonresident alien employees in section 9.
See section 8 of Pub. 15-A for information about
withholding on pensions (including distributions from
tax-favored retirement plans), annuities, and individual
retirement arrangements (IRAs).
Nonpayroll Federal Income Tax
Withholding
Nonpayroll federal income tax withholding (reported on
Forms 1099 and Form W-2G, Certain Gambling Winnings)
must be reported on Form 945, Annual Return of Withheld
Federal Income Tax. Separate deposits are required for
payroll (Form 941, Form 943, or Form 944) and nonpayroll
8
Annually (see Calendar for due dates):
Page
File Form 943 if required (pay tax with return if
not required to deposit) . . . . . . . . . . . . . . . . . . . . .
38
File Form 944 if required (pay tax with return if
not required to deposit) . . . . . . . . . . . . . . . . . . . . .
38
Remind employees to submit a new Form W-4
if they need to change their federal income tax
withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
Ask for a new Form W-4 from employees
claiming exemption from federal income tax
withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27
Reconcile Forms 941 (or Form 943 or Form 944) with
Forms W-2 and W-3 . . . . . . . . . . . . . . . . . . . . . . .
39
Furnish each employee a Form W-2 . . . . . . . . . . . .
11
File Copy A of Forms W-2 and the transmittal
Form W-3 with the SSA . . . . . . . . . . . . . . . . . . . . .
Furnish each payee a Form 1099 (for example,
Form 1099-NEC) . . . . . . . . . . . . . . . . . . . . . . . . .
File Forms 1099 and the transmittal Form
1096 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
File Form 940 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
File Form 945 for any nonpayroll income tax
withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
11
11
11
11
(Form 945) withholding. Nonpayroll items include the
following.
• Pensions (including distributions from tax-favored
retirement plans, for example, section 401(k), section
403(b), and governmental section 457(b) plans),
annuities, and IRA distributions.
• Military retirement.
• Gambling winnings.
• Indian gaming profits.
• Certain government payments on which the recipient
elected voluntary federal income tax withholding.
• Dividends and other distributions by an ANC on which
the recipient elected voluntary federal income tax
withholding.
• Payments subject to backup withholding.
For details on depositing and reporting nonpayroll
federal income tax withholding, see the Instructions for
Form 945.
Distributions from nonqualified pension plans and
deferred compensation plans. Because distributions to
participants from some nonqualified pension plans and
deferred compensation plans (including section 457(b)
plans of tax-exempt organizations) are treated as wages
and are reported on Form W-2, federal income tax
Publication 15 (2026)
withheld must be reported on Form 941, Form 943, or
Form 944, not on Form 945. However, distributions from
such plans to a beneficiary or estate of a deceased employee aren’t wages and are reported on Forms 1099-R,
Distributions From Pensions, Annuities, Retirement or
Profit-Sharing Plans, IRAs, Insurance Contracts, etc.; federal income tax withheld must be reported on Form 945.
Backup withholding. You must generally withhold 24%
of certain taxable payments if the payee fails to furnish you
with their correct TIN. This withholding is referred to as
“backup withholding.”
Payments subject to backup withholding include interest, dividends, patronage dividends, rents, royalties, commissions, nonemployee compensation, payments made in
settlement of payment card or third-party network transactions, and certain other payments you make in the course
of your trade or business. In addition, transactions by
brokers and barter exchanges and certain payments
made by fishing boat operators are subject to backup
withholding.
You can use Form W-9 to request payees to furnish
their TINs. Form W-9 must be used when payees must
certify that the number furnished is correct, or when payees must certify that they’re not subject to backup withholding or are exempt from backup withholding. The Instructions for the Requester of Form W-9 include a list of
types of payees who are exempt from backup withholding.
For more information, see Pub. 1281, Backup Withholding
for Missing and Incorrect Name/TIN(s).
Caution: Backup withholding doesn’t apply to wages,
pensions, annuities, IRAs (including simplified employee
pension (SEP) and SIMPLE retirement plans), section
404(k) distributions from an employee stock ownership
plan (ESOP), medical savings accounts (MSAs), health
savings accounts (HSAs), long-term-care benefits, or real
estate transactions.
Recordkeeping
Keep all records of employment taxes for at least 4 years.
These should be available for IRS review. Your records
should include the following information.
• Your EIN.
• Amounts and dates of all wage, annuity, and pension
payments.
• Amounts of tips reported to you by your employees.
• Records of allocated tips.
• The fair market value (FMV) of in-kind wages paid.
• Names, addresses, SSNs, and occupations of
employees and recipients.
• Any employee copies of Forms W-2 and W-2c
returned to you as undeliverable.
• Dates of employment for each employee.
• Periods for which employees and recipients were paid
while absent due to sickness or injury and the amount
Publication 15 (2026)
and weekly rate of payments you or third-party payers
made to them.
• Copies of employees’ and recipients’ federal income
tax withholding certificates (Forms W-4, W-4P, W-4R,
W-4S, and W-4V).
• Dates and amounts of tax deposits you made and
acknowledgment numbers for deposits made by
EFTPS.
• Copies of returns filed and confirmation numbers.
• Records of fringe benefits and expense
reimbursements provided to your employees,
including substantiation.
• Documentation to substantiate any credits claimed.
Records related to qualified sick leave wages and
qualified family leave wages for leave taken after
March 31, 2021, and before October 1, 2021, should
be kept for at least 6 years. For more information on
substantiation requirements, go to IRS.gov/PLC.
Records related to qualified wages for the COVID-19
related employee retention credit paid after June 30,
2021, should be kept for at least 7 years. For more
information on substantiation requirements, go to
IRS.gov/ERC.
If a crew leader furnished you with farmworkers, you
must keep a record of the name, permanent mailing
address, and EIN of the crew leader. If the crew leader
has no permanent mailing address, record their present
address.
Change of Business Name
Notify the IRS immediately if you change your business
name. Write to the IRS office where you file your returns,
using the Without a payment address provided in the
instructions for your employment tax return, to notify the
IRS of any business name change. See Pub. 1635 to see
if you need to apply for a new EIN.
Change of Business Address
or Responsible Party
Notify the IRS immediately if you change your business
address or responsible party. Complete and mail Form
8822-B to notify the IRS of a business address or
responsible party change. For a definition of “responsible
party,” see the Instructions for Form SS-4.
Filing Addresses
Generally, your filing address for Form 940, Form 941,
Form 943, Form 944, Form 945, or Form CT-1 depends on
the location of your residence or principal place of
business and whether or not you’re including a payment
with your return. There are separate filing addresses for
9
these returns if you’re a tax-exempt organization or
government entity. See the separate instructions for Form
940, Form 941, Form 943, Form 944, Form 945, or Form
CT-1 for the filing addresses.
Private Delivery Services
(PDSs)
You can use certain PDSs designated by the IRS to meet
the “timely mailing as timely filing” rule for tax returns. Go
to IRS.gov/PDS for the current list of PDSs.
The PDS can tell you how to get written proof of the
mailing date.
For the IRS mailing address to use if you’re using a
PDS, go to IRS.gov/PDSstreetAddresses. Select the
mailing address listed on the webpage that is in the same
state as the address to which you would mail returns filed
without a payment, as shown in the instructions for your
employment tax return.
PDSs can’t deliver items to P.O. boxes. You must use
the U.S. Postal Service (USPS) to mail any item to an IRS
P.O. box address.
Dishonored Payments
Any form of payment that is dishonored and returned from
a financial institution is subject to a penalty. The penalty is
$25 or 2% of the payment, whichever is more. However,
the penalty on dishonored payments of $24.99 or less is
an amount equal to the payment. For example, a
dishonored payment of $18 is charged a penalty of $18.
E-News for Payroll
Professionals
The IRS has a subscription-based email service for payroll
professionals. Subscribers will receive periodic updates
from the IRS. The updates may include information
regarding recent legislative changes affecting federal
payroll reporting, IRS news releases and special
announcements pertaining to the payroll industry, new
employment tax procedures, and other information
specifically affecting federal payroll tax returns. To
IRS.gov/Newsroom/E-Newssubscribe,
go
to
Subscriptions.
Telephone Help
Tax questions. You can call the IRS Business and Specialty Tax Line with your employment tax questions at
800-829-4933.
Help for people with disabilities. You may call
800-829-4059 (TDD/TTY for persons who are deaf, hard
of hearing, or have a speech disability) with any
10
employment tax questions. You may also use this number
for assistance with unresolved tax problems.
Additional
information. Go
to
IRS.gov/
EmploymentTaxes for additional employment tax information. For general tax information relevant to agricultural
employers, go to IRS.gov/AgricultureTaxCenter. For information about employer responsibilities under the Affordable Care Act, go to IRS.gov/ACA.
Ordering Employer Tax Forms,
Instructions, and Publications
You can view, download, or print most of the forms,
instructions, and publications you may need at IRS.gov/
Forms. Otherwise, you can go to IRS.gov/OrderForms to
place an order and have them mailed to you. The IRS will
process your order as soon as possible. Don’t resubmit
requests you’ve already sent us. You can get forms,
instructions, and publications faster online.
Instead of ordering paper Forms W-2 and W-3,
consider filing them electronically using the SSA’s free
e-file service. Go to the SSA’s Employer W-2 Filing
Instructions & Information webpage at SSA.gov/employer
to learn more about BSO. You’ll be able to create Forms
W-2 online and submit them to the SSA by typing your
wage information into easy-to-use fill-in fields. In addition,
you can print out completed copies of Forms W-2 to file
with state or local governments, distribute to your
employees, and keep for your records. Form W-3 will be
created for you based on your Forms W-2.
The SSA’s BSO is an independent program from the
Government of Puerto Rico electronic filing system.
Employers in Puerto Rico must go to Hacienda.pr.gov for
additional information.
Photographs of Missing
Children
The IRS is a proud partner with the National Center for
Missing & Exploited Children® (NCMEC). Photographs of
missing children selected by the Center may appear in
this publication 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.
Calendar
The following is a list of important dates and
responsibilities. The dates listed here haven’t been
adjusted for Saturdays, Sundays, and legal holidays. Pub.
509, Tax Calendars (for use in 2026), adjusts the dates for
Saturdays, Sundays, and legal holidays. See section 11
for information about depositing taxes reported on Form
941, Form 943, Form 944, and Form 945. See section 14
Publication 15 (2026)
for information about depositing FUTA tax. Due dates for
forms required for health coverage reporting aren’t listed
here. For these dates, see Pub. 509.
If any date shown next for filing a return, furnishing a
form, or depositing taxes falls on a Saturday, Sunday, or
legal holiday, the due date is the next business day. The
term “legal holiday” means any legal holiday in the District
of Columbia. A statewide legal holiday delays a filing due
date only if the IRS office where you’re required to file is
located in that state. However, a statewide legal holiday
doesn’t delay the due date of federal tax deposits. See
Deposits Due on Business Days Only in section 11. For
any filing due date, you’ll meet the “file” or “furnish”
requirement if the envelope containing the return or form is
properly addressed, contains sufficient postage, and is
postmarked by the USPS on or before the due date, or
sent by an IRS-designated PDS on or before the due date.
See Private Delivery Services (PDSs) under Reminders,
earlier, for more information.
Fiscal-year taxpayers. The due dates listed next apply
whether you use a calendar or a fiscal year.
By January 31
File Form 941 or Form 944.
File Form 941 for the
fourth quarter of the previous calendar year and deposit
any undeposited income, social security, and Medicare
taxes. You may pay these taxes with Form 941 if your total tax liability for the quarter (Form 941, line 12) is less
than $2,500. File Form 944 for the previous calendar
year instead of Form 941 if the IRS has notified you in
writing to file Form 944. Pay any undeposited income,
social security, and Medicare taxes with your Form 944.
You may pay these taxes with Form 944 if your total tax
liability for the year (Form 944, line 9) is less than
$2,500. For additional rules on when you can pay your
taxes with your return, see Payment with return in section 11. If you timely deposited all taxes when due, you
may file by February 10.
File Form 943.
Agricultural employers file Form 943
for the previous calendar year and deposit any undeposited income, social security, and Medicare taxes. You
may pay these taxes with Form 943 if your total tax liability for the year (Form 943, line 13) is less than $2,500. If
you timely deposited all taxes when due, you may file by
February 10.
File Form 945.
