IRS:(800)829-0115 MT DOR:(406)444-6900 MT UI:(406) 444-2545 MT State Fund WC:(800)332-6102
941 Form - Paid After Payroll & Quarterly Filed
This is paid monthly or within 4 days and the form is filed quarterly.
It must be filed quarterly even for annual payroll clients. For them, a zero quarterly return must be filed for 1st, 2nd & 3rd quarters.
Pays for Federal income tax, EE & ER Medicare, and Social Security from payroll runs.
Per QB functionality: 941 Part2 Line 16: If Line 12 total taxes is less than $2,500, this box is checked and no “scheduled” liability needs to be entered. If line 12 is over $2,500 and a monthly filer, the Month 1,2,3 liability is filled in. If line 12 is over $2,500 and a semiweekly depositor, the Schedule B is filled in.
943 Form - Paid After Payroll & Annually Filed
This form is used instead of the 941 if the client has an Agriculture business.
This is paid monthly or within 4 days of payday by the client or us. and the form is filed Annually by us.
Pays for Federal income tax, EE & ER Medicare, and Social Security from payroll runs
If the Agriculture business employs H-2A visa farmworkers, there is no Social Security, Medicare, FUTA nor SUI tax on the H-2A farmworkers.
Agricultural Employers are not required to withhold FIT nor SIT but employees can opt in.
940 Form - Paid Quarterly & Annually Filed
501C3 employers do not pay nor file FUTA nor SUI.
Although 501(c)(3) nonprofit organizations are exempt from the Federal Unemployment Tax Act (FUTA), nonprofits are not exempt from paying unemployment claims at the state level. State Unemployment Insurance (SUI) is an employer-funded tax program that provides short-term benefits to employees who have lost or left their job. Nonprofit organizations are not automatically exempt from SUI, but they do have a choice for how to pay for unemployment claims. Nonprofit organizations may participate in their state’s SUI tax program, or they may choose to become a reimbursing employer instead.
This is paid quarterly via EFTPS but filed annually. If the total FUTA tax for the year to date is under $500, payment can wait until it reaches the $500. The FUTA tax must be paid in the quarter that the $500 has been reached. As a standard policy, we always pay the FUTA tax each quarter along with the UI-5 tax. Form UI-5 and Form 941 are filed quarterly. FUTA Form 940 is filed annually.
This pays FUTA tax, Federal Unemployment Tax Act. The rate is .6% and is paid on the first $7,000 of wages per employee.
Agricultural Employers Differences:
There is an Agricultural business exception: If the company employs alien farmworkers that have an H-2A visa, they are not subject to FUTA nor SUI (State Unemployment Insurance tax) on the H-2A farmworkers.
If the company paid less than $20,000 in combined gross wages in a quarter to farmworkers, the company doesn’t have to pay FUTA nor SUI on those wages. Nor do they have to file a 940 or UI-5 form. Once a company pays more than $20,000 in combined gross wages in a quarter to farmworkers, they will forever have to pay the FUTA and SUI tax. Montana says they can be re-assessed after 2 years of paying SUI.
Even though there are no FUTA nor SUI taxes paid on the H-2A visa workers’ wages, their gross wages count towards the $20,000 limit in a quarter. So non-visa workers will have to pay FUTA and SUI if the visa workers and non-visa workers’ wages are over $20,000 in the quarter.
MT UI-5 - Paid Quarterly & Quarterly Filed
Sign on for our Client access account at UI Services. Username: Amatics PW: Amatics2!2022!
All covered employers must pay and file quarterly.
It must be filed quarterly even for annual payroll clients. For them, a zero quarterly return must be filed for 1st, 2nd & 3rd quarters.
You are a covered employer if you are non-agricultural and have more than $1,000 in wages this year or last year.
If you are an agricultural employer, you are a covered employer if you have more than $20,000 of wages in a quarter. H-2A visa employees’ wages count towards this $20,000 amount even though they don’t pay this tax.
