The summer months are a common time for many businesses to seek out seasonal or part-time workers. If they’re hiring help, it's important to understand tax filing and withholding responsibilities. This can help avoid penalties while staying compliant throughout the year.
Tax withholding rules for seasonal and part-time employees
Seasonal and part-time employees are subject to the same federal income tax withholding, Social Security, and Medicare tax rules as other employees. Employers must withhold and pay employment taxes on wages paid to these workers.
Seasonal employers and Form 941
Seasonal employers generally do not have to file Form 941, Employer’s Quarterly Federal Tax Return, for quarters in which they have no tax liability because no wages were paid.
An employer can let the IRS know they may not file a return for certain quarters by:
- Checking the “seasonal employer” box in Part 3 of every Form 941 filed.
- If this box is checked and at least one taxable return is filed during the year, the IRS generally will not inquire about quarters for which no return was filed.
See Section 12 of Publication 15 for additional details.
Filing Form 943 for agricultural employers
Businesses that employ farm workers should follow the rules in Publication 51, (Circular A), Agricultural Employer's Tax Guide.
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