File Form 945 to report any nonpayroll
federal income tax withheld. If you deposited all taxes
when due, you may file by February 10. See Nonpayroll
Federal Income Tax Withholding under Reminders, earlier, for more information.
File Form 940.
File Form 940 to report any FUTA tax.
However, if you deposited all of the FUTA tax when due,
you may file by February 10. See section 14 for more information on FUTA tax.
payees by January 31, but some can be furnished by
February 15. For more information, see the Guide to Information Returns chart in the General Instructions for
Certain Information Returns.
File Form W-2.
File with the SSA Copy A of all 2025
paper and electronic Forms W-2 with Form W-3, Transmittal of Wage and Tax Statements. Forms W-2AS,
W-2CM, W-2GU, and W-2VI are filed with Form W-3SS.
Forms 499R-2/W-2PR are filed with Form W-3 (PR). For
more information on reporting Form W-2 information to
the SSA electronically, go to the SSA’s Employer W-2
Filing Instructions & Information webpage at SSA.gov/
employer. If filing electronically, via the SSA’s Form W-2
Online service, the SSA will generate Form W-3 data
from the electronic submission of Form(s) W-2.
Send Copy 1 of Forms W-2AS, W-2CM, W-2GU, and
W-2VI, and Form W-3SS to your local tax department at
the address shown on Form W-3SS. For more information
on Copy 1, contact your local tax department. Employers
in the CNMI should contact their local tax department for
instructions on how to file Copy 1. For additional information on how to file Forms 499R-2/W-2PR with the Puerto
Rico Department of Treasury, go to Hacienda.pr.gov or
call 787-622-0123.
File Form 1099-NEC reporting nonemployee compensation.
File with the IRS Copy A of all 2025 paper
and electronic Forms 1099-NEC. Paper forms must be
filed with Form 1096, Annual Summary and Transmittal
of U.S. Information Returns. For information on filing information returns electronically with the IRS, see Pub.
1220, Specifications for Electronic Filing of Forms 1097,
1098, 1099, 3921, 3922, 5498, and W-2G.
By February 15
Request a new Form W-4 from exempt employees.
Ask for a new Form W-4 from each employee who
claimed exemption from federal income tax withholding
last year.
On February 16
Forms W-4 claiming exemption from withholding expire.
Any Form W-4 claiming exemption from withholding for the previous year has now expired. Begin
withholding for any employee who previously claimed
exemption from withholding but hasn’t given you a new
Form W-4 for the current year. If the employee doesn’t
give you a new Form W-4, withhold tax as if they had
checked the box for Single or Married filing separately in
Step 1(c) and made no entries in Step 2, Step 3, or Step
4 of the 2026 Form W-4. See section 9 for more information. If the employee gives you a new Form W-4 claiming
exemption from withholding after February 15, you may
apply the exemption to future wages, but don’t refund
taxes withheld while the exempt status wasn’t in place.
Furnish Forms 1099 and W-2.
Furnish each employee a completed 2025 Form W-2. Furnish a 2025
Form 1099-NEC to payees for nonemployee
compensation. Most Forms 1099 must be furnished to
Publication 15 (2026)
11
By February 28
File paper 2025 Forms 1099 and 1096.
File Copy A
of all paper 2025 Forms 1099, except Forms 1099-NEC,
with Form 1096 with the IRS. For electronically filed returns, see By March 31, later.
File paper Form 8027.
File paper Form 8027, Employer’s Annual Information Return of Tip Income and
Allocated Tips, with the IRS. See section 6. For electronically filed returns, see By March 31 next.
By March 31
File electronic 2025 Forms 1099 and 8027.
File
electronic 2025 Forms 1099, except Forms 1099-NEC,
with the IRS. Also file electronic Form 8027 with the IRS.
For information on filing information returns electronically with the IRS, see Pub. 1220 and Pub. 1239, Specifications for Electronic Filing of Form 8027, Employer’s
Annual Information Return of Tip Income and Allocated
Tips.
By April 30, July 31, October 31, and
January 31
Deposit FUTA tax.
Deposit FUTA tax for the quarter
(including any amount carried over from other quarters)
if over $500. If $500 or less, carry it over to the next
quarter. See section 14 for more information.
File Form 941.
File Form 941 and deposit any undeposited income, social security, and Medicare taxes.
You may pay these taxes with Form 941 if your total tax
liability for the quarter (Form 941, line 12) is less than
$2,500. If you timely deposited all taxes when due, you
may file by May 10, August 10, November 10, or February 10, respectively. Don’t file Form 941 for these quarters if you have been notified to file Form 944 and you
didn’t request and receive written notice from the IRS to
file quarterly Forms 941.
Before December 1
New Forms W-4.
Remind employees to submit a new
Form W-4 if their filing status, other income, deductions,
or credits have changed or will change for the next year.
Also remind employees to submit a new Form W-4 if
they made a mid-year change to their Form W-4 based
on their use of the IRS Tax Withholding Estimator available at IRS.gov/W4App. Employees that made a
mid-year change may be underwithheld or overwithheld
once their Form W-4 is applied to the next full calendar
year.
Introduction
This publication explains your tax responsibilities as an
employer, including agricultural employers and employers
whose principal place of business is in American Samoa,
12
Guam, the CNMI, the USVI, or Puerto Rico. It explains the
requirements for withholding, depositing, reporting, paying, and correcting employment taxes. It explains the
forms you must give to your employees, those your employees must give to you, and those you must send to the
IRS and the SSA. References to “income tax” in this guide
apply only to federal income tax. Contact your state or local tax department to determine their rules. Whenever the
term “United States” is used in this publication, it includes
American Samoa, Guam, the CNMI, the USVI, and Puerto
Rico, unless otherwise noted.
When you pay your employees, you don’t pay them all
the money they earned. As their employer, you have the
added responsibility of withholding taxes from their paychecks. The federal income tax and employees’ share of
social security and Medicare taxes that you withhold from
your employees’ paychecks are part of their wages that
you pay to the U.S. Treasury instead of to your employees.
Your employees trust that you pay the withheld taxes to
the U.S. Treasury by making federal tax deposits. This is
the reason that these withheld taxes are called trust fund
taxes. If federal income, social security, or Medicare tax
that must be withheld isn’t withheld or isn’t deposited or
paid to the U.S. Treasury, the trust fund recovery penalty
may apply. See section 11 for more information.
This publication also provides employers, including employers in the USVI and Puerto Rico, with a summary of
their responsibilities in connection with the tax under the
Federal Unemployment Tax Act, known as FUTA tax. See
section 14 for more information.
Additional employment tax information is available in
Pubs. 15-A, 15-B, and 15-T. Pub. 15-A includes specialized information supplementing the basic employment tax
information provided in this publication. 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. Pub. 15-T includes
the federal income tax withholding tables and instructions
on how to use the tables.
Most employers must withhold (except FUTA), deposit,
report, and pay the following employment taxes.
• Income tax.
• Social security tax.
• Medicare tax.
• FUTA tax.
There are exceptions to these requirements. See section 15 for guidance. Railroad retirement taxes are explained in the Instructions for Form CT-1.
Comments and suggestions. We welcome your comments about this publication and suggestions for future
editions.
You can send us comments through IRS.gov/
FormComments.
Or, you can write to:
Internal Revenue Service
Tax Forms and Publications
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224
Publication 15 (2026)
Although we can’t respond individually to each comment received, we do appreciate your feedback and will
consider your comments and suggestions as we revise
our tax forms, instructions, and publications. Don’t send
tax questions, tax returns, or payments to the above address.
Getting answers to your tax questions. If you have
a tax question not answered by this publication, check
IRS.gov and How To Get Tax Help at the end of this publication.
Getting tax forms, instructions, and publications.
Go to IRS.gov/Forms to download current and prior-year
forms, instructions, and publications.
Ordering tax forms, instructions, and publications.
Go to IRS.gov/OrderForms to order current forms, instructions, and publications; call 800-829-3676 to order
prior-year forms and instructions. The IRS will process
your order for forms and publications as soon as possible.
Don’t resubmit requests you’ve already sent us. You can
get forms and publications faster online.
Federal government employers. The information in this
publication, including the rules for making federal tax deposits, applies to federal agencies.
State and local government employers. Payments to
employees for services in the employ of state and local
government employers are generally subject to federal income tax withholding but not FUTA tax. Most elected and
appointed public officials of state or local governments are
employees under common-law rules. See chapter 3 of
Pub. 963, Federal-State Reference Guide. In addition, wages, with certain exceptions, are subject to social security
and Medicare taxes. See section 15 for more information
on the exceptions.
If an election worker is employed in another capacity
with the same government entity, see Revenue Ruling
2000-6 on page 512 of Internal Revenue Bulletin 2000-6
at IRS.gov/pub/irs-irbs/irb00-06.pdf.
You can get information on reporting and social security
coverage from your local IRS office. If you have any questions about coverage under a section 218 (Social Security
Act) agreement, contact the appropriate state official. To
find your State Social Security Administrator, go to the National Conference of State Social Security Administrators
website at NCSSSA.org.
Indian tribal governments. See Pub. 4268 for employment tax information for Indian tribal governments.
Disregarded entities and qualified subchapter S subsidiaries (QSubs). Eligible single-owner disregarded entities and QSubs are treated as separate entities for employment tax purposes. Eligible single-member entities
must report and pay employment taxes on wages paid to
their employees using the entities’ own names and EINs.
See
Regulations
sections
1.1361-4(a)(7)
and
301.7701-2(c)(2)(iv).
Publication 15 (2026)
Useful Items
You may want to see:
Publication
15-A Employer’s Supplemental Tax Guide
15-A
15-B Employer’s Tax Guide to Fringe Benefits
15-B
15-T Federal Income Tax Withholding Methods
15-T
225 Farmer’s Tax Guide
225
583 Starting a Business and Keeping Records
583
1635 Employer Identification Number:
Understanding Your EIN
1635
1. Employer Identification
Number (EIN)
If you’re required to report employment taxes or give tax
statements to employees or annuitants, you need an 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 who
have no employees. Use your EIN on all of the items you
send to the IRS and the SSA. For more information, see
Pub. 1635.
If you don’t have an EIN, you may apply for one online
by going to IRS.gov/EIN. You may also apply for an EIN by
faxing or mailing Form SS-4 to the IRS. If the principal
business was created or organized outside of the United
States or U.S. territories, you may also apply for an EIN by
calling 267-941-1099 (toll call). Don’t use an SSN in place
of an EIN.
You should have only one EIN. If you have more than
one and aren’t sure which one to use, call 800-829-4933
or 800-829-4059 (TDD/TTY for persons who are deaf,
hard of hearing, or have a speech disability). Give the
numbers you have, the name and address to which each
was assigned, and the address of your main place of business. The IRS will tell you which number to use. For more
information, see Pub. 1635.
If you took over another employer’s business (see Successor employer in section 9), don’t use that employer’s
EIN. If you’ve applied for an EIN but don’t have your EIN
by the time a return is due, file a paper return and enter
“Applied For” and the date you applied for it in the space
shown for the number.
Caution: Always be sure the EIN on the form you file
exactly matches the EIN the IRS assigned to your business. Don’t use your SSN or individual taxpayer identification number (ITIN) on forms that ask for an EIN. If you
used an EIN (including a prior owner’s EIN) on Form 941,
Form 943, or Form 944 that is different from the EIN reported on Form W-3, see Box h—Other EIN used this year in
the General Instructions for Forms W-2 and W-3. On Form
W-3 (PR) for Puerto Rico, “Other EIN used this year” is
reported in box f. The name and EIN on Form 945 must
13
match the name and EIN on your information returns
where federal income tax withholding is reported (for example, backup withholding reported on Form 1099-NEC).
Filing a Form 945 with an incorrect EIN or using another
business’s EIN may result in penalties and delays in processing your return.
sales activities) for one firm or person getting orders from
customers. The orders must be for merchandise for resale
or supplies for use in the customer’s business. The customers must be retailers, wholesalers, contractors, or operators of hotels, restaurants, or other businesses dealing
with food or lodging.
Agricultural employers that have crew leaders. An
agricultural employer must record the crew leader’s name,
address, and EIN. See sections 2 and 14.
Tests. Withhold social security and Medicare taxes
from statutory employees’ wages if all three of the following tests apply.
2. Who Are Employees?
1. The service contract states or implies that almost all
of the services are to be performed personally by
them.
