Social Security and Medicare Taxes All cash wages you pay to an employee during the year for farm workare subject to social security and Medicare taxes if you meet eitherof the following tests. You pay the employee $150 or more in cash hoteles Tallinnwagesduring the year for farm work (the $150 test). You pay cash and noncash wages of $2,500 or more during theyear to all your employees for farm work (the $2,500 test). If the $2,500 test for the group is not met, the $150 test for anindividual still applies. See Table 16-1 at the end of this chapter. Exceptions.The following wages are not subject to social security and Medicaretaxes, even if you pay $2,500 or more to all your farm workers. Thesewages, however, do count toward the $2,500 test for determiningwhether other farm worker's wages are subject to social security andMedicare taxes. Annual cash wages of less than $150 paid to a seasonal farmworker. A seasonal farm worker is one who: Works as a hand-harvest laborer, Is paid piece rates in an operation usually paid on thisbasis in the region of employment, Commutes daily from his or her permanent home to the farm,and Worked in agriculture less than 13 weeks in the precedingcalendar year. Annual cash wages of less than $1,300 paid to your householdemployee. See Circular A for more information on these exceptions. SeeFamily Employees, earlier, for certain exemptions fromsocial security and Medicare taxes that apply to your child, spouse,and parent. Table 16-1. Religious exemption.An exemption from social security and Medicare taxes is availableto members of a recognized sect opposed to insurance. This exemptionis available only if both the employee and the employer are members ofsuch a sect. For more information, see Publication 517, Social Security andOther Information for Members of the Clergy and Religious Workers. Cash wages.Cash wages paid to farm workers are subject to social security tax,Medicare tax, and income tax withholding. Cash wages include checks,money orders, and any kind of money or cash. Only cash wages subject to social security and Medicare taxes arecredited to your employees for social security benefit purposes.Payments not subject to these taxes, such as commodity wages, do notcontribute to your employees' social security coverage. Forinformation about social security benefits, contact the SocialSecurity Administration. Internet users can go to www.ssa.govfor more information. Noncash wages.Interlaken alberghi offerte stagionaliNoncash wages include food, lodging,clothing, transportation passes, and other goods and services. Noncashwages, including commodity wages, are not subject to social securityand Medicare taxes. However, they areblack jack online subject to thesetaxes if the substance of the transaction is a cash payment. Report the value of noncash wageson Form W-2 in box 1,Wages, tips, other compensation, together with cash wages.Do not show noncash wages in box 3, Social security wages,or in box 5, Medicare wages and tips. discount hotels in TurinTax rates and social security wage limit.For 2001, the employer and the employee will each pay: 6.2% of cash wages for social security tax (old-age,survivors, and disability insurance), and 1.45% of cash wages for Medicare tax (hospitalinsurance). Wage limit.The maximum amount of 2001 wages subject to the social security taxwill be published in Circular A. There is no limit on wages subject tothe Medicare tax. All covered wages are subject to the tax. Paying employee's share.If you would rather pay the employee's share of social security andMedicare taxes without deducting it from his or her wages, you may doso. If you do not deduct the employee's share, you must still pay it.It is additional income to the employee. You must include it on theemployee's Form W-2 in box 1, but do not count it as socialsecurity and Medicare wages (boxes 3 and 5 on Form W-2) or aswages for federal unemployment (FUTA) tax purposes. Example.Jane operates a small family fruit farm. She employs day laborersin the picking season to enable her to timely get her crop to market.She does not deduct the employees' share of social security andMedicare taxes from their pay; instead, she pays it on their behalf.When her accountant, Susan, prepares the employees' Forms W-2, sheadds each employee's share of social security and Medicare taxes paidby Jane to the employee's wage income (box 1 of Form W-2), but doesnot include it in box 3 (social security wages) or box 5(Medicare wages and tips).