Federal Income Tax

Federal income tax (FIT) is a tax levied by the United States government on the annual earnings of employees. It is a progressive tax, meaning that the rate increases as income increases. Employers are responsible for withholding federal income tax from employees' wages and remitting it to the IRS on their behalf. Employees' federal income tax liability is based on their taxable income and filing status.

Employers are required to withhold federal income tax from employees' paychecks based on information provided on their Form W-4. This information is then used for a series of calculations to determine the federal withholding amount deducted from the employee’s check.

Additionally, FIT is determined based on the frequency an employee is paid. An employee receiving $1,000.00 per pay period, paid weekly, will have a $52,000.00 annual income. An employee receiving $1,000.00 per pay period, paid bi-weekly, will have a $26,000.00 annual income. In those scenarios, the weekly employee would have more FIT withheld based on the total expected annual salary.

Check deposits federal taxes based on the frequency that is added in Console. There are two frequencies available - monthly and semiweekly. These schedules tell Check when a deposit is due after a tax liability arises. The tax liability is based on the dates payments were made or wages were paid.

For semi-weekly depositors, the following table is used:

If the federal liability for a period exceeds $100,000.00, Check will deposit those funds the next business day.

Federal income tax is listed in Console under the taxes tab under Federal. Federal taxes are added to an employer profile once the Federal Employer Identification Number (FEIN) is added to Check.

There can be instances where an employee does not have enough wages to reach the amount needed for federal income tax to be withheld. Additionally, employees can claim "Exempt" on their W-4 to not have any FIT withheld. When an employee claims exempt, wages will still be reported on Form W-2 in Box 1.

If there is ever concern for withholding, please create a Support ticket and Check can verify.

Federal income tax, social security and medicare are reported quarterly on Form 941. This can be found in Console under the Documents tab.