Generally, employees are defined either under common
law or under statutes for certain situations. See Pub. 15-A
for details on statutory employees and nonemployees.
Employee status under common law. Generally, a
worker who performs services for you is your employee if
you have the right to control what will be done and how it
will be done. This is so even when you give the employee
freedom of action. What matters is that you have the right
to control the details of how the services are performed.
See Pub. 15-A for more information on how to determine
whether an individual providing services is an independent contractor or an employee.
Generally, people in business for themselves aren’t employees. For example, doctors, lawyers, veterinarians, and
others in an independent trade in which they offer their
services to the public are usually not employees. If the
business is incorporated, corporate officers who work in
the business are employees of the corporation.
If an employer-employee relationship exists, it doesn’t
matter what it is called. The employee may be called an
agent or independent contractor. It also doesn’t matter
how payments are measured or paid, what they’re called,
or if the employee works full or part time.
Statutory employees. If someone who works for you
isn’t an employee under the common-law rules discussed
earlier, don’t withhold federal income tax from their pay,
unless backup withholding applies. Although the following
persons may not be common-law employees, they’re considered employees by statute for social security and Medicare tax purposes if the conditions under Tests, later, are
met.
a. An agent or commission driver who delivers meat, vegetable, fruit, or bakery products; beverages (other than
milk); laundry; or dry cleaning for someone else.
b. A full-time life insurance salesperson who sells primarily for one company.
c. A homeworker who works at home or off premises by
the guidelines of the person for whom the work is done,
with materials or goods furnished by and returned to that
person or to someone that person designates.
d. A traveling or city salesperson (other than an agent or
commission driver) who works full time (except for sideline
14
2. They have little or no investment in the equipment and
property used to perform the services (other than an
investment in transportation facilities).
3. The services are performed on a continuing basis for
the same payer.
Persons in a or d, earlier, are also employees for FUTA
tax purposes if tests 1 through 3 are met.
Pub. 15-A gives examples of the employer-employee
relationship.
Statutory nonemployees. Direct sellers, qualified real
estate agents, and certain companion sitters are, by law,
considered nonemployees. They’re generally treated as
self-employed for all federal tax purposes, including income and employment taxes. See Pub. 15-A for more information.
Farmworkers. In general, you’re an employer of farmworkers if your employees:
• Raise or harvest agricultural or horticultural products
on your farm (including the raising and feeding of livestock);
• Work in connection with the operation, management,
conservation, improvement, or maintenance of your
farm and its tools and equipment, if the major part of
such service is performed on a farm;
• Provide services relating to salvaging timber, or clearing land of brush and other debris, left by a hurricane
(also known as hurricane labor), if the major part of
such service is performed on a farm;
• Handle, process, or package any agricultural or horti-
cultural commodity in its unmanufactured state if you
produced over half of the commodity (for a group of up
to 20 unincorporated operators, all of the commodity);
or
• Do work for you related to cotton ginning, turpentine,
gum resin products, or the operation and maintenance
of irrigation facilities.
For this purpose, the term “farm” includes stock, dairy,
poultry, fruit, fur-bearing animal, and truck farms, as well
as plantations, ranches, nurseries, ranges, greenhouses
or other similar structures used primarily for the raising of
agricultural or horticultural commodities, and orchards.
Farmwork doesn’t include reselling activities that don’t
involve any substantial activity of raising agricultural or
Publication 15 (2026)
horticultural commodities, such as a retail store or a
greenhouse used primarily for display or storage. It also
doesn’t include processing services that change a commodity from its raw or natural state, or services performed
after a commodity has been changed from its raw or natural state.
Crew leaders. If you’re a crew leader, you’re an employer of farmworkers. A crew leader is a person who furnishes and pays (either on their own behalf or on behalf of
the farm operator) workers to do farmwork for the farm operator. If there is no written agreement between you and
the farm operator stating that you’re their employee and if
you pay the workers (either for yourself or for the farm operator), then you’re a crew leader. For FUTA tax rules, see
section 14.
If you’re a crew leader, you’re not considered the employee of the farm operator for services you perform in furnishing farmworkers and as a member of the crew.
H-2A agricultural workers. On Form W-2, don’t
check box 13 (Statutory employee), as H-2A workers
aren’t statutory employees.
Treating employees as nonemployees. You’ll generally be liable for social security and Medicare taxes and
withheld income tax if you don’t deduct and withhold these
taxes because you treated an employee as a nonemployee. You may be able to figure your liability using special section 3509 rates for the employee share of social
security and Medicare taxes and federal income tax withholding. The applicable rates depend on whether you filed
required Forms 1099. You can’t recover the employee
share of social security tax, Medicare tax, or income tax
withholding from the employee if the tax is paid under section 3509. You’re liable for the income tax withholding regardless of whether the employee paid income tax on the
wages. You continue to owe the full employer share of social security and Medicare taxes. The employee remains
liable for the employee share of social security and Medicare taxes. See section 3509 for details. Also see the Instructions for Form 941-X, the Instructions for Form 943-X,
or the Instructions for Form 944-X.
Section 3509 rates aren’t available if you intentionally
disregard the requirement to withhold taxes from the employee or if you withheld income taxes but not social security or Medicare tax. Section 3509 isn’t available for reStatutory
classifying
statutory
employees.
See
employees, earlier in this section.
If the employer issued required information returns, the
section 3509 rates are the following.
• For social security taxes: employer rate of 6.2% plus
20% of the employee rate of 6.2%, for a total rate of
7.44% of wages.
• For Medicare taxes: employer rate of 1.45% plus 20%
of the employee rate of 1.45%, for a total rate of 1.74%
of wages.
• For Additional Medicare Tax: 0.18% (20% of the employee rate of 0.9%) of wages subject to Additional
Medicare Tax.
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• For federal income tax withholding, the rate is 1.5% of
wages.
If the employer didn’t issue required information returns, the section 3509 rates are the following.
• For social security taxes: employer rate of 6.2% plus
40% of the employee rate of 6.2%, for a total rate of
8.68% of wages.
• For Medicare taxes: employer rate of 1.45% plus 40%
of the employee rate of 1.45%, for a total rate of 2.03%
of wages.
• For Additional Medicare Tax: 0.36% (40% of the employee rate of 0.9%) of wages subject to Additional
Medicare Tax.
• For federal income tax withholding, the rate is 3.0% of
wages.
Relief provisions. If you have a reasonable basis for
not treating a worker as an employee, you may be relieved
from having to pay employment taxes for that worker. To
get this relief, you must file all required federal tax returns,
including information returns, on a basis consistent with
your treatment of the worker. You (or your predecessor)
must not have treated any worker holding a substantially
similar position as an employee for any periods beginning
after 1977. See Pub. 1976, Do You Qualify for Relief Under Section 530.
IRS help. If you want the IRS to determine whether a
worker is an employee, file Form SS-8.
Voluntary Classification Settlement Program (VCSP).
Employers who are currently treating their workers (or a
class or group of workers) as independent contractors or
other nonemployees and want to voluntarily reclassify
their workers as employees for future tax periods may be
eligible to participate in the VCSP if certain requirements
are met. File Form 8952 to apply for the VCSP. For more
information, go to IRS.gov/VCSP.
Business Owned and Operated by
Spouses
If you and your spouse jointly own and operate a business
and share in the profits and losses, you may be partners in
a partnership, whether or not you have a formal partnership agreement. See Pub. 541 for more details. The partnership is considered the employer of any employees, and
is liable for any employment taxes due on wages paid to
its employees.
Exception—qualified joint venture. For tax years beginning after 2006, the Small Business and Work Opportunity Tax Act of 2007 (P.L. 110-28) provides that a “qualified
joint venture,” whose only members are spouses filing a
joint income tax return, can elect not to be treated as a
partnership for federal tax purposes. A qualified joint venture conducts a trade or business where:
• The only members of the joint venture are spouses
who file a joint income tax return,
15
• Both spouses materially participate (see Material par-
ticipation in the instructions for Schedule C (Form
1040), line G) in the trade or business (mere joint ownership of property isn’t enough),
• Both spouses elect to not be treated as a partnership,
and
• The business is co-owned by both spouses and isn’t
held in the name of a state law entity such as a partnership or limited liability company (LLC).
To make the election, all items of income, gain, loss,
deduction, and credit must be divided between the spouses, in accordance with each spouse’s interest in the venture, and reported as sole proprietors on a separate
Schedule C (Form 1040) or Schedule F (Form 1040).
Each spouse must also file a separate Schedule SE (Form
1040) to pay self-employment taxes, as applicable. See
the Instructions for Form 1040-SS for American Samoa,
Guam, the CNMI, the USVI, and Puerto Rico.
Spouses using the qualified joint venture rules are treated as sole proprietors for federal tax purposes and generally don’t need an EIN. If employment taxes are owed by
the qualified joint venture, either spouse may report and
pay the employment taxes due on the wages paid to the
employees using the EIN of that spouse’s sole proprietorship. Generally, filing as a qualified joint venture won’t increase the spouses’ total tax owed on the joint income tax
return. However, it gives each spouse credit for social security earnings on which retirement benefits are based
and for Medicare coverage without filing a partnership return.
If your spouse is your employee, not your partner, see
One spouse employed by another in section 3. For more
information on qualified joint ventures, go to IRS.gov/QJV.
Exception—community income. If you and your
spouse wholly own an unincorporated business as community property under the community property laws of a
state, foreign country, or U.S. territory, you can treat the
business either as a sole proprietorship (of the spouse
who carried on the business) or a partnership. You may
still make an election to be taxed as a qualified joint venture instead of a partnership. See Exception—qualified
joint venture, earlier, in this section.
3. Family Employees
Child employed by parents. Payments for the services
of a child under age 18 who works for their parent in a
trade or business aren’t subject to social security and
Medicare taxes if the trade or business is a sole proprietorship or a partnership in which each partner is a parent
of the child. If these payments are for work other than in a
trade or business, such as domestic work in the parent’s
private home, they’re not subject to social security and
Medicare taxes until the child reaches age 21. However,
see Covered services of a child or spouse, later. Payments for the services of a child under age 21 who works
for their parent, whether or not in a trade or business,
aren’t subject to FUTA tax. Payments for the services of a
16
child of any age who works for their parent are generally
subject to income tax withholding unless the payments
are for domestic work in the parent’s home, or unless the
payments are for work other than in a trade or business
and are less than $50 in the quarter or the child isn’t regularly employed to do such work.
One spouse employed by another. The wages for the
services of an individual who works for their spouse in a
trade or business are subject to income tax withholding
and social security and Medicare taxes, but not to FUTA
tax. However, the payments for services of one spouse
employed by another in other than a trade or business,
such as domestic service in a private home, aren’t subject
to social security, Medicare, and FUTA taxes.
Covered services of a child or spouse. The wages for
the services of a child or spouse are subject to income tax
withholding as well as social security, Medicare, and FUTA
taxes if they work for:
• A corporation, even if it is controlled by the child’s parent or the individual’s spouse;
• A partnership, even if the child’s parent is a partner,
unless each partner is a parent of the child;
• A partnership, even if the individual’s spouse is a partner; or
• An estate, even if it is the estate of a deceased parent.
In these situations, the child or spouse is considered to
work for the corporation, partnership, or estate, not you.
Parent employed by their child. When the employer is
a child employing their parent, the following rules apply.
• Payments for the services of a parent in their child’s
(the employer’s) trade or business are subject to income tax withholding and social security and Medicare taxes.
• Payments for the services of a parent not in their
child’s (the employer’s) trade or business are generally
not subject to social security and Medicare taxes.
Domestic services subject to social security and
Medicare taxes. Social security and Medicare taxes do
apply to payments made to a parent for domestic services
if all of the following apply.
• The parent is employed by their child (the employer).
• The employer has a child or stepchild (including an
adopted child) living in the home.
• The employer is a surviving spouse, divorced and not
remarried, or living with a spouse who, because of a
mental or physical condition, can’t care for their child
or stepchild for at least 4 continuous weeks in the calendar quarter in which the service is performed.
• The child or stepchild of the employer is either under
age 18 or, due to a mental or physical condition, requires the personal care of an adult for at least 4 continuous weeks in the calendar quarter in which the
service is performed.
Publication 15 (2026)
Payments made to a parent employed by their child
aren’t subject to FUTA tax, regardless of the type of services provided.
