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FICA Taxes › Internal Revenue Service

Federal Insurance Contribution Act (FICA) Taxes are United States federal payroll taxes levied to fund the Social Security and Medicare system. FICA Taxes burdens are divided between employers and employees and... more +
Federal Insurance Contribution Act (FICA) Taxes are United States federal payroll taxes levied to fund the Social Security and Medicare system. FICA Taxes burdens are divided between employers and employees and are currently set at 12.4% for Social Security and 2.9% for Medicare. less -
McGlinchey Stafford

Is a “Tip” Paid in Cryptocurrency a Tip for Employment Tax Purposes?

McGlinchey Stafford on

Tips are in the news lately. It seems like political strategists on both sides of the aisle have concluded that excluding tips from taxable income is good for votes. One has to wonder if this political promise will go the way...more

The Wagner Law Group

A New “One Percent” Tax Issue – Proposed IRS Regulations on the Excise Tax on Stock Repurchases

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The Department of the Treasury (“Treasury”) and the Internal Revenue Service (“IRS”), in an April 2024 follow-up to IRS Notice 2023-2, issued proposed regulations dealing with the one-percent excise tax under Internal Revenue...more

Foley & Lardner LLP

To 457(b) or Not to 457(b): Five Rules You Must Follow to Keep Your 457(b) Plan Compliant

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Recruiting and retaining top executives can be challenging for non-governmental tax-exempt organizations such as Code §501(c)(3) organizations, private universities, and certain healthcare organizations (Nonprofits). Not only...more

Dorsey & Whitney LLP

The Special Timing Rule for Taxation of Nonqualified Deferred Compensation

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For an employee who is a U.S. taxpayer, both the employer and the employee are liable for a portion of Social Security taxes and Medicare taxes (collectively referred to as “FICA” taxes) on the employee’s compensation. ...more

Fox Rothschild LLP

Social Security Has Announced the 2024 “Carrot”. Don’t Forget the “Stick.”

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As inflation has come back into the economy’s conversation in the past three years, we have seen lots of publicity about the adjustments in social security payments to address inflation as well as the system’s overall...more

McDermott Will & Emery

Employers Be Forewarned and Forearmed: Recent IRS Announcements Require Action on ERTC Claims

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Promoters and tax advisors have extensively marketed the Employee Retention Tax Credit (ERTC) as a way for employers to reclaim Federal Insurance Contributions Act (FICA) payroll taxes paid during the first two years of the...more

Rivkin Radler LLP

The Trust Fund Penalty – Times May be Tough, But Don’t “Borrow” from Withheld Taxes

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It’s wonderful to be part of a successful business, especially in a strong economy. The owners are probably enjoying a more than just decent return on their investment and, in most cases, are getting along well enough. The...more

Foley & Lardner LLP

And The Crowd Goes Wild: IRS Delays SECURE 2.0 Roth Catch-Up Rule Until 2026

Foley & Lardner LLP on

While most of the country was gearing up for the U.S. Open, retirement plan sponsors and service providers collectively celebrated a big win on August 25 when the IRS delayed the new Roth catch-up rule until January 1, 2026. ...more

Best Best & Krieger LLP

New Guidance - Secure 2.0 Roth Treatment of Catch-up Contributions

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On August 25, 2023 the Internal Revenue Service issued Notice 2023-62, which provides a critical 2-year delay in the enforcement of new retirement plan Catch-up Contributions rules passed under the Secure 2.0 Act of 2022....more

Foley & Lardner LLP

Another Fund Manager Sues IRS Over Application of “Limited Partner” Exception to Self-Employment Taxes

Foley & Lardner LLP on

On August 11, 2023, Stamford, Connecticut-based hedge fund manager Point72 Asset Management (“Point72”) filed a petition with the Tax Court contesting the IRS’s position that its owner, billionaire and New York Mets team...more

Warner Norcross + Judd

IRS Delays Roth Catch-up Requirement to 2026

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The SECURE Act 2.0, enacted on December 29, 2022, is the most significant piece of legislation affecting retirement plans in many years. One provision in the Act causing headaches for plan sponsors, payroll providers and...more

Proskauer - Employee Benefits & Executive...

IRS Offers Two-Year Transition Period to Implement SECURE 2.0 Roth Catch-Up Requirement

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On Friday, the IRS released Notice 2023-62, which addresses certain pressing implementation issues related to the SECURE 2.0 requirement that catch-up contributions for participants with FICA wages of more than $145,000...more

Jackson Lewis P.C.

