Texas Payroll Tax Filing Requirement
Residents in Texas don't pay state income taxes. As a Texas employer, this means you don't withhold state income taxes from your employees; however you must deduct federal income, Social Security and Medicare taxes from your worker's pay. Additionally, Texas employers have a quarterly obligation to file and pay state unemployment taxes.
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State Unemployment Tax
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Texas employers must remit quarterly deposits and returns for state unemployment taxes. Although the tax is not deducted from your employee's paychecks, the amount of tax you'll need to deposit is based on wages you pay. If you have 500 or fewer employees, you can file your returns and make deposits through the Texas Workforce Commission online portal. If you prefer to mail a paper return, you must order forms by contacting your local Texas Workforce Commission tax office.
Federal Income Tax
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When you hire an employee, you must obtain a signed federal Form W-4 from your worker. Your employee uses this form to report exemptions and marital status. You'll use the claimed filing status, exemptions and pay frequency to determine how much federal income tax to withhold from your worker. Match the W-4 information to the withholding tables in IRS Circular E to calculate the total income tax amount. You'll include amounts withheld for income tax in your federal tax deposit.
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Social Security and Medicare Taxes
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Texas employers must withhold Social Security and Medicare taxes from employee paychecks. Your employee pays half of the taxes, and your company matches the other half. The Social Security rate is 12.4 percent and the Medicare tax rate is 2.9 percent, based on your worker's gross taxable earnings. Since your employee is only responsible for covering half of these taxes, you'll deduct 6.2 percent for Social Security and 1.45 percent for Medicare from each employee's gross wages. You'll pay your matching portion when your federal tax deposit is made.
Federal Tax Deposits and Withholding Returns
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Generally, Texas employers will make monthly deposits with the IRS to cover amounts withheld from employee's paychecks for federal income, Social Security and Medicare tax. Your tax deposit will include the company matching amount. Monthly deposits are due on the 15th of each month, and must account for all payrolls issued the previous month. For example, deposits made on Feb. 15 will account for January pay dates. You are a monthly depositor unless the IRS notifies you otherwise. Additionally, each quarter, you must file IRS Form 941, Employer's Quarterly Federal Tax Return. The return reconciles any federal tax deposits you made during the period. Quarterly returns are on April 30, July 31, Oct. 31 and Jan. 31.
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nerd
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IS looking to see what Forms a Texas company has to file for employer taxes.