Guam
Suite 155
770 East Sunset Blvd
Barrigada, GU 96913
4. Employee’s Social Security
Number (SSN)
Commonwealth of the Northern Mariana Islands
MH II Building, Suite 201
Marina Heights Business Park
Saipan, MP 96950
You’re required to get each employee’s name and SSN
and to enter them on Form W-2. An employee’s SSN consists of nine digits arranged as follows: 000-00-0000. This
requirement also applies to resident and nonresident alien
employees. You should ask your employee to show you
their social security card, but the employee isn’t required
to show the card if it isn’t available. However, if an employee can’t provide their social security card, you should
verify their SSN and their eligibility for employment as discussed later in this section under Verification of SSNs.
Caution: Don’t accept a social security card that says
“Not valid for employment.” An SSN issued with this legend doesn’t permit employment.
You may, but aren’t required to, photocopy the social
security card if the employee provides it. If you don’t provide the correct employee name and SSN on Form W-2,
you may owe a penalty unless you have reasonable
cause. See Pub. 1586, Reasonable Cause Regulations &
Requirements for Missing and Incorrect Name/TINs on Information Returns, for information on the requirement to
solicit the employee’s SSN.
Tip: In many cases, a replacement social security
card can be applied for online without visiting an SSA office. In some cases, an SSN application can also be started online before visiting an SSA office. For more information, go to SSA.gov/number-card.
Applying for a social security card. Any employee
who is legally eligible to work in the United States and
doesn’t have a social security card can get one by completing Form SS-5, Application for a Social Security Card,
and submitting the necessary documentation. You can get
Form SS-5 from the SSA website at SSA.gov/forms/
ss-5.pdf, at SSA offices, or by calling 800-772-1213 or
800-325-0778 (TTY). The employee must complete and
sign Form SS-5; it can’t be filed by the employer. You may
be asked to supply a letter to accompany Form SS-5 if the
employee has exceeded their yearly or lifetime limit for the
number of replacement cards allowed.
Where to get and file Form SS-5 in the U.S. territories. Below is a list of the U.S. SSA offices located in the
U.S. territories.
American Samoa
Centennial Building 3rd Floor, Suite 302
1 Utulei Rd
Pago Pago, AS 96799
Publication 15 (2026)
U.S. Virgin Islands
1st Floor, Suite 14
8000 Nisky Shopping CT
St. Thomas, VI 00802
Additional information is available on the Social Security Office Locator page at secure.ssa.gov/ICON. Also go
to this website and enter your ZIP code to find your nearest SSA office in Puerto Rico.
Applying for an SSN. If you file Form W-2 on paper and
your employee applied for an SSN but doesn’t have one
when you must file Form W-2, enter “Applied For” on the
form. If you’re filing electronically, enter all zeros
(000-00-0000 if creating forms online or 000000000 if uploading a file) in the SSN field. When the employee receives the SSN, file Copy A of Form W-2c, Corrected
Wage and Tax Statement, with the SSA to show the employee’s SSN. Furnish Copies B, C, and 2 of Form W-2c to
the employee. Up to 25 Forms W-2c for each Form W-3c,
Transmittal of Corrected Wage and Tax Statements, may
be filed per session online with no limit on the number of
sessions. For more information, go to the SSA’s Employer
W-2 Filing Instructions & Information webpage at
SSA.gov/employer. Advise your employee to correct the
SSN on their original Form W-2.
Correctly record the employee’s name and SSN. Record the name and SSN of each employee as they’re
shown on the employee’s social security card. If the employee’s name isn’t correct as shown on the card (for example, because of marriage or divorce), the employee
should request an updated card from the SSA. Continue
to report the employee’s wages under the old name until
the employee shows you the updated social security card
with the corrected name.
If the SSA issues the employee an updated card after a
name change, or a new card with a different SSN after a
change in alien work status, file a Form W-2c to correct
the name/SSN reported for the most recently filed Form
W-2. It isn’t necessary to correct other years if the previous name and number were used for years before the
most recent Form W-2.
IRS ITINs for aliens. Don’t accept an ITIN in place of an
SSN for employee identification or for work. An ITIN is
only available to resident and nonresident aliens who
aren’t eligible for U.S. employment and need identification
for other tax purposes. You can identify an ITIN because it
is a nine-digit number, formatted like an SSN, that starts
with the number “9” and has a range of numbers from “50–
17
65,” “70–88,” “90–92,” and “94–99” for the fourth and fifth
digits (for example, 9NN-7N-NNNN). For more information
about ITINs, see the Instructions for Form W-7 or go to
IRS.gov/ITIN.
Caution: An individual with an ITIN who later becomes eligible to work in the United States must obtain an
SSN. If the individual is currently eligible to work in the
United States, instruct the individual to apply for an SSN
and follow the instructions under Applying for an SSN,
earlier in this section. Don’t use an ITIN in place of an
SSN on Form W-2.
Verification of SSNs. Employers and authorized reporting agents can use the Social Security Number Verification Service (SSNVS) to instantly verify that an employee
name matches an SSN for up to 10 names and SSNs (per
screen) at a time, or submit an electronic file of up to
250,000 names and SSNs and usually receive the results
the next business day. Go to SSA.gov/employer/ssnv.htm
for more information. A person may have a valid SSN but
not be authorized to work in the United States. Employers
may use E-Verify at E-Verify.gov to confirm the employment eligibility of newly hired employees.
Accessing the SSNVS. The SSA’s BSO is used to
access the SSNVS. BSO users will need a social security
online account. You can use an existing Login.gov credential or ID.me credential. If you don’t have a Login.gov credential or an ID.me credential, you’ll need to create one.
For more information, go to the SSA’s website at SSA.gov/
bso.
5. Wages and Other
Compensation
Wages subject to federal employment taxes generally include all pay you give to an employee for services performed. The pay may be in cash or in other forms. It includes
salaries,
vacation
allowances,
bonuses,
commissions, and taxable fringe benefits. It doesn’t matter
how you measure or make the payments. Amounts an employer pays as a bonus for signing or ratifying a contract in
connection with the establishment of an employer-employee relationship and an amount paid to an employee
for cancellation of an employment contract and relinquishment of contract rights are wages subject to social security, Medicare, and FUTA taxes and income tax withholding. Also, compensation paid to a former employee for
services performed while still employed is wages subject
to employment taxes.
Cash wages paid to farmworkers. Cash wages that
you pay to employees for farmwork are generally subject
to social security tax and Medicare tax. You may also be
required to withhold, deposit, and report Additional Medicare Tax. See section 9 for more information. If the wages
are subject to social security and Medicare taxes, they’re
also subject to federal income tax withholding. You’re liable for the payment of these taxes to the federal govern18
ment whether or not you collect them from your employees. If, for example, you withhold less than the correct tax
from an employee’s wages, you’re still liable for the full
amount. You may also be liable for FUTA tax, which isn’t
withheld by you or paid by the employee. FUTA tax is discussed in section 14. Cash wages include checks, money
orders, and any kind of money or cash.
More information. See section 6 for a discussion of tips
and section 7 for a discussion of supplemental wages.
Also, see section 15 for exceptions to the general rules for
wages. Pub. 15-A provides additional information on wages, including nonqualified deferred compensation, and
other compensation. Pub. 15-B provides information on
other forms of compensation, including:
• Accident and health benefits,
• Achievement awards,
• Adoption assistance,
• Athletic facilities,
• De minimis (minimal) benefits,
• Dependent care assistance,
• Educational assistance,
• Employee discounts,
• Employee stock options,
• Employer-provided cell phones,
• Group-term life insurance coverage,
• Health savings accounts,
• Lodging on your business premises,
• Meals,
• No-additional-cost services,
• Retirement planning services,
• Transportation (commuting) benefits,
• Tuition reduction, and
• Working condition benefits.
Noncash wages, including commodity wages, paid to
farmworkers. Noncash wages include food, lodging,
clothing, transportation passes, farm products, or other
goods or commodities. Noncash wages paid to farmworkers, including commodity wages, aren’t subject to social
security tax, Medicare tax, or federal income tax withholding. However, you and your employee can agree to have
federal income tax withheld on noncash wages.
Noncash wages, including commodity wages, are treated as cash wages if the substance of the transaction is a
cash payment. Noncash wages treated as cash wages
are subject to social security tax, Medicare tax, and federal income tax withholding.
Report the value of noncash wages in box 1 of Form
W-2 (box 7 of Form 499R-2/W-2PR) together with cash
wages. Noncash wages for farmwork are subject to federal income tax unless a specific exclusion applies. Don’t
show noncash wages in box 3 or 5 of Form W-2 (box 20 or
22 of Form 499R-2/W-2PR), unless the substance of the
Publication 15 (2026)
transaction is a cash payment and they’re being treated as
cash wages.
Share farmers. You don’t have to withhold or pay social
security and Medicare taxes on amounts paid to share
farmers under share-farming arrangements.
A “share farmer” working for you isn’t your employee.
However, the share farmer may be subject to self-employment tax. In general, share farming is an arrangement in
which certain commodity products are shared between
the farmer and the owner (or tenant) of the land. For details, see Regulations section 31.3121(b)(16)-1.
Compensation paid to H-2A visa holders. Report
compensation of $600 or more paid in 2025 ($2,000 or
more paid in 2026) to foreign agricultural workers who entered the country on H-2A visas in box 1 of Form W-2
(box 7 of Form 499R-2/W-2PR) but don’t report it as social
security wages (box 3 of Form W-2 or box 20 of Form
499R-2/W-2PR) or Medicare wages (box 5 of Form W-2 or
box 22 of Form 499R-2/W-2PR) on Form W-2 because
compensation paid to H-2A workers for agricultural labor
performed in connection with this visa isn’t subject to social security and Medicare taxes. On Form W-2, don’t
check box 13 (Statutory employee), as H-2A workers
aren’t statutory employees.
An employer isn’t required to withhold federal income
tax from compensation paid to an H-2A worker for agricultural labor performed in connection with this visa but may
withhold if the worker asks for withholding and the employer agrees. In that case, the worker must give the employer a completed Form W-4. Federal income tax withheld should be reported in box 2 of Form W-2.
These reporting rules apply when the H-2A worker provides their TIN to the employer. If the H-2A worker doesn’t
provide a TIN and the total annual wages to the H-2A
worker are at least $600 in 2025 ($2,000 in 2026), the employer is required to backup withhold. See the Instructions
for Forms 1099-MISC and 1099-NEC and the Instructions
for Form 945.
For more information on foreign agricultural workers on
H-2A visas, go to IRS.gov/H2A.
Employee business expense reimbursements. A reimbursement or allowance arrangement is a system by
which you pay the advances, reimbursements, and
charges for your employees’ business expenses. How you
report a reimbursement or allowance amount depends on
whether you have an accountable or a nonaccountable
plan. If a single payment includes both wages and an expense reimbursement, you must specify the amount of the
reimbursement.
These rules apply to all allowable ordinary and necessary employee business expenses.
Accountable plan. To be an accountable plan, your
reimbursement or allowance arrangement must require
your employees to meet all three of the following rules.
Publication 15 (2026)
1. They must have paid or incurred allowable expenses
while performing services as your employees. The reimbursement or advance must be payment for the expenses and must not be an amount that would have
otherwise been paid to the employee as wages.
2. They must substantiate these expenses to you within
a reasonable period of time.
3. They must return any amounts in excess of substantiated expenses within a reasonable period of time.
Amounts paid under an accountable plan aren’t wages
and aren’t subject to income, social security, Medicare,
and FUTA taxes.
If the expenses covered by this arrangement aren’t substantiated (or amounts in excess of substantiated expenses aren’t returned within a reasonable period of time), the
amount paid under the arrangement in excess of the substantiated expenses is treated as paid under a nonaccountable plan. This amount is subject to income, social
security, Medicare, and FUTA taxes for the first payroll period following the end of the reasonable period of time.
A reasonable period of time depends on the facts and
circumstances. Generally, it is considered reasonable if
your employees receive their advance within 30 days of
the time they pay or incur the expenses, adequately account for the expenses within 60 days after the expenses
were paid or incurred, and return any amounts in excess
of expenses within 120 days after the expenses were paid
or incurred. Alternatively, it is considered reasonable if you
give your employees a periodic statement (at least quarterly) that asks them to either return or adequately account
for outstanding amounts and they do so within 120 days.
