Form 943, officially known as the "Employer's Annual Federal Tax Return for Agricultural Employees," is a tax form used by employers who pay wages to farmworkers. This form is used to report federal income tax withheld, as well as Social Security and Medicare taxes, from the wages of agricultural employees. It is an annual form, unlike the quarterly 941 Form, and is specifically required for employers in the agricultural sector.
Increasingly, more companies in the US track and file this information with software like ezPaycheck. Payroll software like ezPaycheck is the most effecient way for employers to maintain accurate records while also ensuring compliance with IRS and SSA requirements. Additionally, employers can simultaneously file W-2 and W-3 Forms.
Who Needs to File Form 943?
Agricultural Employers:
You must file Form 943 if you paid wages to one or more farmworkers and those wages were subject to Social Security and Medicare taxes or federal income tax withholding.
Agricultural workers include those who perform services on a farm related to cultivating the soil, raising or harvesting agricultural or horticultural commodities, handling, planting, packaging, and delivering produce.
Wage Thresholds:
If you paid an employee cash wages of $150 or more in a year for farmwork.
If the total amount you paid to all farmworkers is $2,500 or more.
Information Included in Form 943
1. Employer Information:
- Employer Identification Number (EIN)
- Name and address of the employer
2. Wage and Tax Information:
- Total wages subject to Social Security tax
- Total Social Security tax withheld
- Total wages subject to Medicare tax
- Total Medicare tax withheld
- Federal income tax withheld from employees' wages
3. Tax Deposits and Adjustments:
- Total tax deposits for the year
- Balance due or overpayment
- Adjustments for prior quarters (if applicable)
4. Credits and Payments:
- Credits for COBRA premium assistance payments
- Other payments or credits against the tax liability
Calculating the Values Inside Form 943
1. Wages and Tax Withholdings:
Total Wages Subject to Social Security Tax: Sum of all wages paid to employees that are subject to Social Security tax.
Social Security Tax Withheld: Multiply the total wages subject to Social Security tax by the Social Security tax rate (12.4%, split equally between employer and employee, i.e., 6.2% each).
Total Wages Subject to Medicare Tax: Sum of all wages paid to employees that are subject to Medicare tax.
Medicare Tax Withheld: Multiply the total wages subject to Medicare tax by the Medicare tax rate (2.9%, split equally between employer and employee, i.e., 1.45% each).
Federal Income Tax Withheld: Sum of all federal income taxes withheld from employees' wages based on their W-4 forms.
2. Tax Deposits and Adjustments:
Total Tax Deposits: Total amount of tax deposits made throughout the year.
Balance Due or Overpayment: Calculate the difference between the total tax liability and the total tax deposits made. If the total deposits are less than the tax liability, the balance due must be paid. If the deposits exceed the liability, it results in an overpayment.
3. Credits and Payments:
COBRA Premium Assistance Credits: Any credits for COBRA premium assistance payments made by the employer.
Other Payments/Credits: Any additional payments or credits that can be applied against the total tax liability.
Filing Form 943 Using ezPaycheck
ezPaycheck is a payroll software designed to simplify the payroll process for small to mid-sized businesses. Here's how you can use ezPaycheck to file Form 943:
1. Setup and Configuration:
Install ezPaycheck: Download and install the ezPaycheck software from Halfpricesoft.com.
Enter Company Information: Input your company details, including Employer Identification Number (EIN), address, and other relevant information.
Full instructions on how to setup the application can be found here
2. Payroll Processing:
Enter Employee Data: Add your agricultural employees to the system, including their personal information, tax withholding details, and payment schedules.
Run Payroll: Process payroll by entering the hours worked, wages, and any additional earnings or deductions. ezPaycheck will automatically calculate the federal and state taxes, Social Security, and Medicare withholdings.
3. Generate Form 943:
Access Tax Forms: Navigate to the tax forms section within ezPaycheck.
Generate Form 943: Select the option to generate Form 943 for the relevant year. The software will automatically populate the form with the necessary payroll data.
Review and Print: Review the form for accuracy. Once verified, print the form or save it as a PDF for electronic filing.
4. Filing Form 943:
Electronic Filing: Presently, use the IRS EFTPS system to file 943 forms. ezPaycheck is presently developing a direct efiling system.
Mailing the Form: If you choose to mail the form, print the completed form and send it to the appropriate IRS address as indicated in the form's instructions.
5. Payment of Taxes:
Deposit Taxes: Ensure that all payroll taxes are deposited according to the IRS schedule using the EFTPS system. More instructions on this can be found here.
Conclusion
Form 943 is an essential annual tax return for employers who pay wages to agricultural employees. It ensures compliance with federal tax laws, supports accurate record-keeping, and contributes to the funding of Social Security and Medicare programs. By using payroll software like ezPaycheck, employers can streamline the process of preparing and filing Form 943, ensuring timely and accurate submissions, avoiding penalties, and maintaining clear financial records.