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Notes on Taxes

How To Open a New EFTPS Account

How to Set up a New TAP Account

How to Initiate SUI for a Client

First Time Hiring Employees

Change a Business' Address

IRS:(800)829-0115 MT DOR:(406)444-6900 MT UI:(406)444-3834 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.

Deposit Due Dates: If the payroll tax is less than $2,500 for their current quarter or the preceding quarter, and you did not incur a $100,000 next-day deposit obligation during the current quarter, you can pay it with your Form 941, Employer's Quarterly Federal Tax Return.

Lesson 7- Tax deposits and filing a return to report payroll taxes⁠

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Per QB functionality: 941 Part 2 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.

Fillable Form 941 2023 is here:

Form 941 (Rev. March 2023) (irs.gov)⁠

Schedule B:

Form 941 (Schedule B) (Rev. January 2017) (irs.gov)⁠

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If a client has over $50,000 in tax liability in the lookback period, they must pay their taxes on an Accelerated (semi-weekly) schedule. The lookback period is the previous 3Q, 4Q, 1Q, and 2Q. This qualification must be reviewed each year by us and we must advise the client to change. The IRS does not inform the client of the change. The IRS will penalize for being on the wrong schedule.

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.

Deposit Due Dates: If you accumulate less than $2,500 of net Form 943 taxes during the year (line 11 of Form 943), no deposits are required. You may pay the tax with Form 943.

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

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.

S-Corp Rules

S-Corps have to pay FUTA for their employees but not the shareholders. So if there’s just the shareholder getting paid, they do not need to have FUTA nor MT UI.

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.

501C3 employers do not pay nor file FUTA. But do pay for SUI or they can be self-insured.

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.

State Unemployment Tax and Nonprofit Organizations — Altruic Advisors⁠

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Non-Profits (501-C, 990 Form Filers) do not need to pay FUTA nor file a 940 form. The must pay MT UI, though, or Self-Insure.

Should Nonprofits Pay State Unemployment Tax or Self-Insure During COVID-19? | Nolo⁠

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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.

Notes on Taxes⁠

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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.

Non-profits (501-C, 990 Form filers) must pay MT UI or Self-Insure. They do not pay FUTA nor file a 940 form.

Should Nonprofits Pay State Unemployment Tax or Self-Insure During COVID-19? | Nolo⁠

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To Create a New UI Account for a New Client

Under “UI Account Registration” Select “Register Your Client’s Business”. ETA 7-10 Bus. Days.

When client receives a letter with their MT UI account number, go back to our account, click on More, Request Employer Account Access, add their FEIN and MT UI number.

MT UI E-Services tech Debbie (406) 444-6963.

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

MW-3 Fillable Form:

https://mtrevenue.gov/?mdocs-version=2020 - MW-3.pdf-v2020&mdocs-file=56165&mdocs-url=false⁠

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TAP

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TransAction Portal (mt.gov)⁠

Username: AmaticsTAP PW: Amtics2!

Adding a new client to our TAP account

If the client already has a MT DOR account number, we can add them to our account by:

Accountant Center (upper right). In the Access Management block, Add Third Party Access.

Registering a New Client that Doesn’t Have a MT DOR Account Number

If the client does not have a MT DOR account number, they or we, can go to

Tap.dor.mt.gov⁠

, under Businesses, Register for a New Tax Account. Register, Register for a New Tax Account. We can fill out all the required info. They will mail a letter to the client with their MT DOR account number. Then we can add the new client to our TAP account as above.

EFTPS

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Welcome To EFTPS - Login⁠

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Registering a New Client that Doesn’t Have an EFTPS Account

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Notes on Systems and Services · How To Open a New EFTPS Account (coda.io)⁠

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Retrieving the E-filing 10 digit code that was sent by letter when client first signed up for EFTPS. This is input into the e-file 941 submit section for client owned QB, as opposed to the 5 and 6 digit codes that are input in the Accountant Representative version.

You can call the IRS E-file services to reset your 10-digit pin. Within 7-10 banking days, your PIN will be mailed to you.

