IRS Publication 15: Employer's Tax Guide

What Is the IRS Publication 15?

IRS Publication 15: Employer's Tax Guide is a document published by the Internal Revenue Service detailing an employer's responsibilities for filing and reporting tax information. The document covers the withholding, depositing, reporting, paying, and correcting of taxes for employees (although not for the corporation itself). IRS Publication 15 is also referred to as Circular E.

Understanding IRS Publication 15

IRS Publication 15 is used to determine federal income tax, but not state or local taxes. The Tax Guide details federal income tax amounts for payroll withholdings, including Medicare and Social Security amounts. Employers should refer to their state's tax rules to ensure that proper state income tax amounts are withheld from employees' paychecks. Extra tax information is also available in IRS Publication 15-A.

Previously, one of the most important features contained in the Employer’s Tax Guide was the Percentage Method Tables and Wage Bracket Method Tables for Income Tax Withholding. However, for the 2020 Employer's Tax Guide, these withholding tables have been removed. These tables—and the employer instructions on how to figure employee withholding—are now included in Publication 15-T, Federal Income Tax Withholding Methods. The IRS also provides an assistant on their website, called the Income Tax Withholding Assistant for Employers, to help employers figure out employee withholding.

These wage bracket tables help an employer to know exactly which percentage of their employees’ payroll they should be withholding for taxes every pay period in order to comply with federal tax regulations. In order to determine the tax withholding amount, an employee must also file a W-4 Form, which can be updated as situations change in the employee’s life, such as a new family member. In the event that an employee does not file a W-4, the Employer’s Tax Guide also details what amount to withhold instead.

How to Use IRS Publication 15

The easiest way to access IRS Publication 15 is typically online through the IRS website. The Employer’s Tax Guide contains any updates and new legislative changes pertinent to employers, along with the following sections:

• Information about Employer Identification Numbers, or EINs
• Legal definitions of employees
• Hiring and paying family employees
• Employee’s Social Security Numbers or SSNs
• Wages and other compensation details
• How to report and pay tips
• Any supplemental wages
• Payroll Periods
• Withholding from employee’s wages
• Required notice to employees about the earned income credit or EIC
• Depositing taxes
• Filing Form 941 or Form 944
• Reporting Adjustments to Form 941 or Form 944
• Federal Unemployment, or FUTA, Tax