Nonaccountable plan. Payments to your employee
for travel and other necessary expenses of your business
under a nonaccountable plan are wages and are treated
as supplemental wages and subject to income, social security, Medicare, and FUTA taxes. Your payments are treated as paid under a nonaccountable plan if:
• Your employee isn’t required to or doesn’t substantiate
timely those expenses to you with receipts or other
documentation,
• You advance an amount to your employee for busi-
ness expenses and your employee isn’t required to or
doesn’t return timely any amount they don’t use for
business expenses,
• You advance or pay an amount to your employee regardless of whether you reasonably expect the employee to have business expenses related to your
business, or
• You pay an amount as a reimbursement you would
have otherwise paid as wages.
See section 7 for more information on supplemental
wages.
Per diem or other fixed allowance. You may reimburse your employees by travel days, miles, or some other
fixed allowance under the applicable revenue procedure.
In these cases, your employee is considered to have
accounted to you if your reimbursement doesn’t exceed
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rates established by the federal government. The standard mileage rate for auto expenses is provided in Pub.
15-B.
The government per diem rates for meals and lodging
in the continental United States can be found by going to
the U.S. General Services Administration website at
GSA.gov/PerDiemRates. Other than the amount of these
expenses, your employees’ business expenses must be
substantiated (for example, the business purpose of the
travel or the number of business miles driven). For information on substantiation methods, see Pub. 463, Travel,
Gift, and Car Expenses.
If the per diem or allowance paid exceeds the amounts
substantiated, you must report the excess amount as wages. This excess amount is subject to income tax withholding and payment of social security, Medicare, and
FUTA taxes. Show the amount equal to the substantiated
amount (that is, the nontaxable portion) in box 12 of Form
W-2 using code “L.” Employers in Puerto Rico report the
amount in box 12 (no code needed).
Wages not paid in money. If in the course of your trade
or business you pay your employees in a medium that is
neither cash nor a readily negotiable instrument, such as a
check, you’re said to pay them “in kind.” Payments in kind
may be in the form of goods, lodging, food, clothing, or
services. Generally, the FMV of such payments at the time
they’re provided is subject to federal income tax withholding and social security, Medicare, and FUTA taxes.
However, noncash payments for household work, agricultural labor, and service not in the employer’s trade or
business are exempt from social security, Medicare, and
FUTA taxes. Withhold income tax on these payments only
if you and the employee agree to do so. Nonetheless, noncash payments for agricultural labor, such as commodity
wages, are treated as cash payments subject to employment taxes if the substance of the transaction is a cash
payment. See Noncash wages, including commodity wages, paid to farmworkers, earlier in this section, for more
information.
Meals and lodging. The value of meals isn’t taxable income and isn’t subject to federal income tax withholding
and social security, Medicare, and FUTA taxes if the meals
are furnished for the employer’s convenience and on the
employer’s premises. The value of lodging isn’t subject to
federal income tax withholding and social security, Medicare, and FUTA taxes if the lodging is furnished for the
employer’s convenience, on the employer’s premises, and
as a condition of employment.
“For the convenience of the employer” means you have
a substantial business reason for providing the meals and
lodging other than to provide additional compensation to
the employee. For example, meals you provide at the
place of work so that an employee is available for emergencies during their lunch period are generally considered
to be for your convenience. You must be able to show
these emergency calls have occurred or can reasonably
be expected to occur, and that the calls have resulted, or
will result, in you calling on your employees to perform
their jobs during their meal period.
20
Whether meals or lodging is provided for the convenience of the employer depends on all of the facts and circumstances. A written statement that the meals or lodging
is for your convenience isn’t sufficient.
50% test. If over 50% of the employees who are provided meals on an employer’s business premises receive
these meals for the convenience of the employer, all
meals provided on the premises are treated as furnished
for the convenience of the employer. If this 50% test is
met, the value of the meals is excludable from income for
all employees and isn’t subject to federal income tax withholding or employment taxes. For more information, see
Pub. 15-B.
Health insurance plans. If you pay the cost of an accident or health insurance plan for your employees, including an employee’s spouse and dependents, your payments aren’t wages and aren’t subject to social security,
Medicare, and FUTA taxes, or federal income tax withholding. Generally, this exclusion also applies to qualified
long-term-care insurance contracts. However, for income
tax withholding, the value of health insurance benefits
must be included in the wages of S corporation employees who own more than 2% of the S corporation (2%
shareholders). For social security, Medicare, and FUTA
taxes, the health insurance benefits are excluded from the
2% shareholder’s wages. See Announcement 92-16 for
more information. You can find Announcement 92-16 on
page 53 of Internal Revenue Bulletin 1992-5.
Health savings accounts (HSAs) and medical savings accounts (MSAs). Your contributions to an employee’s HSA or Archer MSA aren’t subject to social security,
Medicare, or FUTA tax, or federal income tax withholding
if it is reasonable to believe at the time of payment of the
contributions they’ll be excludable from the income of the
employee. To the extent it isn’t reasonable to believe
they’ll be excludable, your contributions are subject to
these taxes. Employee contributions to their HSAs or
MSAs through a payroll deduction plan must be included
in wages and are subject to social security, Medicare, and
FUTA taxes, and federal income tax withholding. However,
HSA contributions made under a salary reduction arrangement in a section 125 cafeteria plan aren’t wages
and aren’t subject to employment taxes or withholding. For
more information, see the Instructions for Form 8889.
Medical care reimbursements. Generally, medical care
reimbursements paid for an employee under an employer’s self-insured medical reimbursement plan aren’t wages
and aren’t subject to social security, Medicare, and FUTA
taxes, or federal income tax withholding. See Pub. 15-B
for a rule regarding inclusion of certain reimbursements in
the gross income of highly compensated individuals.
Differential wage payments. Differential wage payments are any payments made by an employer to an individual for a period during which the individual is performing service in the uniformed services while on active duty
for a period of more than 30 days and represent all or a
portion of the wages the individual would have received
Publication 15 (2026)
from the employer if the individual were performing services for the employer.
Differential wage payments are wages for income tax
withholding, but aren’t subject to social security, Medicare,
or FUTA tax. Employers should report differential wage
payments in box 1 of Form W-2 (box 7 of Form 499R-2/
W-2PR). For more information about the tax treatment of
differential wage payments, see Revenue Ruling 2009-11,
2009-18
I.R.B.
896,
available
at
IRS.gov/irb/
2009-18_IRB#RR-2009-11.
the benefit is available to other employees on a nondiscriminatory basis.
• No-additional-cost services.
• Qualified employee discounts.
• Meals provided at an employer-operated eating facility.
• Reduced tuition for education.
For more information, including the definition of a highly
compensated employee, see Pub. 15-B.
Fringe benefits. You must generally include fringe benefits in an employee’s wages (but see Nontaxable fringe
benefits next). The benefits are subject to income tax withholding and employment taxes. Fringe benefits include
cars you provide, flights on aircraft you provide, free or discounted commercial flights, vacations, discounts on property or services, memberships in country clubs or other
social clubs, and tickets to entertainment or sporting
events. In general, the amount you must include is the
amount by which the FMV of the benefit is more than the
sum of what the employee paid for it plus any amount the
law excludes. There are other special rules you and your
employees may use to value certain fringe benefits. See
Pub. 15-B for more information.
When taxable fringe benefits are treated as paid.
You may choose to treat certain taxable noncash fringe
benefits as paid by the pay period, by the quarter, or on
any other basis you choose, as long as you treat the benefits as paid at least once a year. You don’t have to make a
formal choice of payment dates or notify the IRS of the
dates you choose. You don’t have to make this choice for
all employees. You may change methods as often as you
like, as long as you treat all benefits provided in a calendar
year as paid by December 31 of the calendar year. See
section 4 of Pub. 15-B for more information, including a
discussion of the special accounting rule for fringe benefits provided during November and December.
Nontaxable fringe benefits. Some fringe benefits
aren’t taxable (or are minimally taxable) if certain conditions are met. See Pub. 15-B for details. The following are
some examples of nontaxable fringe benefits.
Valuation of fringe benefits. Generally, you must determine the value of fringe benefits no later than January
31 of the next year. Before January 31, you may reasonably estimate the value of the fringe benefits for purposes
of withholding and depositing on time.
• Services provided to your employees at no additional
cost to you.
• Qualified employee discounts.
• Working condition fringes that are property or services
that would be allowable as a business expense or depreciation expense deduction to the employee if they
had paid for them. Examples include a company car
for business use and subscriptions to business magazines.
• Certain minimal value fringes (including an occasional
cab ride when an employee must work overtime and
meals you provide at eating places you run for your
employees if the meals aren’t furnished at below cost).
• Qualified transportation fringes subject to specified
conditions and dollar limitations (including transportation in a commuter highway vehicle, any transit pass,
and qualified parking).
• The use of on-premises athletic facilities operated by
you if substantially all of the use is by employees, their
spouses, and their dependent children.
• Qualified tuition reduction an educational organization
provides to its employees for education. For more information, see Pub. 970.
• Employer-provided cell phones provided primarily for
a noncompensatory business reason.
However, don’t exclude the following fringe benefits
from the wages of highly compensated employees unless
Publication 15 (2026)
Withholding federal income tax on fringe benefits.
You may add the value of fringe benefits to regular wages
for a payroll period and figure withholding taxes on the total, or you may withhold federal income tax on the value of
the fringe benefits at the optional flat 22% supplemental
wage rate. However, see Withholding on supplemental
wages when an employee receives more than $1 million of
supplemental wages during the calendar year in section 7.
You may choose not to withhold income tax on the
value of an employee’s personal use of a vehicle you provide. You must, however, withhold social security and
Medicare taxes on the use of the vehicle. See Pub. 15-B
for more information on this election.
Withholding social security and Medicare taxes on
fringe benefits. You add the value of fringe benefits to
regular wages for a payroll period and figure social security and Medicare taxes on the total.
If you withhold less than the required amount of social
security and Medicare taxes from the employee in a calendar year but report and pay the proper amount, you may
recover the taxes from the employee. See Pub. 15-B for
more information.
Depositing taxes on fringe benefits. Once you
choose when fringe benefits are paid, you must deposit
taxes in the same deposit period you treat the fringe benefits as paid. To avoid a penalty, deposit the taxes following
the general deposit rules for that deposit period.
If you determine by January 31 you overestimated the
value of a fringe benefit at the time you withheld and
21
deposited for it, you may claim a refund for the overpayment or have it applied to your next employment tax return. See Valuation of fringe benefits, earlier in this section. If you underestimated the value and deposited too
little, you may be subject to a failure-to-deposit (FTD) penalty. See section 11 for information on deposit penalties.
If you deposited the required amount of taxes but withheld a lesser amount from the employee, you can recover
from the employee the social security, Medicare, or income tax you deposited on their behalf and included in
the employee’s Form W-2. However, you must recover the
income tax before April 1 of the following year.
Back pay. Back pay, including retroactive wage increases (but not amounts paid as liquidated damages), is
taxed as ordinary wages in the year paid. For information
on reporting back pay to the SSA, see Pub. 957.
Sick pay. In general, sick pay is any amount you pay under a plan to an employee who is unable to work because
of sickness or injury. These amounts are sometimes paid
by a third party, such as an insurance company or an employees’ trust. In either case, these payments are subject
to social security, Medicare, and FUTA taxes. These taxes
don’t apply to sick pay paid more than 6 calendar months
after the last calendar month in which the employee
worked for the employer. The payments are always subject to federal income tax. See section 6 of Pub. 15-A for
more information.
Overtime compensation. The FLSA provides that employers must generally pay covered, nonexempt employees at least one-and-a-half times their regular rate of pay
for hours worked over 40 hours per week. For more information about overtime compensation, go to dol.gov/
agencies/whd/overtime.
Overtime compensation is subject to social security,
Medicare, and FUTA taxes. Overtime is also subject to
federal income tax withholding. However, for tax years beginning after 2024 and ending before 2029, P.L. 119-21 allows individuals (employees and other workers not treated
as employees) to deduct up to $12,500 ($25,000 if married filing jointly) of qualified overtime compensation on
their income tax returns. Qualified overtime is compensation that exceeds the regular rate of pay (such as the “half”
portion of time-and-a-half compensation) that is required
to be paid to an individual under section 7 of the FLSA of
1938. Employers must use an employee’s updated Form
W-4, if one is submitted by the employee, and the federal
income tax withholding procedures in Pub. 15-T to allow
the employee to account for their expected deduction and
receive more money in each paycheck instead of waiting
until filing their income tax return to receive the full benefit
of this deduction.
