IRS Publication 15-A - Employer's Supplemental Tax Guide

IRS Form 15-A is a supplement to IRS Form 15 and helps employers calculate withholding taxes on income, Social Security, Medicare, as well as providing the Federal Unemployment tax tables. Another related supplementary form is IRS Form 15-B, which is the employer’s tax guide for handling fringe benefits.

IRS Publication 15-A classifies employees into four types: independent contractor, common-law employee, statutory employee and statutory non-employee. Employers face stiff penalties for mis-classifying independent contractors so understanding these classifications is important and increasingly difficult given the large number of independent contractors now used by businesses.

In determining whether someone performing work is an employee or an independent contractor, a key variable is whether the means and methods of performing the work are controlled by the employer.  Put another way, an independent contractor is free to perform the required work using their own methods and tools, as long as the result satisfies the employer. This is analogous to independent contractors working on a construction job site, where they own their own tools and use them to perform work for the builder, but are not actual employees of the contractor.

IRS Form 15-A also provides employers with guidance on how to treat same-sex marriages for taxation purposes. There are also special rules for Social Security and Medicare taxes available for religious workers, such as ministers. People belonging to religious sects opposed to insurance are eligible for special treatment and these guidelines are detailed in Form 15-A.

Additional unusual situations covered in IRS Form 15-A include: how to handle temporary work relocation assignments, which is defined as performing work in a different location outside a certain proximity from the primary work location and for less than one year; how to handle scholarship and fellowship payments; how to treat back pay and golden parachute one-time payouts. IRS Form 15-A even provides the tax tables for withholding to be used for Indian gaming profits paid to tribal members.

Most IRS forms released by the IRS for 2018 required revisions to reflect the new Tax Cuts and Jobs Act passed by the United States Congress in December 2017. The IRS released the new Form 15-A in the first half of 2018 and, as is true for all new forms released during a year when major tax changes are made, tax filers should check the IRS.gov website frequently for any updates before filing their 2018 returns.

Given the many changes made to the tax code, employees are advised to check their withholding amounts during 2018 to see if they should make any changes to their paycheck withholding amounts. Doing so during the year will help avoid any surprises at tax filing time.