Here's how:

Contact 866.255.0654.

Choose option 1 and then 3 for E-file questions.

When you get an IRS agent, ask for the e-file 10-digit PIN department.

New Hire Reporting Online (E-Pass to be Discontinued 6/30/22)

Print the New Hire report from QB and fax it to: DPHHS (406)444-0745

Or use OKTA:

https://okta.loginmt.com/user/welcome?fromURI=https%3A%2F%2Fokta.loginmt.com⁠

Username:

mgauthier@amaticscpa.com⁠

PW: Bozeman#1 City: Bozeman

New Hire Reporting System (mt.gov)⁠

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MT State Fund - Work Comp

Phone: (800)332-6102 Fax: (406)495-5020

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.

Principle and spouse of principle do not need Work Comp whether sole proprietor or S-Corp.

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MT State Fund payroll-report-instructions-fy23.pdf

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MSF - Employers (montanastatefund.com)⁠

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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.

Do 401(k) Deductions Reduce FICA Wages? (zacks.com)⁠

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401K contributions are subject to MT Ui and not subject to FUTA.

S-Corp Officer Insurance Tax Treatment

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”.

S-Corp Officer Health Insurance Deduction FAQs - ASAP Help Center (businessasap.com)⁠

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Tax Treatment on Ofcr Hlth Pd by Co

Ofcr Hlth Pd by Co effects Quarterlies & W2

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, and 2023 it’s 160,200.

Simple IRA Tax Treatment

SIMPLE IRA contributions are not included in the "Wages, tips, other compensation" box of

Form W-2, Wage and Tax Statement⁠

PDF, but check the Retirement Plan box in box 13. For more information, see the

instructions for Forms W-2 and W-3⁠

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.

SIMPLE IRA Plan | Internal Revenue Service (irs.gov)⁠

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SIMPLE IRA Contribution Limits in 2022 and 2023 | The Motley Fool⁠

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How Do I Report SIMPLE IRA Contributions on a W-2? (investopedia.com)⁠

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What is Subject to FICA?

Aflac Pre-Tax - No for

Cafeteria Plans - Advisories | Aflac⁠

Aflac plans come in 2 varieties, pre-tax and after tax. Caution.

HSA - Not subject to FICA

Pre-Tax Health Insurance

Cafeteria plans and Section 124 plans are exempt from state and federal income tax as well as FICA.

IRS Publications for Special Circumstances

IRS on Household Employees:

2023 Publication 926 (irs.gov)⁠

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Publication 51 (2023), (Circular A), Agricultural Employer's Tax Guide | Internal Revenue Service (irs.gov)⁠

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Foreign Agricultural Workers | Internal Revenue Service (irs.gov)⁠

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Ministers - Pastors and FICA, SECA, MT UI and Housing

Churches are not to pay FICA to ministers. Social Security and Medicare get paid by the minister under SECA as self-employment tax. They'll pay both sides of the Social Security and Medicare. They pay 15.3 percent. The church can pay 50% of the 15.3% Social Security and Medicare to the Minister, but it is taxable to the minister as taxable income, so he has to pay income tax on it. The church can withhold and pay federal income tax and state income tax from the minister's paycheck, but not FICA. The minister can make quarterly payments to the IRS. They will get a W2 with no withholding for FICA. If the minister does non-ministerial work, they are to have FICA withheld on that pay.

Housing. Housing reimbursement is not taxable to the minister as income tax. But it is taxable under his self employment tax. So he has to pay Medicare and Social Security on that. If the minister is getting a housing allowance, he must provide expenses on his tax return in the amount of the housing allowance. If there is more to the allowance then there are to housing expenses, he has to count the excess as taxable income.

MT Unemployment Insurance: Churches do not have to pay MT UI for Ministers but they have to pay for all other employees. If there’s only the pastor employed, they do not need a UI account.