Just Catching-Up? Plan Sponsors Receive Eagerly Awaited Reprieve from Roth Catch-Up Implementation

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With a multitude of questions surrounding implementation and administration, late on a summer Friday afternoon, the IRS issued Notice 2023-62 (Notice), providing Plan Sponsors with a transition period until 2026 to implement...more

Foley & Lardner LLP

Diving into SECURE 2.0: More Changes That Will Help Make 401(k) Plan Administration Simpler and Other Possible Changes of Which to...

Foley & Lardner LLP on

The SECURE 2.0 Act of 2022 (SECURE 2.0) significantly changes the legal and administrative compliance landscape for U.S. retirement plans. Foley & Lardner LLP is authoring a series of articles that take a “deep dive” into key...more

Seyfarth Shaw LLP

My Insurance Doesn’t Cover That? Agency Guidance on “Junk Insurance”

Seyfarth Shaw LLP on

Seyfarth Synopsis: Fresh on the heels of the IRS Chief Counsel Memorandum on wellness and indemnity products, discussed in our prior post here, the agencies have weighed in with more formal and more expansive guidance...more

Woodruff Sawyer

Compliance Alert: FICA Reduction Redux – IRS Issues Guidance on Wellness Indemnity Payments

Woodruff Sawyer on

On June 9, 2023, the IRS released OCC Memo 202323006, which advises that wellness indemnity payments under a fixed indemnity insurance policy are wages for purposes of Federal Insurance Contributions Act (FICA) taxes, Federal...more

McDermott Will & Emery

Just Catching Up? Payroll Challenges Plague Roth Catch-Up Contribution Implementation

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In this series of articles, we explore the implications of SECURE 2.0’s changes to catch-up contributions and how employers should respond. The SECURE 2.0 Act requires participants who earned more than $145,000 in FICA...more

Flaster Greenberg PC

Tax Pitfalls To Avoid In Employment Litigation Settlements

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By all measures, 2021 was a banner year for hiring, but 2022 and 2023 have been the opposite. According to one media source, more than 121,000 jobs in the technology sector alone — think Google LLC, Amazon.com Inc.,...more

Seyfarth Shaw LLP

FICA Tax Avoidance Wellness Program Viewed Unfavorably by 87,000 New IRS Agents

Seyfarth Shaw LLP on

Seyfarth Synopsis: Just like a bad penny, schemes promising employers ways to reduce their FICA tax burden, and maybe their employees’ income tax burden at the same time, keep popping up with a slightly different burnish on...more

Freeman Law

Section 530 and IRS Employment Tax Audits: Worker Classification and Relief

Freeman Law on

Worker Classification and Section 530 Relief - Employers are required to pay employment taxes to the IRS. Generally, these payments consist of two portions: the employee’s portion of FICA and income taxes and the employer’s...more

Blank Rome LLP

Recent Lawsuit Highlights a Potential Equity Compensation Trap

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It is common for executives to be compensated by giving them the right to receive employer stock. This right can take different forms, including direct stock grants, stock options, and restricted stock units. Equity awards...more

Morgan Lewis

Resolving Erroneous Payroll Tax and Information Return Reporting Penalties with the IRS

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Some taxpayers are receiving automatically generated IRS notices of underpayments and penalties with respect to Form W-2 income tax and FICA withholdings, unemployment taxes, and backup withholding, as well as other year-end...more

Verrill

Nonqualified Deferred Compensation and the Special Timing Rule HR Professionals Should Be Aware of for FICA Tax Purposes

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Twenty years ago this month the Enron Corporation imploded in spectacular fashion and declared bankruptcy. In the weeks leading up to its bankruptcy filing, over 100 highly compensated employees raced to receive early...more

Chambliss, Bahner & Stophel, P.C.

Tax Implications of House Passage of the Build Back Better Act

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This morning, the House of Representatives voted 220 to 213 in favor of passing the Build Back Better Act (the Bill). The Congressional Budget Office estimates the bill will cost almost $1.7 trillion and add $367 billion to...more

Rivkin Radler LLP

Are The Feds Getting Ready To Kick Your “S”?

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Report Card- A couple of weeks ago, the Treasury Inspector General for Tax Administration (“TIGTA”) released a report that presented the results of its review to determine whether the IRS’s “policies, procedures and,...more

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