Wage Reporting: Need to Know
Special Types of Employment & Payment
Wage Type | Status |
Advances against future earnings | Subject |
Aliens, Resident: Services performed in the United States | Subject |
Annuities: Payments made by the employer into a fund for retirement or death benefits under a plan offered to all employees or a certain class or classes of employees | Exempt |
Back Pay: Wages paid due to a dispute related to employment | Subject |
Bonuses | Subject |
Corporate Officer Payments: Corporate officers performing a service for the corporation (applies to Subchapter S, C Corp, and LLC electing to be treated as a corporation) | Subject |
Deceased Worker: Wages paid to beneficiary or estate after calendar year of worker’s death | Exempt |
Deceased Worker: Wages paid to beneficiary or estate in year of worker’s death | Subject |
Deferred Compensation (when paid) | Subject |
Disabled Workers: Wages paid after year in which worker becomes entitled to disability insurance benefits under the Social Security Act | Subject |
Employee Benefit Expense Reimbursement: Amounts over the specified government rate for per diem or standard mileage | Subject |
Employee Benefit Expense Reimbursement: Amounts not exceeding the specified government rate for per diem or standard mileage | Exempt |
Family of a Sole Proprietor or SMLLC not electing to be treated as a corporation: Minor child employed by parent | Exempt |
Family of a Sole Proprietor or SMLLC not electing to be treated as a corporation: Child 21 or older employed by parent | Subject |
Family of a Sole Proprietor or SMLLC not electing to be treated as a corporation: Parent employed by sole proprietor | Exempt |
Family of a Sole Proprietor or SMLLC not electing to be treated as a corporation: Spouse employed by sole proprietor | Exempt |
Foreign Government or International Organization | Exempt |
Foreign Service by United States Citizens: For American employers | Subject |
Foreign Service by United States Citizens: As U.S. government employees | Exempt |
Holiday Pay | Subject |
Home Workers (industrial, cottage industry): Common law employees | Subject |
Home Workers (industrial, cottage industry): Statutory employees | Subject |
Hospital Employees: Interns | Exempt |
Insurance for Employees: Accident and health insurance premiums under a plan or system for employees and their dependents generally or for a class or classes of employees and their dependents | Exempt |
Insurance for Employees: Group term life insurance costs | Exempt |
Leave-Sharing Plans: Amounts paid to an employee under a leave-sharing plan | Subject |
Limited Liability Companies (LLCs): Payments made to member workers of member-managed LLC where the workers do not also manage, and all LLCs electing to be taxed as corporations | Subject |
Non-Profit Organizations (NPO) not qualifying as 501(c)(3) entities | Subject |
Partner or Sole Proprietor: Distribution of profits to general or limited partners of a partnership or to a sole proprietor | Exempt |
Railroads: Payments subject to the Railroad Retirement Act | Exempt |
Religious / Church: Organization operated primarily for religious purposes and managed, supervised, controlled, or primarily supported by a Church, Association of Churches or Convention of Churches and all Churches, Associations of Churches, and Conventions of Churches | Exempt |
Retirement and Pension Plans: Employer contributions to a qualified plan | Exempt |
Salespersons: Statutory employees (except as noted for commissions.) | Subject |
Termination, or Dismissal Pay | Subject |
Sick Pay in the first 6 months following the last month in which the employee performed services. | Subject |
State/Local Governments and Political Subdivisions (Employees of) Payments (including salary and wages) to most elected and appointed officials | Exempt |
State/Local Governments and Political Subdivisions (Employees of): Precinct Election Workers | Exempt |
Student, Scholars: Student enrolled and regularly attending classes, performing services for a private school, college, or university; auxiliary non-profit organization operated for and controlled by school, college, or university; or public school, college, or university | Exempt |
Tips or Gratuities reported in writing to employer | Subject |
Vacation: Paid vacation for employee | Subject |
Worker’s Compensation | Exempt |
Conditional Situations and Explanations
Agricultural Labor
Once an employer has 10 workers in 20 calendar weeks in the same calendar year or $20,000 in cash wages in a single calendar quarter, the wages become subject wages and the employer becomes liable for unemployment.
Aliens, Resident: Services performed outside of the United States
Wages are subject if services are performed in connection with an American vessel or aircraft and performed under contract; or the alien is employed on such a vessel or aircraft when it touches a U.S. port.
Cafeteria Plan: Deductions under Internal Revenue Code section 125
Payments are exempt unless the employee chooses cash (pre-tax). If the employee chooses another benefit, the treatment is the same as if the benefit was provided outside of the plan.
Commissions
Subject unless the worker is compensated solely by way of commission (absolutely no other cash or non-cash compensation) and is the master of their own time and effort.
Cosmetologists or Barbers
Exempt only if all of the following conditions are met: 1. practitioner is licensed; 2. contracts with a shop; 3. is free from control and direction of the shop owner; 4. owns or leases equipment; 5. receives payment from clientele and 6. acknowledges in writing that they are not covered by UI.
Dependent Care Assistance Programs: (Limited to $5,000 annually, $2,500 if married filing separately)
Exempt only to the extent that it is reasonable to believe the amounts are excludable from gross income under Internal Revenue Code section 129.
Director Fees: Fees paid to directors of a corporation for attending meetings of the board of directors
Exempt if the director performs no service other than attendance at, and participation in, the meetings.
Household Employees: Domestic service in private homes, college clubs, fraternities, and sororities
Subject if total cash wages are $1,000 or more (for all household employees combined) in any quarter in the current or preceding calendar year.
Insurance Agents or Solicitors: Full-time life insurance salesperson or other salesperson of life, casualty, or other varieties of insurance
Subject if employee is not paid solely by commissions.
Newspaper Carriers and Vendors delivering to customers
Exempt if one of the following conditions are met: 1) Newspaper carriers under age 18, or 2) newspaper and magazine vendors buying at fixed prices and retaining receipts from sales.
Non-Profit Organizations (NPO) qualifying as 501(c)(3) entities
Subject unless specifically excluded once the organization has 4 or more workers in 20 weeks in the same calendar year.
Officers or Shareholders of a Corporation including LLC electing to be taxed as a corporation
Subject where distributions and other payments made by a corporation to a corporate officer or shareholder are reasonable compensation for services to the corporation by the officer or shareholder.
Retirement and Pension Plans: Elective employee contributions and deferrals to a plan containing a qualified cash or deferred compensation arrangement (e.g., 401(k))
Generally Subject. Please see Publication 15-A of the Social Security Administration for more information on employee contributions.
State/Local Governments and Political Subdivisions (Employees of)
Subject unless specifically excluded.
