Small Business Development Guide
Tax Responsibilities for Employers
- Federal Withholding Income Tax is the tax withheld for Social Security and Medicare. Employees file FORM W-4 to determine the amount of withholding. The business must file FORM 941 (quarterly deposits of annual withholding) and FORM 8109 (Federal Tax Deposit Coupons) with each deposit due the 15th of the following month. Call the IRS at 1-800-829-1040 for forms, an application, and more information.
- Employer's Match to Federal Withholding Income Tax. Employers must match a portion of the income withheld from the employee's paycheck for Social Security and Medicare. File FORM 941 (quarterly deposits of annual withholding match). In general, you must deposit income tax withheld and both the employer and employee Social Security and Medicare taxes (minus any advance EIC payments) by mailing or delivering a check, money order, or cash to a financial institution that is an authorized depository for Federal taxes. However, some taxpayers are required to deposit using the Electronic Federal Tax Deposit System (EFTPS) (www.eftpssouth.com). For additional information, refer to employment taxes for business at www.irs.gov. Call the IRS at 1-800-829-1040 for forms, an application, and more information.
- State Withholding Income Tax is the portion of the employee's paycheck that the employer must withhold for state withholding income tax. To apply to be a withholding agent with the State of Ohio, file FORM IT-1. The business files FORM IT-941 annually for tracking the withholding and FORM IT-501 quarterly or monthly for depositing the withholding tax. For forms and more information, contact the Ohio Department of Taxation at 1-800-282-1780.
- Local/Municipal Withholding Income Tax is withheld from the employee's paycheck depending on the laws of the school district of the employee's residence. Employees must furnish the employer with FORM IT-4 to determine amount of withholding tax.
- If applicable, employers must register as a withholding agent on FORM IT-1S and deposit the employee's withholding tax. Contact your local tax department for information.
- Federal Unemployment Tax must be filed annually by the employer on FORM 940. Deposits to the IRS should be made on FORM 8109. These deposits should be made quarterly on FORM 941 if greater than $100. Call the IRS at 1-800-829-1040.
- State Unemployment Tax is paid by all employers to the State of Ohio Unemployment Insurance Fund. Initial payments should be paid on FORM UCO-1 and all later payments should be paid quarterly on FORM UCO-2E or UCO-2R. For information, contact the State of Ohio at 419-245-2996.