Ministers and Members of Religious Orders | Internal Revenue Service (irs.gov)⁠

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2022 Publication 517 (irs.gov)⁠

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Elective FICA Exemption - Churches and Church-Controlled Organizations | Internal Revenue Service (irs.gov)⁠

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Guide to Minister's Compensation (clergyfinancial.com)⁠

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How Clergy Staff Pay For Social Security Taxes (payrollpartners.com)⁠

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FUTA Tax Exemption | Who Is Exempt from FUTA Tax? (patriotsoftware.com)⁠

501C3 orgs are exempt.

2/6/23: Paul said to leave the Korean Church as is and continue with FICA withheld until the pastor retires. There actually 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.

MT Publications for Special Circumstances

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Table of Contents - MCA (mt.gov)⁠

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To: Zina Trotter <

ztrotter@amaticscpa.com⁠

> Cc: Soha Elsahn <

selsahn@amaticscpa.com⁠

>; Sandy Jenner <

sjenner@amaticscpa.com⁠

>; Cheralie McCorkendale <

cmccorkendale@amaticscpa.com⁠

> Subject: Change in the way we fill out MW-3

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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Tyler, one of Chase's clients phoned to ask how to gross up a $22,000 net check. I told him to subtract .0765 from 1 = .9235 and divide that into the $22,000 to get $23,822.41.

401K Taxable?

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2024 Publication 15 (irs.gov)⁠

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INSTRUCTIONS ON HOW TO MANUALLY ADD SCORP HI TO ALL FORMS IN QB DESKTOP:

-On the 940 you have to add the Scorp HI to the line on the interview page under "Determine FUTA tax before adjustments", and below that change the top line of Fringe Benefits to match this total. Then on the next page you have to add the total of just the Scorp HI to box 3 "total payments to all employees". This will increase box 5 "payments made in excess of limit" but nothing else. – Some retirement amounts may already be in these boxes, so add to them.

-On the W2s/W3 you have to manually add the Scorp HI to box 14, then also add the SCorp HI amounts to box 1 and 16 - make sure these amounts flow to the corresponding boxes on the W3.

-On the 941 you have to add the SCorp HI to box 2, nothing else should change.

-On the MW3 you have to add the SCorp HI to the total wages paid on the top, nothing else should change.

-No changes to UI5.

Closing a Business with the IRS

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Closing a business | Internal Revenue Service (irs.gov)⁠

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Mark the tax return “final”

Send a letter to IRS requesting they close the IRS Business Account and cancel the EIN.

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`Submission Processing Center Street Addresses for Private Delivery Service (PDS) | Internal Revenue Service (irs.gov)`⁠
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UPS: Submission Processing Center Street Addresses for Private Delivery Service (PDS) | Internal Revenue Service (irs.gov)⁠

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Ogden - Internal Revenue Submission Processing Center 1973 Rulon White Blvd. Ogden, UT 84201

HSA and FICA and FUTA and MT UI and Federal and State Income Tax

Hi Tanner, (7/18/24) RE: Security Title Quarterly Report

Here at

Are Cafeteria Plans Subject to ERISA, FICA, or FUTA? (investopedia.com)⁠

I’ve found that an HSA is part of a cafeteria plan and as such is not subject to FICA nor FUTA.

Normally the state follows the federal rules but not in this case. HSA employee contributions are taxable to MT UI.

HSA employee contributions are not subject to federal nor state income tax.

What Is a Cafeteria Plan?

According to the

Internal Revenue Service⁠

(IRS), participants must be able to choose at least one option from a cafeteria plan. Options for cafeteria plans may include

health savings accounts⁠

(HSAs), adoption assistance, group life insurance, and cash benefits.

Cafeteria Plans and FUTA

Like FICA taxes, most qualified cafeteria plan benefits are not subject to FUTA. However, adoption assistance benefits are subject to FUTA, in addition to FICA, but not income tax

withholding⁠

Is a Car Allowance/Mileage Re-imbursement Taxable?

If there’s an Accountable Plan, the payment is not taxable. This would be where receipts or a mileage log is turned in monthly.

If there’s not an Accountable Plan, the payment is fully taxable as income. This would be a flat amount paid with no documentation.

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Keep Car Allowance Tax-Free For Employees - Employer's Guide (driversnote.com)⁠

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