Identity protection services. The value of identity protection services provided by an employer to an employee
isn’t included in an employee’s gross income and doesn’t
need to be reported on an information return (such as
Form W-2) filed for an employee. This includes identity
protection services provided before a data breach occurs.
This exception doesn’t apply to cash received instead of
22
identity protection services or to proceeds received under
an identity theft insurance policy. For more information,
see Announcement 2015-22, 2015-35 I.R.B. 288, available at IRS.gov/irb/2015-35_IRB#ANN-2015-22; and Announcement 2016-02, 2016-3 I.R.B. 283, available at
IRS.gov/irb/2016-03_IRB#ANN-2016-02.
6. Tips
Cash tips your employee receives from customers are
generally subject to withholding. Your employee must report cash tips to you by the 10th of the month after the
month the tips are received. Cash tips include tips paid by
cash, check, debit card, and credit card. The report
should include tips you paid over to the employee for
charge customers, tips the employee received directly
from customers, and tips received from other employees
under any tip-sharing arrangement. Both directly and indirectly tipped employees must report tips to you. No report
is required for months when tips are less than $20. If you
don’t give your employees any specific method to report
tips (for example, an electronic tip reporting system), your
employees must give you a statement reporting their tips.
The statement must be signed and dated by the employee
and must include:
• The employee’s name, address, and SSN;
• Your name and address;
• The month and year (or the beginning and ending
dates, if the statement is for a period of less than 1
calendar month) the report covers; and
• The total of tips received during the month or period.
You’re permitted to establish a system for electronic tip
reporting by employees. See Regulations section
31.6053-1(d). You may also suggest that your employees
see Pub. 531, Reporting Tip Income.
Collecting taxes on tips. You must collect federal income tax (see Federal income tax withholding on tips,
later), employee social security tax, and employee Medicare tax on the employee’s tips. The withholding rules for
withholding an employee’s share of Medicare tax on tips
also apply to withholding the Additional Medicare Tax
once wages and tips exceed $200,000 in the calendar
year.
You can collect these taxes from the employee’s wages
(excluding tips) or from other funds they make available.
See Tips are treated as supplemental wages in section 7
for more information. Stop collecting the employee share
of social security tax when their wages and tips for tax
year 2026 reach $184,500; collect the income and employee Medicare taxes for the whole year on all wages and
tips. You’re responsible for the employer social security tax
on wages and tips until the wages (including tips) reach
the limit. You’re responsible for the employer Medicare tax
for the whole year on all wages and tips. Tips are considered to be paid at the time the employee reports them to
you. Deposit taxes on tips based on your deposit schedule
Publication 15 (2026)
as described in section 11. File Form 941 or Form 944 to
report withholding and employment taxes on tips.
Ordering rule. If, by the 10th of the month after the
month for which you received an employee’s report on
tips, you don’t have enough employee funds available to
deduct the employee tax, you no longer have to collect it.
If there aren’t enough funds available, withhold taxes in
the following order.
1. Withhold on regular wages and other compensation.
2. Withhold social security and Medicare taxes on tips.
3. Withhold income tax on tips.
Federal income tax withholding on tips. For tax
years beginning after 2024 and ending before 2029, P.L.
119-21 allows employees and self-employed individuals to
deduct up to $25,000 of qualified tips received in occupations that customarily and regularly received tips on or before December 31, 2024, on their income tax returns.
Qualified tips are cash tips, which include voluntary cash
or charged tips received from customers or, in the case of
employees, through tip-sharing arrangements. Mandatory
service charges added to the bill are not qualified tips.
Employers must use an employee’s updated Form W-4,
if one is submitted by the employee, and the federal income tax withholding procedures in Pub. 15-T to allow the
employee to account for their expected deduction and receive more money in each paycheck instead of waiting until filing their income tax return to receive the full benefit of
this deduction.
Reporting tips. Report tips and any collected and uncollected social security and Medicare taxes on Form W-2
(Form 499R-2/W-2PR for employers in Puerto Rico) and
on Form 941, lines 5b, 5c, and, if applicable, 5d (Form
944, lines 4b, 4c, and, if applicable, 4d). Report a negative
adjustment on Form 941, line 9 (Form 944, line 6), for the
uncollected social security and Medicare taxes. Enter the
amount of uncollected social security tax and Medicare
tax in box 12 of Form W-2 with codes “A” and “B,” respectively. On Form 499R-2/W-2PR, enter the amount of uncollected social security and Medicare taxes in boxes 25
and 26, respectively. Don’t include any uncollected Additional Medicare Tax in box 12 of Form W-2. For additional
information on reporting tips, see section 13 and the General Instructions for Forms W-2 and W-3. Employers in Puerto Rico, see the General Instructions for Forms W-3
(PR) and W-3C (PR).
Revenue Ruling 2012-18 provides guidance for employers regarding social security and Medicare taxes imposed on tips, including information on the reporting of the
employer share of social security and Medicare taxes under section 3121(q), the difference between tips and service charges, and the section 45B credit. See Revenue
Ruling 2012-18, 2012-26 I.R.B. 1032, available at
IRS.gov/irb/2012-26_IRB#RR-2012-18.
FUTA tax on tips. If an employee reports to you in writing $20 or more of tips in a month, the tips are also subject
to FUTA tax.
Publication 15 (2026)
Allocated tips. If you operate a large food or beverage
establishment, you must report allocated tips under certain circumstances. However, don’t withhold income, social security, or Medicare tax on allocated tips.
A large food or beverage establishment is one that is located in the 50 states or the District of Columbia, provides
food or beverages for consumption on the premises,
where tipping is customary, and where there were normally more than 10 employees on a typical business day
during the preceding year.
The tips may be allocated by one of three methods—hours worked, gross receipts, or good-faith agreement. For information about these allocation methods, and
for information about required electronic filing of Form
8027, see the Instructions for Form 8027. For more information on filing Form 8027 electronically with the IRS, see
Pub. 1239.
Tip Rate Determination and Education Program. Employers may participate in the Tip Rate Determination and
Education Program. The program primarily consists of two
voluntary agreements developed to improve tip income reporting by helping taxpayers to understand and meet their
tip reporting responsibilities. The two agreements are the
Tip Rate Determination Agreement (TRDA) and the Tip
Reporting Alternative Commitment (TRAC). A tip agreement, the Gaming Industry Tip Compliance Agreement
(GITCA), is available for the gaming (casino) industry. For
more information, see Pub. 3144.
More information. Advise your employees to see Pub.
531 or use the IRS Interactive Tax Assistant at IRS.gov/
TipIncome for help in determining if their tip income is taxable and for information about how to report tip income.
7. Supplemental Wages
Caution: References to federal income tax withholding don’t apply to employers in American Samoa, Guam,
the CNMI, the USVI, and Puerto Rico, unless you have
employees who are subject to U.S. income tax withholding. Contact your local tax department for information
about income tax withholding.
Supplemental wages are wage payments to an employee that aren’t regular wages. They include, but aren’t
limited to, bonuses, commissions, overtime pay (see
Overtime compensation in section 5), payments for accumulated sick leave, severance pay, awards, prizes, back
pay, reported tips (see Federal income tax withholding on
tips in section 6), retroactive pay increases, and payments
for nondeductible moving expenses. However, employers
have the option to treat overtime pay and tips as regular
wages instead of supplemental wages. Other payments
subject to the supplemental wage rules include taxable
fringe benefits and expense allowances paid under a nonaccountable plan. How you withhold on supplemental wages depends on whether the supplemental payment is
identified as a separate payment from regular wages. See
Regulations section 31.3402(g)-1 for additional guidance.
23
Also see Revenue Ruling 2008-29, 2008-24 I.R.B. 1149,
available at IRS.gov/irb/2008-24_IRB#RR-2008-29.
Withholding on supplemental wages when an employee receives more than $1 million of supplemental wages from you during the calendar year. Special
rules apply to the extent supplemental wages paid to any
one employee during the calendar year exceed $1 million.
If a supplemental wage payment, together with other supplemental wage payments made to the employee during
the calendar year, exceeds $1 million, the excess is subject to withholding at 37% (or the highest rate of income
tax for the year). Withhold using the 37% rate without regard to the employee’s Form W-4. In determining supplemental wages paid to the employee during the year, include payments from all businesses under common
control. For more information, see Treasury Decision
9276, 2006-37 I.R.B. 423, available at IRS.gov/irb/
2006-37_IRB#TD-9276.
Withholding on supplemental wage payments to an
employee who doesn’t receive $1 million of supplemental wages during the calendar year. If the supplemental wages paid to the employee during the calendar
year are less than or equal to $1 million, the following rules
apply in determining the amount of income tax to be withheld.
Supplemental wages combined with regular wages.
If you pay supplemental wages with regular wages but
don’t specify the amount of each, withhold federal income
tax as if the total were a single payment for a regular payroll period.
Supplemental wages identified separately from regular wages. If you pay supplemental wages separately (or
combine them in a single payment and specify the amount
of each), the federal income tax withholding method depends partly on whether you withhold income tax from
your employee’s regular wages.
1. If you withheld income tax from an employee’s regular
wages in the current or immediately preceding calendar year, you can use one of the following methods for
the supplemental wages.
a. Withhold a flat 22% (no other percentage allowed).
b. If the supplemental wages are paid concurrently
with regular wages, add the supplemental wages
to the concurrently paid regular wages and withhold federal income tax as if the total were a single
payment for a regular payroll period. If there are no
concurrently paid regular wages, add the supplemental wages to, alternatively, either the regular
wages paid or to be paid for the current payroll period or the regular wages paid for the preceding
payroll period. Figure the income tax withholding
as if the total of the regular wages and supplemental wages is a single payment. Subtract the tax already withheld or to be withheld from the regular
wages. Withhold the remaining tax from the supplemental wages. If there were other payments of
24
supplemental wages paid during the payroll period
made before the current payment of supplemental
wages, aggregate all the payments of supplemental wages paid during the payroll period with the
regular wages paid during the payroll period, figure the tax on the total, subtract the tax already
withheld from the regular wages and the previous
supplemental wage payments, and withhold the
remaining tax.
2. If you didn’t withhold income tax from the employee’s
regular wages in the current or immediately preceding
calendar year, use method 1b.
Regardless of the method you use to withhold income tax
on supplemental wages, they’re subject to social security,
Medicare, and FUTA taxes.
Example 1. You pay John Peters a base salary on the
first of each month. John’s most recent Form W-4 is from
2018, and John is single, claims one withholding allowance, and didn’t enter an amount for additional withholding on Form W-4. In January, John is paid $1,000. You decide to use the Wage Bracket Method of withholding.
Using Worksheet 3 and the withholding tables in section 3
of Pub. 15-T, you withhold $2 from this amount. In February, John receives salary of $1,000 plus a commission of
$500, which you combine with regular wages and don’t
separately identify. You figure the withholding based on
the total of $1,500. The correct withholding from the tables
is $53.
Example 2. You pay Sharon Warren a base salary on
the first of each month. Sharon submitted a 2026 Form
W-4 and checked the box for Single or Married filing separately. Sharon didn’t complete Steps 2, 3, and 4 on Form
W-4. Sharon’s May 1 pay is $2,000. You decide to use the
Wage Bracket Method of withholding. Using Worksheet 2
and the withholding tables in section 2 of Pub. 15-T, you
withhold $65. On May 15, Sharon receives a bonus of
$1,000. Electing to use supplemental wage withholding
method 1b, you do the following.
1. Add the bonus amount to the amount of wages from
the most recent base salary pay date (May 1) ($2,000
+ $1,000 = $3,000).
2. Determine the amount of withholding on the combined $3,000 amount to be $179 using the wage
bracket tables.
3. Subtract the amount withheld from wages on the most
recent base salary pay date (May 1) from the combined withholding amount ($179 – $65 = $114).
4. Withhold $114 from the bonus payment.
Example 3. The facts are the same as in Example 2,
except you elect to use the flat rate method of withholding
on the bonus. You withhold 22% of $1,000, or $220, from
Sharon’s bonus payment.
