Texas Payroll Compliance Map

Email: hou4ww@evershinecpa.com
or

Contact by phone in the Texas time zone:
The Engaging Manager Ian Lin, a well-English speaker
Tel: +1-510-996-2685

WWT – United States – Texas Payroll Income Tax Deduction

WWT-US(TX)-01 WWT Tax Entity

Question from client:
Is the United States salary income tax levied in federal or states? Or both federal and states?
Are the federal and states personal income tax that levied separately? Or levied together?
What is the standard withholding tax rate?

Answer from Evershine RD:
The U.S. federal government, and state and local governments in the U.S., use the pay-as-you-go (PAYG) method, also known as the pay-as-you-earn method (PAYE), to collect taxes through deductions from employment income paid to employees that employers must timely transmit to applicable revenue agencies.

Federal
There are several withholding tables applicable for different needs.
If you have an automated payroll system, the table below works for Forms W-4 for all prior, current, and future years.
This table also suitable for any amounts of wages and any number of withholding allowances claimed.

For Example:
Percentage method tables for Automated Payroll Systems (Standard)

States – Texas

Texas does not require wage withholding by taxable entities.

WWT-US(TX)-02 Registration

Question from client:
The United States salary income tax collection is under the jurisdiction of which government unit?
The registration of the United States salary income tax collection status, that is, the application procedure for the employer withholding certificate number, paper certificate number application, or online account application? Website? Employer withholding certificate?
What is the advance certificate number of the number?
Do you need to use the industrial and commercial certificate e-card to apply?

Answer from Evershine RD:

Federal
United States payroll tax is administered under Internal Revenue Service (IRS).
Employers must have an employer identification number (EIN) before remitting forms and withheld taxes to the IRS.
Employers can apply for an EIN online using the IRS website, by calling 800-829-4933, or by faxing or mailing Form SS-4, Application for Employer Identification Number, to the IRS.
Often, the employer’s federal tax identification number is used as the state identification number.

States – Texas
The Texas Comptroller of Public Accounts is the agency authorized to administer the tax.
The Texas Workforce Commission administers the federal earned income tax credit (EITC) notification provisions.
Texas does not require wage withholding by taxable entities.

WWT-US(TX)-03 WWT Order (OD)

Question from client:
What is the order of United States salary income tax withholding declaration (information flow determines tax base) and payment (fund flow)?
Pay first and then declare? Report first and then pays?
At the same time as the declaration and payment?

Answer from Evershine RD:
Texas does not require wage withholding by taxable entities.

WWT-US(TX)-04 Mechanism of Filing (MOF)

Question from client:
United States’ salary income tax withholding declaration (information flow determines the tax base)
What is the method of account return?
Reporting cycle: every month? Every bimonthly? Every season? every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist?
If electronic filing is possible: Web site URL?

Answer from Evershine RD:

Federal
Form 941, Employer’s Quarterly Federal Tax Return, report on federal income tax, social security, or Medicare taxes for each quarter.
Forms W-2, Wage and Tax Statement, to report wages paid to employee each year.
It must be distributed to employees by Jan. 31 of the next year.
Also, file Copy A of all paper and electronic Forms W-2 with Form W-3, Transmittal of Wage and Tax Statements, to the Social Security Administration (SSA).
File Copy 1 to an employee’s state or local tax department.

To submit employment tax form, you need to purchase IRS-approved software.
The software will require your signature to e-file the return.
You need to apply for an online signature PIN.
Alternatively, you can use the authorized IRS e-file Provider Locator Service to find a tax professional to submit your forms.

States – Texas
Texas does not have an income tax withholding law that applies generally to private employers, and so Texas does not have income tax withholding provisions regarding an annual reconciliation return.
Texas employers must provide employees with the federal Earned Income Tax Credit (EITC) notice no later than March 1 of each year.

WWT-US(TX)-05 Mechanism of Payment (MOP)

Question from client:
What is the funding method for the United States salary income tax withholding payment (funding flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
Bank counter payment OCT? Or the above methods coexist?

Answer from Evershine RD:

Federal
Due date is the same as filing date. File and Pay at EFTPS via https://www.eftps.gov/eftps/.

States – Texas
Texas does not have an income tax withholding law that applies generally to private employers, and so Texas does not have income tax withholding provisions regarding deposits or returns.

BNF – Deduction of Employee Social Welfare

BNF-US(TX)-01 BNF Entity

Question from client:
United States social insurance, medical insurance, pensions, and other employee social welfare levy, is it federal? Is it states?
Or is there a federal plus states? If there is a federal and states, are they levied separately?
Or levied together? What is the withholding tax rate?

Answer from Evershine RD:
United States social security levied at both federal and states level.

