Thinking of bringing seasonal workers on staff to help out during your busy season?

Keep in mind that these temporary workers are typically subject to the same employment tax rules as your regular employees. You'll generally have to withhold social security and Medicare taxes, as well as federal income tax from their wages. You'll also have to follow payroll tax deposit rules and employment return filing requirements.

There are special filing rules if you only hire employees at a specific time of year, such as the holiday season. For each quarter that you pay wages, you can check the box for "seasonal employer" on Form 941, "Employer's Quarterly Federal Tax Return." By notifying the IRS of your seasonal status, you're not required to file returns for quarters when you have no wages or tax liability.

State rules regarding seasonal employees vary. In addition to reporting these employees as new hires and filing quarterly state payroll reports, you may have to request classification as a seasonal employer by completing a special form. In some states, you're required to reapply periodically. Qualifying as a seasonal employer can affect your staff's eligibility for unemployment benefits as well as your experience rating, which determines your tax rate.

When you hire seasonal farm or agricultural workers, additional rules may apply, even if you pay your help in cash.

Please call for more information about payroll tax rules, recordkeeping requirements, and documentation for seasonal employees. We're here to make sure your busy season goes smoothly.


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