Example 4. The facts are the same as in Example 2,
except you elect to pay Sharon a second bonus of $2,000
Publication 15 (2026)
on May 29. Using supplemental wage withholding method
1b, you do the following.
sions paid on completion of a sale), count back the number of days from the payment period to the latest of:
1. Add the first and second bonus amounts to the
amount of wages from the most recent base salary
pay date (May 1) ($2,000 + $1,000 + $2,000 =
$5,000).
• The last wage payment made during the same calen-
2. Determine the amount of withholding on the combined $5,000 amount to be $419 using the wage
bracket tables.
• January 1 of the same year.
3. Subtract the amounts withheld from wages on the
most recent base salary pay date (May 1) and the
amounts withheld from the first bonus payment from
the combined withholding amount ($419 – $65 – $114
= $240).
4. Withhold $240 from the second bonus payment.
Tips are treated as supplemental wages. Withhold income tax on tips from wages earned by the employee or
from other funds the employee makes available (see Federal income tax withholding on tips in section 6). Don’t
withhold the income tax due on tips from employee tips. If
an employee receives regular wages and reports tips, figure income tax withholding as if the tips were supplemental wages. If you withheld income tax from the regular wages in the current or immediately preceding calendar year,
you can withhold on the tips by method 1a or 1b discussed earlier in this section under Supplemental wages
identified separately from regular wages. If you didn’t withhold income tax from the regular wages in the current or
immediately preceding calendar year, add the tips to the
regular wages and withhold income tax on the total by
method 1b discussed earlier. Employers also have the option to treat tips as regular wages rather than supplemental wages. Service charges aren’t tips; therefore, withhold
taxes on service charges as you would on regular wages.
Vacation pay. Vacation pay is subject to withholding as if
it were a regular wage payment. When vacation pay is in
addition to regular wages for the vacation period (for example, an annual lump-sum payment for unused vacation
leave), treat it as a supplemental wage payment. If the vacation pay is for a time longer than your usual payroll period, spread it over the pay periods for which you pay it.
8. Payroll Period
Your payroll period is a period of service for which you
usually pay wages. When you have a regular payroll period, withhold income tax for that time period even if your
employee doesn’t work the full period.
No regular payroll period. When you don’t have a regular payroll period, withhold the tax as if you paid wages
for a daily or miscellaneous payroll period. Figure the
number of days (including Sundays and holidays) in the
period covered by the wage payment. If the wages are unrelated to a specific length of time (for example, commis-
Publication 15 (2026)
dar year;
• The date employment began, if during the same calendar year; or
Employee paid for period less than 1 week. When
you pay an employee for a period of less than 1 week, and
the employee signs a statement under penalties of perjury
indicating they aren’t working for any other employer during the same week for wages subject to withholding, figure
withholding based on a weekly payroll period. If the employee later begins to work for another employer for wages
subject to withholding, the employee must notify you
within 10 days. You then figure withholding based on the
daily or miscellaneous period.
9. Withholding From
Employees’ Wages
Caution: References to federal income tax withholding
don’t apply to employers in American Samoa, Guam, the
CNMI, the USVI, and Puerto Rico, unless you have employees who are subject to U.S. income tax withholding.
Contact your local tax department for information about income tax withholding.
Federal Income Tax Withholding
Redesigned Form W-4. The IRS redesigned Form W-4
for 2020 and subsequent years. Before 2020, the value of
a withholding allowance was tied to the amount of the personal exemption. Due to changes in the law, taxpayers
can no longer claim personal exemptions or dependency
exemptions; therefore, Form W-4 no longer asks an employee to report the number of withholding allowances that
they are claiming. The revised Form W-4 is divided into
five steps. Step 1 and Step 5 apply to all employees. In
Step 1, employees enter personal information like their
name and filing status. In Step 5, employees sign the
form. Employees who complete only Step 1 and Step 5
will have their withholding figured based on their filing status’s standard deduction and tax rates with no other adjustments. If applicable, in Step 2, employees increase
their withholding to account for higher tax rates due to income from other jobs in their household. Under Step 2,
employees either enter an additional amount to withhold
per payroll period in Step 4(c) or check the box in Step
2(c) for higher withholding rate tables to apply to their wages. In Step 3, employees decrease their withholding by
reporting the annual amount of any credits they will claim
on their income tax return. In Step 4, employees may increase or decrease their withholding based on the annual
amount of other income or deductions they will report on
25
their income tax return and they may also request any additional federal income tax they want withheld each pay
period.
An employee who submitted Form W-4 in any year before 2020 isn’t required to submit a new form merely because of the redesign. Employers will continue to figure
withholding based on the information from the employee’s
most recently submitted Form W-4. The withholding tables
in Pub. 15-T allow employers to figure withholding based
on a Form W-4 for 2019 or earlier, as well as the redesigned Form W-4. While you may ask your employee who
was first paid wages before 2020 who hasn’t yet submitted
a redesigned Form W-4 to submit a new Form W-4 using
the redesigned version of the form, you should explain to
them that they’re not required to do this and if they don’t
submit a new Form W-4, withholding will continue based
on a valid Form W-4 previously submitted. All newly hired
employees must use the redesigned form. Similarly, any
other employees who wish to adjust their withholding must
use the redesigned form.
Pub. 15-T provides an optional computational bridge to
treat 2019 and earlier Forms W-4 as if they were 2020 or
later Forms W-4 for purposes of figuring federal income
tax withholding. This computational bridge allows you to
use computational procedures and data fields for a 2020
and later Form W-4 to arrive at the equivalent withholding
for an employee that would have applied using the computational procedures and data fields on a 2019 or earlier
Form W-4. See How To Treat 2019 and Earlier Forms W-4
as if They Were 2020 or Later Forms W-4 under Introduction in Pub. 15-T.
More information. For more information about the redesigned Form W-4 and regulations that provide guidance
for employers concerning income tax withholding from
employees’ wages, see Treasury Decision 9924, 2020-44
I.R.B. 943, available at IRS.gov/irb/2020-44_IRB#TD9924. For information about Form W-4, go to IRS.gov/
FormW4. Employer instructions on how to figure employee withholding are provided in Pub. 15-T, available at
IRS.gov/Pub15T.
Tip: Farm operators and crew leaders must withhold
federal income tax from the wages of farmworkers if the
wages are subject to social security and Medicare taxes.
Using Form W-4 to figure withholding. To know how
much federal income tax to withhold from employees’ wages, you should have a Form W-4 on file for each employee. Encourage your employees to file an updated
Form W-4 for 2026, especially if they owed taxes or received a large refund when filing their 2025 tax return.
Ask all new employees to give you a signed Form W-4
when they start work. Make the form effective with the first
wage payment. If a new employee doesn’t give you a completed Form W-4 in 2026 (including an employee who previously worked for you and was rehired in 2026, and who
fails to furnish a Form W-4), treat the new employee as if
they had checked the box for Single or Married filing separately in Step 1(c) and made no entries in Step 2, Step 3,
or Step 4 of the 2026 Form W-4. An employee who was
paid wages before 2020 and who failed to furnish a Form
26
W-4 should continue to be treated as single and claiming
zero allowances on a 2019 Form W-4. If you use the optional computational bridge, described earlier under Redesigned Form W-4, you may treat this employee as if they
had checked the box for Single or Married filing separately
in Step 1(c), and made no entries in Step 2 and Step 3, an
entry of $8,600 in Step 4(a), and an entry of zero in Step
4(b) of the 2026 Form W-4.
Electronic system to receive Form W-4. You may
establish a system to electronically receive Forms W-4
from your employees. See Regulations section 31.3402(f)
(5)-1(c) and Pub. 15-T for more information.
Effective date of Form W-4. A Form W-4 for 2025 or
earlier years remains in effect for 2026 unless the employee gives you a 2026 Form W-4. When you receive a
new Form W-4 from an employee, don’t adjust withholding
for pay periods before the effective date of the new form. If
an employee gives you a Form W-4 that replaces an existing Form W-4, begin withholding no later than the start of
the first payroll period ending on or after the 30th day from
the date when you received the replacement Form W-4.
For exceptions, see Exemption from federal income tax
withholding, IRS review of requested Forms W-4, and Invalid Forms W-4, later in this section.
Caution: A Form W-4 that makes a change for the
next calendar year won’t take effect in the current calendar
year.
Successor employer. If you’re a successor employer
(see Successor employer, later in this section), secure
new Forms W-4 from the transferred employees unless
the “Alternative Procedure” in section 5 of Revenue Procedure 2004-53 applies. See Revenue Procedure 2004-53,
2004-34
I.R.B.
320,
available
at
IRS.gov/irb/
2004-34_IRB#RP-2004-53.
IRS Tax Withholding Estimator for employees. You
may advise your employees to use the IRS Tax Withholding Estimator available at IRS.gov/W4App for help in determining how to complete their Forms W-4. An employee
that makes a mid-year change to their withholding after
using the IRS Tax Withholding Estimator may be underwithheld or overwithheld once their Form W-4 is applied to
the next full calendar year. Therefore, you should remind
employees that made a mid-year change to revisit the IRS
Tax Withholding Estimator in early January and submit a
new Form W-4 for the year.
Completing Form W-4. The amount of any federal income tax withholding must be based on filing status, income (including income from other jobs), deductions, and
credits. Your employees may not base their withholding
amounts on a fixed dollar amount or percentage. However, an employee may specify a dollar amount to be withheld each pay period in addition to the amount of withholding based on filing status and other information
reported on Form W-4.
Employees that are married filing jointly and have spouses that also currently work, or employees that hold more
than one job at the same time, should account for their
Publication 15 (2026)
higher tax rate by completing Step 2 of their 2026 Form
W-4. Employees also have the option to report on their
2026 Form W-4 other income they will receive that isn’t
subject to withholding and other deductions they will claim
in order to increase the accuracy of their federal income
tax withholding.
See Pub. 505 for more information about completing
Form W-4. Along with Form W-4, you may wish to order
Pub. 505 for use by your employees.
Don’t accept any withholding or estimated tax payments from your employees in addition to withholding
based on their Form W-4. If they require additional withholding, they should submit a new Form W-4 and, if necessary, pay estimated tax by filing Form 1040-ES or by
making an electronic payment of estimated taxes. Employees who receive tips may provide funds to their employer for withholding on tips; see Collecting taxes on tips
in section 6.
Exemption from federal income tax withholding.
Generally, an employee may claim exemption from federal
income tax withholding because they had no income tax
liability last year and expect none this year. See the Form
W-4 instructions for more information. However, the wages are still subject to social security and Medicare taxes.
See also Invalid Forms W-4, later in this section.
A Form W-4 claiming exemption from withholding is effective when it is given to the employer and only for that
calendar year. To continue to be exempt from withholding,
an employee must give you a new Form W-4 by February
15. If the employee doesn’t give you a new Form W-4 by
February 15, begin withholding as if they had checked the
box for Single or Married filing separately in Step 1(c) and
made no entries in Step 2, Step 3, or Step 4 of the 2026
Form W-4. If the employee provides a new Form W-4
claiming exemption from withholding on February 16 or
later, you may apply it to future wages but don’t refund any
taxes withheld while the exempt status wasn’t in place.
Withholding federal income taxes on the wages of
nonresident alien employees. In general, you must
withhold federal income taxes on the wages of nonresident alien employees. However, see Pub. 515 for exceptions to this general rule. See section 5 for more guidance
on H-2A visa workers.
Withholding adjustment for nonresident alien employees. Nonresident aliens may not claim the standard
deduction on their tax returns; therefore, employers must
add an amount to the wages of nonresident alien employees performing services within the United States in order
to figure the amount of federal income tax to withhold from
their wages. The amount is added to their wages solely for
calculating federal income tax withholding. The amount
isn’t included in any box on the employee’s Form W-2 and
doesn’t increase the income tax liability of the employee.
The amount also doesn’t increase the social security tax
or Medicare tax liability of the employer or the employee,
or the FUTA tax liability of the employer. See Withholding
Adjustment for Nonresident Alien Employees under Introduction in Pub. 15-T for the amount to add to their wages
for the payroll period.
Publication 15 (2026)
Supplemental wage payment. The adjustment for
determining the amount of income tax withholding for nonresident alien employees doesn’t apply to a supplemental
wage payment (see section 7) if the 37% mandatory flat
rate withholding applies or if the 22% optional flat rate
withholding is being used to calculate income tax withholding on the supplemental wage payment.
