Payroll Taxes – Withholding
Federal Tax Course – Lesson 16

Introduction 1601
Why Withholding? 1602
Who is Required to Withhold 1603
What Wages are Subject to Withholding 1604
Board and Lodging Furnished to Employees 1605
Employees Exempt from Withholding 1606
The Withholding Allowance Certificate 1607
Additional Withholding Allowances for Credits and Deductions 1608
Withholding on Pension and Annuity Payments 1609
Withholding on Sick Pay 1610
Withholding on Tips 1611
Individuals Exempt from Withholding 1612
Computing the Amount to be Withheld 1613
Supplemental Wage Payments 1614
Returns and Payments of the Tax 1615
Form W-2 1616
Form W-4 Submission Sometimes Required 1617


Payroll Tax Withholding:

In the previous assignments we dealt with those provisions of the Federal Income Tax law which affect the personal tax liability of the various taxpayers.

But, as you are no doubt aware, individuals or business firms who are employers have additional obligations and pay additional taxes under the Federal tax laws. These obligations and taxes are commonly referred to as “Payroll Taxes”.

The Federal payroll tax provisions may be conveniently divided into two groups:

  1. The Withholding Tax provisions under which the employer is required to withhold Federal income tax from the employees’ salaries and wages, and periodically remit the amount withheld to the Treasury.
  2. The Federal Insurance Contributions Act (FICA) and the Federal Unemployment Tax Act (FUTA) provisions under the Social Security laws.

In this assignment we will discuss the Withholding Tax laws and regulations; the Social Security tax laws are covered in the following assignment.

More in the Federal Tax Course