Tax Topic #903 |
2008 Tax Year |
Topic 903 - Federal Employment Tax in Puerto Rico
Employers in Puerto Rico are subject to the taxes imposed by the Federal
Income Contribution Act (FICA) (Social Security and Medicare taxes) and the
Federal Unemployment Tax (FUTA). An employer is a person or organization for
whom a worker performs services as an employee. As an employer you are required
to withhold, report, and pay employment taxes.
To file the various employment tax returns, you need an Employer Identification
Number (EIN). To obtain an EIN you need to file Form SS-4PR (PDF).
FICA taxes are used to finance the Social Security and Medicare systems.
You must withhold FICA taxes from your employees' salary and contribute your
employer's share. The FICA taxes consist of two components: the Social Security
tax and the Medicare tax.
The forms used to file the Social Security and Medicare taxes in Puerto
Rico are: Form 941-PR (PDF), Form 943-PR (PDF), Form 944-PR,
and Form 1040-PR (Anexo H-PR) (PDF)for household
employers.
If you are not an agricultural employer and all of your employees are bona
fide residents of Puerto Rico, file Form 941–PR to report all salaries
paid, tips your employees reported to you, and Social Security and Medicare
taxes you withheld. This tax return is filed quarterly and is due the last
day of the month following the end of the quarter. For example, wages you
paid January through March (the first quarter of the year) must be reported
on Form 941–PR by April 30.
If you are not an agricultural employer and all of your employees are bona
fide residents of Puerto Rico and you were notified to file Form 944-PR, file
Form 944-PR to report all salaries paid, tips your employees reported to you,
and Social Security and Medicare taxes you withheld. This tax return is filed
annually and is due the last day of January following the end of the tax year.
Do not file Form 944-PR unless notified by the IRS to do so.
If you think you are eligible to file Form 944-PR but did not receive a
notification from the IRS advising you to change to the 944-PR annual filing
requirement, please call the IRS at 800-829-0115 so we can establish you as
a Form 944-PR filer.
Most employers are required to deposit their employment taxes before Form
941–PR is filed. If you are filing Form 944-PR, you may be able to pay
your employment taxes with your return. For additional information about Form 941-PR, refer to Topic 758, in English. For more information about the Form
944-PR, refer to the Form
944–PR Instructions in Spanish. For information about the rules
to make deposits, refer to Topic 757, in English.
Household EmployeesIf you pay a household employee cash wages, you may be required to withhold
and pay FICA taxes on all wages you pay to that employee. To see if you are
required to withhold and pay these taxes, see Publication 926 (PDF), Household Employer's Tax Guide, in English.
File Form 1040-PR (Anejo H-PR) (PDF) to report
and pay Social Security and Medicare taxes corresponding to the employer and
the employee for all household employees.
Household employees include housekeepers, maids, baby-sitters, gardeners,
and others who work in or around your residence as your employee. Repairmen,
plumbers, contractors, and other business people who are self-employed and
own their equipment and control how the work is performed, normally are not
considered household employees
Agricultural EmployeesIf you are an agricultural employer in Puerto Rico, you must file Form 943-PR (PDF) to report the employer's and the employee's
share of the FICA taxes for agricultural employees. To see if you are required
to withhold and pay FICA taxes on your agricultural employees, refer to Publication 51, Agricultural Employer's Tax Guide, in English.
Form 943–PR is an annual return you file at the end of each calendar
year and is due January 31. Most employers are required to deposit their employment
taxes and taxes withheld before the Form 943–PR is filed.
Publications 15 and 179 (Spanish version) explain the requirements
for deposits.
Federal Unemployment Taxes (FUTA):If you are an employer in Puerto Rico, you might have to file a Federal
Unemployment Tax Return. To see if you are required to pay FUTA taxes, refer
to Publication 51 if you are an agricultural employer or Publication 926 (PDF) if you are a household employer.
All other employers should refer to Publication 15 or Publication 179 (Spanish
version). With the exception of those who use Schedule H-PR (Form 1040) for
household employees, employers in Puerto Rico who are subject to FUTA are
required to file Form 940–PR to report and pay unemployment taxes. Form 940-PR (PDF) is generally due by January 31. Most employers
are required to deposit unemployment taxes. FUTA taxes are not withheld from
the employee' salaries.
Page Last Reviewed or Updated: December 22, 2008
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