Federal
The federal government enacts laws regarding social taxes under Federal Insurance Contributions Act (FICA), and unemployment taxes under the Federal Unemployment Tax Act (FUTA).
All states, the district, and territories are required to assess their own unemployment tax as part of the FUTA program.

States – Texas

BNF-US(TX)-02 Registration

Question from client:
Social Security Certificate Number? What is the name of the government agency in charge of social insurance?
Medical insurance certificate number? What is the name of the government agency in charge of medical insurance?
Pension certificate number? The name of the government agency in charge of pensions?
How to apply for the social welfare certificate number for employees in the country?
Paper certificate number application? Or online account application? Website?
Need to use the industrial and commercial certificate electronic card to apply?
Are the above three certificate numbers unified or separate?

Answer from Evershine RD:

Federal
The Internal Revenue Service (IRS) oversees collection of FICA (and FUTA) taxes while employers are required to annually report individual covered wage amounts and FICA (and FUTA) taxes withheld to the U.S. Social Security Administration (SSA).
The SSA administers the Social Security benefits program.
Employers can register for an employer identification number (EIN) through online using the IRS website, by calling 800-829-4933, or by faxing or mailing Form SS-4, Application for Employer Identification Number, to the IRS.

States – Texas
The Texas Workforce Commission administers the state’s unemployment compensation program.
All new businesses must complete and submit a status (Form C-1) report to the Texas Workforce Commission within 10 days of becoming subject to the law. This also applies to successor employers, whether newly subject or not.
Employers have the option of registering their business electronically via the commission’s website at
https://www.twc.texas.gov/businesses/unemployment-tax-registration#logonToRegisterForANewUnemploymentTaxAccount

BNF-US(TX)-03 BNF Order (OD)

Question from client:
What is the order of the withholding declaration of social welfare for United States employees (information flow determines the tax base) and payment (fund flow)?
Pay first and then declare? Report first and then pays?
At the same time as the declaration and payment?

Answer from Evershine RD:
Same Period: Report and pay at the same time.

BNF-US(TX)-04 Mechanism of Filing (MOF)

Question from client:
What is the method of reporting for withholding of social benefits for United States employees (information flow determines the tax base)?
Reporting cycle: every month? Every bimonthly? Every season? Every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist?
If electronic filing is possible: Web site URL?

Answer from Evershine RD:

Federal

Form 941, Employer’s Quarterly Federal Tax Return, report on federal income tax, social security, or Medicare taxes for each quarter.
Report FUTA taxes by filing Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return. Due by Jan 31 of the following year.
To submit an employment tax form, you need to purchase IRS-approved software.
The software will require your signature to e-file the return. You need to apply for an online signature PIN.
Alternatively, you can use the authorized IRS e-file Provider Locator Service to find a tax professional to submit your forms.

States – Texas
Report is file quarterly and due on the last day of the following month of the relevant quarter of reporting period.
Employers with up to 1,000 employees may submit the reports with Unemployment Tax Services (UTS), which is an online portal.
The reports also may be submitted electronically to the Texas Workforce Commission through the Federal/State Employment Taxes (FSET) program.
Log on to https://apps.twc.state.tx.us/UITAXSERV/security/logon.do
FSET may be used by filers that have developed software that has been certified by the workforce commission as compatible with the commission’s implementation of FSET.

BNF-US(TX)-05 Mechanism of Payment (MOP)

Question from client:
What is the funding method for United States employee social welfare withholding contributions (funds flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
Bank counter payment OCT? Or the above methods coexist?

Answer from Evershine RD:

Federal
Due date is the same as filing date. File and Pay at EFTPS via https://www.eftps.gov/eftps/.

States – Texas
Employers may pay unemployment tax with ACH credit, ACH debit or credit card transactions.
Employers that file reports with Unemployment Tax Services may pay unemployment tax with ACH debit transactions established through that portal.
ACH debit generally is the required method for paying unemployment tax in conjunction with filing tax and wage data through FSET.

Please be aware below Warning:
The above contents are digested by Evershine R&D and Education Center in October 2021.
Regulations might be changed as time goes forward and different scenarios will adopt different options.
Before choosing options, please contact us or consult with your trusted professionals in this area.

Contact Us

Houston Evershine BPO Service Limited Corp.
E-mail: hou4ww@evershinecpa.com
or

Contact by phone in the Texas time zone:
The Engaging Manager Ian Lin, a well-English speaker
Tel: +1-510-996-2685

or
For how to exchange data files between your Finance Accounting System and Evershine Cloud Accounting Information System,
please send an email to HQ4hou@evershinecpa.com
Dale Chen, Principal Partner/CPA in Taiwan+China+UK will be accountable for your case.
Email address:dalechen@evershinecpa.com
LinkedIn address:Dale Chen

Additional Information

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Email: kerrychen@evershinecpa.com
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