US: updated IRS Publication 80 issued – Federal Tax Guide for Employers in US possessionsFebruary 19, 2013
The US Internal Revenue Service (IRS) has released the 2013 revision of IRS Publication 80, Circular SS (Federal Tax Guide for Employers in US Virgin Islands, Guam, American Samoa and the Commonwealth of the Northern Mariana Islands).
The publication is dated 29 January 2013 and is intended for use in preparing 2013 tax returns.
Publication 80 provides information for employers whose principal place of business is US Virgin Islands, Guam, American Samoa and the Commonwealth of the Northern Mariana Islands (CNMI), or that have employees who are subject to income tax withholding in these US possessions.
Publication 80 notes that employers and employees in these jurisdictions are generally subject to US social security and Medicare taxes under the US Federal Insurance Contributions Act (FICA), and summarizes employer responsibilities to collect, pay and report these taxes.
Additionally, Publication 80 provides employers in the US Virgin Islands with a summary of their responsibilities under the US Federal Unemployment Tax Act (FUTA).
Revised Publication 80 provides information on the new rules, including:
- The employee’s portion of the social security tax has reverted from 4.2% to 6.2% for 2013.
- The IRS will not assert that an employer has understated liability for FICA taxes by reason of a failure to treat services performed before 1 January 2015 in the CNMI by residents of the Philippines as “employment” under section 3121(b) of the US Internal Revenue Code (IRC).
- CNMI government employees are subject to social security and Medicare taxes beginning in the fourth calendar quarter of 2012.
- Employers are required to withhold an Additional Medicare tax of 0.9% from wages paid to an employee in excess of US$200,000 in a calendar year.
Publication 80 includes a calendar with the due dates for the IRS filing requirements.
In addition, Publication 80 refers to other IRS publications that are relevant in this context, including:
- Publication 15, Circular E (Employer’s Tax Guide) for information on US federal income tax withholding
- Publication 509 (Tax Calendars)
- Publication 570 (Tax Guide for Individuals With Income From US Possessions) for information on the self-employed tax
Publication 80 is available on the IRS web site at www.irs.gov
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