The Catholic University of America

Responsibilities of the Payroll Director

Federal and State Payroll Tax Withholding and Reporting

 

The University must collect income tax from employees in an amount determined by the Internal Revenue Service (IRS) and state tax tables. A form W-4 and state equivalent (e.g.: DC's Form D-4; VA Form VA-4; MD Form MW 507) is required for every employee to determine withholding exemptions and the mailing addresses for the Forms W-2. 

 

Employees claiming exemption from federal or state withholding must complete and submit an updated W-4 and state equivalent by February 15th or withholding will revert to the highest amount. Full-time students are eligible for FICA exemption under certain circumstances.

 

The Employer's Quarterly Federal Income Tax Return (Form 941) is due at the end of the month following the end of each quarter.  The return includes the total compensation paid, the taxes withheld (including FICA), and payments made.  [Note:  501(c)(3) income tax exempt organizations are exempt from the Federal Unemployment Tax Act (FUTA), otherwise reportable on Form 940]. By January 31st of the succeeding calendar year in which wages were paid to an employee, the University must furnish the employee with a Form W-2.  The University must transmit W-2 information to the IRS, along with a W-3 transmittal form, by February 28th, or March 31st if filed electronically.  NOTE:  Per the Patient Protection and Affordable Care Act (PPACA), effective in 2012 employers must report in the W-2 the amount of health care coverage provided to the employee.

 

The Payroll Director is responsible for the following with respect to payroll tax withholding and reporting:

 

The collection and maintenance of withholding certificates from each employee of the University

 

Remitting Payroll taxes to the District of Columbia (monthly) on Form FR-900M by the 20th of the month following the month being reported

 

Remitting payroll taxes to Virginia, Maryland and the federal government after each pay period

 

Filing the Employer's Quarterly Tax Return for US, D.C., MD and VA (Federal Form 941 for U.S.)


Filing
Form 1042-S (the Foreign Person's U.S. Source Income Subject to Withholding) annually

 

Maintaining records of employee payments, taxes withheld, and payments to state unemployment compensation funds for four years from date the tax return is due or paid, whichever is later

 

Filing Annually the W-3 (Transmittal of Wage and Tax Statements to the Social Security Administration) per The Social Security Act (FICA)

 

D.C. Wage Payment and Wage Collection Law

D.C. law requires covered employers to regularly and promptly pay their employees the agreed upon wage at least twice each month on a regular schedule designated in advance, with some limited exceptions. The Payroll Director is responsible for compliance with these requirements.

D.C. Unemployment Compensation Act

The Act provides for the establishment of an Unemployment Compensation Fund financed by contributions from employers in the District of Columbia and serves as a source of payments to eligible individuals. The Payroll Director is responsible for filing the quarterly Contribution and Wage Report to the DC Government. The Payroll Director is responsible for filing this report.

Tax Reporting of Personal use of University-Owned Autos

 

Usage of an employer-provided automobile is a fringe benefit that must be documented and may be included in the employee’s gross income and taxable as wages.  The Payroll Director is responsible for tax reporting under this regulation.

 

Employee Retirement Income Security Act of 1974 (ERISA) - Department of Labor Rules for Pension Withholding and Remittance

The University must transmit employee contributions to pension plans as soon as they can reasonably be segregated from the general assets.  The Payroll Director is responsible for transmitting the contributions.

Taxpayer ID Numbers and Requirements to Furnish to the Internal Revenue Service

 

Every U.S. person who files a return, statement, or other document under the tax code must furnish a TIN as required by the forms and the accompanying instructions. A U.S. person whose TIN must be included on a document filed by another person must give the TIN so required to the other person on request. The following foreign persons must furnish TINs:

 

Aforeign person who has income effectively connected with the conduct of a U.S. trade or business at any time during the taxable year

A foreign person who has a U.S. office or place of business or a U.S. fiscal or paying agent at any time during the taxable year

A nonresident alien treated married to a U.S. citizen or resident and filing a joint return

A foreign person who files a tax return that involves payment of taxes or a refund claim

A foreign person making an express election under the code to be classified as a partnership or association

A foreign person who furnishes a withholding certificate

The Payroll Director is responsible for ensuring filing of necessary ITINs.

Consumer Credit Protection Act (CCPA) – Garnishments

The maximum part of an employee's total disposable earnings subject to garnishment in any workweek may not exceed the lesser of 25% of disposable earnings for that week or the amount by which disposable earnings for that week exceeds 30 times the federal minimum wage rate in effect at the time the earnings are payable. An employee may not be terminated because of a garnishment. 

DC Attachment and Garnishment of Wages and Employee Garnishment Act of 1977

If served with a wage attachment for an employee to whom wages are owed, the University must pay the creditor the specified percentage within 15 days after close of the last pay period, and must continue to do so until the attachment is wholly satisfied. 

Related Policies

Payroll Deduction Policy

 

Tax Compliance Policy

 

Unclaimed Payroll Check Policy