Only the farmer can paper file and paper pay. They need to have less than 20 employees. If a CPA firm files, this must be filed electronically no matter how few employees the client has. They fine $25 if paper filed. Electronic filing means either via QuickBooks or Online at the MT UI website.
This pays State Unemployment Tax. The rates differ by client’s loss ratio each year. For 2023 it is paid on the first $40,500 of wages per employee.
All employers have at least a base of Admin UI of .13% and if they have claims they will have an additional MT SUI tax as well.
Once an agricultural company pays more than $20,000 in combined gross wages in a quarter to farmworkers, they will forever have to pay the FUTA and SUI tax. Montana says they can be re-assessed after 2 years of paying SUI.
MT State Income Tax Withheld - Paid After Payroll & Filed Annually
This is paid on the TAP website and the settlement date is the same as used for Fed & Fica payments.
The form is MW-3 and State copies of W2s are need to be sent to the state electronically. If there’s money due, the payment coupon is Form MW-1
They have two methods of calculating the invoice, monthly payroll reporting and annual payroll reporting.
The monthly amount is based on the actual monthly payroll paid and is reported on a monthly Payroll Report then monthly invoices are generated and paid by the client. Hogenson does this, we send MT State Fund a monthly Payroll Report.
The annual reporting mechanism is the same as the monthly except that the previous year’s actual is used as a basis for estimating the following year and that actual amount is then used to adjust plus or minus, to equal the actual payroll paid.
401K Tax Treatment
Federal or State tax is deferred on 401K contributions, but the contributions are subject to FICA tax. Therefore, the contribution amount is not recorded in W2 box 1 but is in box 3 & 5.
Only taxable for Federal and State tax. There is no FICA tax on this, so it Is included in W2 box 1 and box 16, and box 14 (SEHI) but not in box 3 nor box 5. The officer can then deduct this insurance amount from his 1040 form using “Self-Employed Health Insurance Deduction Worksheet”.
On 941, Line 2 Wages is derived from the Payroll Summary YTD Total Gross Pay less 401K EE Deduction less Pre-Tax Health plus Ofcr Hlth Pd by Co. (Taxable for state & Federal income tax but not FICA taxable). This amount is also W2 Box 1 Wages and W2 Box 16 State Wages.
On 941, Line 5a, Taxable Social Security Wages is derived from the Payroll Summary YTD Gross less Pre-Tax Health less any “excess wages” due to employee earning more than the Social Security limit, 2022 of 147,000.
Simple IRA Tax Treatment
SIMPLE IRA contributions are not included in the "Wages, tips, other compensation" box of
PDF. Salary reduction contributions must be included in the boxes for Social Security and Medicare wages.
SIMPLE IRA contributions are not subject to federal income tax withholding. However, salary reduction contributions are subject to social security, Medicare, and federal unemployment (FUTA) taxes. Matching and nonelective contributions are not subject to these taxes.
2/6/23: Paul said to leave the Korean Church as is and continue with FICA withheld until the pastor retires. There should be zero FICA withheld by both employee and employer and the pastor would pay Soc Sec & Medi as Self Employment tax on his personal return.
One of Zina’s clients received a letter from the MT DOR saying that we were filling out our MW-3 incorrectly. I called them for details, and they said that their software is going to assume the worst and charge interest if we don’t add 11 more columns of zero payments for clients that have only one payroll a year.
We considered these “one payroll a year” clients to be annual filers but the state considers “annual” to be someone with a tax liability under $1,200 a year. So, if their tax liability is over $1,200 a year, they need to marked as monthly filers. Since they are monthly filers, the DOR software is going to divide the one payment into 12 months and consider them to be late for the other 11 months unless we specify zero dollars for each of the 11 months and then the full amount on the 12th month.
What a nuisance. We have exposure of thousands of dollars in interest fees but the good news is that the DOR said if we get an interest charge letter, we just need to file an amended return that shows the zeros and they will reverse the interest charges.
I tested this in QB and if there was no liability paid, it won’t show as an entry on the MW-3, so we have to manually type “01312023 01152023 0.00 0.00” like the form below:
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