Reporting and Deposit Requirements for Agricultural Employers
Employers who paid wages to agricultural workers that are subject to income tax, social security or Medicare withholding must file a Form 943 (PDF), Employer’s Annual Federal Tax Return for Agricultural Employees, to report those wages.
Additionally, you are subject to withholding on wages if:
- You pay an employee $150 or more in the year for farm work, or
- The total wages (cash & noncash) you pay all farm workers in the year is $2,500.
There are some exceptions for hand-harvest workers you pay less than $150 during the year in Publication 51, (Circular A), Agricultural Employer’s Tax Guide.
Generally, you must file your Form 943 by January 31 of the year after you paid the wages, unless you made timely deposits during the year that full pay your liability. In that case you must file by February 10. You must also file Forms W-2 (PDF), Wage and Tax Statement, by February 28 (March 31 if filing electronically). You must furnish a copy of the Form W-2 to the employee by January 31.
If your total employment taxes will exceed $2,500 in the year, you will have to make electronic deposits throughout the year on a monthly or semi-weekly schedule. When depositing the taxes, usually using the Electronic Federal Tax Payment System (EFTPS), you will have to make the deposit by 8:00 p.m. Eastern time the day before the due date to be considered timely.
Additionally, if you accumulate $100,000 of liability in any deposit period, you must deposit the taxes using EFTPS by 8:00 p.m. EST the next day.
You will use your “lookback period” to determine whether you have to pay the tax monthly or semi-weekly. For Form 943, the lookback period is the second calendar year proceeding the current calendar year. For example, the lookback period for 2012 is 2010. If, during the lookback period, you reported $50,000 or less of tax on Form 943, you are on a monthly deposit schedule. If you had over $50,000 in Form 943 liabilities, you are on a semi-weekly deposit schedule.
See section 7 of Publication 51, (Circular A), Agricultural Employer’s Tax Guide, for information and rules to determine whether your deposits are due on a monthly or semiweekly schedule.
Information for Employers of H-2A Visa Workers
Foreign agricultural workers temporarily admitted to the United States on H-2A visas are exempt from U.S. social security and Medicare taxes on payments for services performed under the H-2A visa. Their compensation is not considered to be “wages” for purposes of federal income tax withholding, and is not subject to mandatory income tax withholding unless backup withholding applies.
You may voluntarily withhold U.S. federal income tax from the H-2A worker’s wages if both you and the worker agree.
You must report wages paid to an H-2A worker on a Form W-2 (PDF), Wage and Tax Statement, if:
- The worker presents a U.S. social security number or an Individual Taxpayer Identification Number (ITIN) issued by the Internal Revenue Service
- The worker was paid $600 or more during the calendar year
You do not report any Medicare or social security wages or Medicare or social security withheld taxes in the applicable boxes on the H-2A worker’s Form W-2.
Wages may be subject to backup withholding at the rate of 28 percent if the H-2A worker did not furnish you a U.S. social security number or an ITIN issued by the IRS, and the aggregate annual wages you paid to the H-2A worker is at least $600. If backup withholding applies, then you must report the wages subject to backup withholding – and the U.S. federal income tax withheld from those wages – on Form 1099-MISC (PDF), Miscellaneous Income, and Form 945 (PDF), Annual Return of Withheld Federal Tax. If an employer does not properly withhold the 28 percent tax from such payments, the employer may be liable for the amount of tax that should have been withheld.
- Foreign Agricultural Workers page
- Form 943 Instructions (PDF), Employer’s Annual Federal Tax Return for Agricultural Employers
- Notice 931 (PDF), Deposit Requirements for Employment Taxes
- Publication 515 (PDF), Withholding of Tax on Nonresident Aliens and Foreign Entities
- Publication 519, U.S. Tax Guide for Aliens
Source: Internal Revenue Service
Last reviewed: September 19, 2013