Nonresident alien employee’s Form W-4. When completing Forms W-4, nonresident aliens are required to:
• Not claim exemption from income tax withholding
(even if they meet both of the conditions to claim exemption from withholding listed in the Form W-4 instructions);
• Request withholding as if they’re single, regardless of
their actual filing status;
• Not claim the child tax credit or credit for other de-
pendents in Step 3 of Form W-4 (if the nonresident
alien is a resident of Canada, Mexico, or South Korea,
or a student from India, or a business apprentice from
India, they may claim, under certain circumstances
(see Pub. 519, U.S. Tax Guide for Aliens), the child tax
credit or credit for other dependents); and
• Write “Nonresident Alien” or “NRA” in the space below
Step 4(c) of Form W-4.
If you maintain an electronic Form W-4 system, you
should provide a field for nonresident aliens to enter nonresident alien status instead of writing “Nonresident Alien”
or “NRA” in the space below Step 4(c) of Form W-4. You
should instruct nonresident aliens to see Notice 1392,
Supplemental Form W-4 Instructions for Nonresident Aliens, before completing Form W-4.
Form 8233. If a nonresident alien employee claims a
tax treaty exemption from withholding, the employee must
submit Form 8233 with respect to the income exempt under the treaty, instead of Form W-4. For more information,
see the Instructions for Form 8233 and Pay for Personal
Services Performed under Withholding on Specific Income in Pub. 515.
IRS review of requested Forms W-4. When requested
by the IRS, you must make original Forms W-4 available
for inspection by an IRS employee. You may also be directed to send certain Forms W-4 to the IRS. You may receive
a notice from the IRS requiring you to submit a copy of
Form W-4 for one or more of your named employees.
Send the requested copy or copies of Form W-4 to the
IRS at the address provided and in the manner directed by
the notice. The IRS may also require you to submit copies
of Form W-4 to the IRS as directed by a revenue procedure or notice published in the Internal Revenue Bulletin.
After submitting a copy of a requested Form W-4 to the
IRS, continue to withhold federal income tax based on that
Form W-4 if it is valid (see Invalid Forms W-4, later in this
section). However, if the IRS later notifies you in writing
that the employee isn’t entitled to claim exemption from
withholding or a claimed amount of deductions or credits,
withhold federal income tax based on the effective date,
employee’s permitted filing status, and withholding
27
instructions specified in the IRS notice (commonly referred to as a “lock-in letter”).
Initial lock-in letter. The IRS uses information reported on Form W-2 to identify employees with withholding
compliance problems. In some cases, if a serious underwithholding problem is found to exist for a particular employee, the IRS may issue a lock-in letter to the employer
specifying the employee’s permitted filing status and providing withholding instructions for the specific employee.
You’ll also receive a copy for the employee that identifies
the permitted filing status and provides a description of
the withholding instructions you’re required to follow and
the process by which the employee can provide additional
information to the IRS for purposes of determining the appropriate withholding and/or modifying the specified filing
status. You must furnish the employee copy to the employee within 10 business days of receipt if the employee
is employed by you as of the date of the notice. You may
follow any reasonable business practice to furnish the employee copy to the employee. Begin withholding based on
the notice on the date specified in the notice.
Implementation of lock-in letter. When you receive
the notice specifying the permitted filing status and providing withholding instructions, you may not withhold immediately on the basis of the notice. You must begin withholding tax on the basis of the notice for any wages paid after
the date specified in the notice. The delay between your
receipt of the notice and the date to begin the withholding
on the basis of the notice permits the employee time to
contact the IRS.
Seasonal employees and employees not currently
performing services. If you receive a notice for an employee who isn’t currently performing services for you,
you’re still required to furnish the employee copy to the
employee and withhold based on the notice if any of the
following apply.
• You’re paying wages for the employee’s prior services
and the wages are subject to income tax withholding
on or after the date specified in the notice.
• You reasonably expect the employee to resume services within 12 months of the date of the notice.
• The employee is on a leave of absence that doesn’t
exceed 12 months or the employee has a right to reemployment after the leave of absence.
Termination and rehire of employees. If you must
furnish and withhold based on the notice and the employment relationship is terminated after the date of the notice,
you must continue to withhold based on the notice if you
continue to pay any wages subject to income tax withholding. You must also withhold based on the notice or modification notice (explained next) if the employee resumes the
employment relationship with you within 12 months after
the termination of the employment relationship.
Modification notice. After issuing the notice specifying the permitted filing status and providing withholding instructions, the IRS may issue a subsequent notice (modification notice) that modifies the original notice. The
28
modification notice may change the permitted filing status
and withholding instructions. You must withhold federal income tax based on the effective date specified in the modification notice.
New Form W-4 after IRS notice. After the IRS issues
a notice or modification notice, if the employee provides
you with a new Form W-4 claiming complete exemption
from withholding or a completed Form W-4 that results in
less withholding than would result under the IRS notice or
modification notice, disregard the new Form W-4. You
must withhold based on the notice or modification notice
unless the IRS notifies you to withhold based on the new
Form W-4. If the employee wants to put a new Form W-4
into effect that results in less withholding than required,
the employee must contact the IRS.
If, after you receive an IRS notice or modification notice,
your employee gives you a new completed Form W-4 that
results in more withholding than would result under the notice or modification notice, you must withhold tax based
on the new Form W-4. Otherwise, disregard any subsequent Forms W-4 provided by the employee and withhold
based on the IRS notice or modification notice.
Caution: If, in a year before 2020, you received a
lock-in letter for an employee, then for 2026 you should
continue to follow the instructions in the lock-in letter. You
will use the withholding methods described in Pub. 15-T
for an employee with a Form W-4 from 2019 or earlier, or
you may use the optional computational bridge to treat
2019 and earlier Forms W-4 as if they were 2020 or later
Forms W-4 for purposes of figuring federal income tax
withholding. See How To Treat 2019 and Earlier Forms
W-4 as if They Were 2020 or Later Forms W-4 under Introduction in Pub. 15-T. You should continue following the instructions in the pre-2020 lock-in letter until you receive a
letter releasing your employee from the lock-in procedures, you receive a modification notice, or your employee
gives you a new Form W-4 that results in more withholding
than would result under the notice.
For additional information about employer withholding
compliance, see IRS.gov/WHC.
Substitute Forms W-4. You’re encouraged to have your
employees use the official version of Form W-4. You may
use a substitute version of Form W-4 to meet your business needs. However, your substitute Form W-4 must
contain language that is identical to the official Form W-4
and your form must meet all current IRS rules for substitute forms. At the time you provide your substitute form to
the employee, you must provide them with all tables, instructions, and worksheets from the current Form W-4. For
more information, see Pub. 15-T.
You can’t accept substitute Forms W-4 developed by
employees. An employee who submits an employee-developed substitute Form W-4 after October 10, 2007, will
be treated as failing to furnish a Form W-4. However, continue to honor any valid employee-developed Forms W-4
you accepted before October 11, 2007.
Invalid Forms W-4. Any unauthorized change or addition
to Form W-4 makes it invalid. This includes taking out any
Publication 15 (2026)
language by which the employee certifies the form is correct. A Form W-4 is also invalid if, by the date an employee gives it to you, they clearly indicate it is false. An
employee who submits a false Form W-4 may be subject
to a $500 penalty. You may treat a Form W-4 as invalid if
the employee wrote “exempt” below Step 4(c) and
checked the box in Step 2(c) or entered numbers for
Steps 3 and 4.
When you get an invalid Form W-4, don’t use it to figure
federal income tax withholding. Tell the employee it is invalid and ask for another one. If the employee doesn’t give
you a valid one, and you have an earlier Form W-4 for this
employee that is valid, withhold as you did before. If you
don’t have an earlier Form W-4 that is valid, withhold tax
as if the employee had checked the box for Single or Married filing separately in Step 1(c) and made no entries in
Step 2, Step 3, or Step 4 of the 2026 Form W-4. However,
an employee who was paid wages in 2019 who never submitted a valid Form W-4 and submits an invalid Form W-4
in 2026 should continue to be treated as single and claiming zero allowances on a 2019 Form W-4. If you use the
optional computational bridge, described earlier under Redesigned Form W-4, you may treat this employee as if
they had checked the box for Single or Married filing separately in Step 1(c), and made no entries in Step 2 and
Step 3, an entry of $8,600 in Step 4(a), and an entry of
zero in Step 4(b) of the 2026 Form W-4.
Amounts exempt from levy on wages, salary, and
other income. If you receive a Notice of Levy on Wages,
Salary, and Other Income (a notice in the Form 668 series), you must withhold amounts as described in the instructions for these forms. Pub. 1494 has tables to figure
the amount exempt from levy. If a levy issued in a prior
year is still in effect and the taxpayer submits a new Statement of Exemptions and Filing Status, use the current
year Pub. 1494 to figure the exempt amount.
Social Security and Medicare Taxes
The Federal Insurance Contributions Act (FICA) provides
for a federal system of old-age, survivors, disability, and
hospital insurance. The old-age, survivors, and disability
insurance part is financed by the social security tax. The
hospital insurance part is financed by the Medicare tax.
Each of these taxes is reported separately.
Generally, you’re required to withhold social security
and Medicare taxes from your employees’ wages and pay
the employer share of these taxes. Certain types of wages
and compensation aren’t subject to social security and
Medicare taxes. See section 5 and section 15 for details.
Generally, employee wages are subject to social security
and Medicare taxes regardless of the employee’s age or
whether they are receiving social security benefits. If the
employee reported tips, see section 6.
The $150 test or the $2,500 test for farmwork. All
cash wages that you pay to an employee during the year
for farmwork are subject to social security and Medicare
taxes and federal income tax withholding if either of the
two tests below is met.
• You pay cash wages to an employee of $150 or more
in a year for farmwork (count all cash wages paid on a
time, piecework, or other basis). The $150 test applies
separately to each farmworker that you employ. If you
employ a family of workers, each member is treated
separately. Don’t count wages paid by other employers.
• The total that you pay for farmwork (cash and non-
cash) to all your employees is $2,500 or more during
the year.
Exceptions. Annual cash wages of less than $150
you pay to a seasonal farmworker aren’t subject to social
security and Medicare taxes, or federal income tax withholding, even if you pay $2,500 or more to all your farmworkers. However, these wages count toward the $2,500
test for determining whether other farmworkers’ wages are
subject to social security and Medicare taxes.
A seasonal farmworker is a worker who:
• Is employed in agriculture as a hand-harvest laborer,
• Is paid piece rates in an operation that is usually paid
on a piece-rate basis in the region of employment,
• Commutes daily from their permanent home to the
farm, and
• Had been employed in agriculture less than 13 weeks
in the preceding calendar year.
Wages paid to a child under 18 working on a farm that
is a sole proprietorship or a partnership in which each
partner is a parent of a child aren’t subject to social security and Medicare taxes. However, these wages count toward the $2,500 test for determining whether other farmworkers’ wages are subject to social security and
Medicare taxes.
Deducting the tax. Deduct the employee tax from
each wage payment. If you’re not sure that the wages that
you pay to a farmworker during the year will be taxable,
you may either deduct the tax when you make the payments or wait until the $2,500 test or the $150 test discussed earlier has been met.
Tax rates and the social security wage base limit. Social security and Medicare taxes have different rates and
only the social security tax has a wage base limit. The
wage base limit is the maximum wage subject to the tax
for the year. Determine the amount of withholding for social security and Medicare taxes by multiplying each payment by the employee tax rate.
For 2026, the social security tax rate is 6.2% (amount
withheld) each for the employer and employee (12.4% total). The social security wage base limit is $184,500. The
tax rate for Medicare is 1.45% (amount withheld) each for
the employee and employer (2.9% total). There is no wage
base limit for Medicare tax; all covered wages are subject
to Medicare tax.
Additional Medicare Tax withholding. In addition to
withholding Medicare tax at 1.45%, you must withhold a
Publication 15 (2026)
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0.9% Additional Medicare Tax from wages you pay to an
employee in excess of $200,000 in a calendar year. You’re
required to begin withholding Additional Medicare Tax in
the pay period in which you pay wages in excess of
$200,000 to an employee and continue to withhold it each
pay period until the end of the calendar year. Additional
Medicare Tax is only imposed on the employee. There is
no employer share of Additional Medicare Tax. All wages
that are subject to Medicare tax are subject to Additional
Medicare Tax withholding if paid in excess of the $200,000
withholding threshold.
For more information on what wages are sub
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