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Withholding From Employees' Wages

Income Tax Withholding
To know how much income tax to withhold from employees' wages you should have a Form W-4, Employees' Withholding Allowance Certificate, on file for each employee. Ask all new employees to give you a signed Form W-4 when they start work. Make the form effective with the first wage payment. If the new employee does not give you a completed FormW-4, withhold tax as if he or she is single, with no withholding allowances.

Depositing Taxes
In general, you must deposit income tax withheld and both the employer and employee social security and Medicare taxes (minus any advance Earned Income Credit payments) by mailing or delivering a check, money order, or cash to an authorized financial institution or Federal Reserve bank. However, some businesses are required to deposit by electronic funds transfer.

To report and deposit New York State Income Tax withheld from employees' paychecks, employers should complete the Form NYS-4, Quarterly Combined Withholding and Wage Reporting Return, and enclose payment.

When to Deposit
There are two deposit schedules, monthly or semiweekly, for determining when you deposit social security, Medicare and withheld income taxes. These schedules tell you when a deposit is due after a tax liability arises (e.g., when you have a payday). Prior to the beginning of each calendar year, you must determine which of the deposit schedules you are required to use.

Filing Form 941
Each quarter, all employers who pay wages subject to income tax withholding (including withholding on sick pay and supplemental unemployment benefits) or social security and Medicare taxes must file Form 941, Employer's Quarterly Federal Tax Return. However, some exceptions may apply. For more information, please refer to the IRS website.

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