01.09.06 - Taxes and Insurance

Taxes and Insurance (01.09.06/01-2011)

Employer Tax Responsibilities

General Guidance

As employers and non-profit 501 (c)(3) organizations, IMSHS delegate agencies are subject to certain monthly, quarterly, and annual tax requirements. The tax chart, which follows this section details:

  1. The federal and state forms required;
  2. Where to obtain them;
  3. Delegate persons responsible for completion and filing;
  4. Filling due dates and locations; and
  5. Supplemental publications/instructions which each delegate agency should obtain, and which may be of some help.

IMSHS delegate agencies are subject to federal income tax withholding and social security tax. This means these two taxes must be withheld from employees' pay and the agency must make monthly and/or quarterly federal tax deposits and employer-share contributions to social security. Each agency should order the new "Circular E-Employers Tax Guide" every December/January, if not received from IRS, for tax tables and specific guidance on withholding.

IMSHS delegate agencies are exempt from, and are not subject to paying, the Federal Unemployment Tax (FUTA).

General guidelines and contacts are as follows, for help in ordering, completion of and filing the forms on the Tax Forms chart:

  1. Use your agency's FEIN (Federal Employer Identification Number) on all correspondence and forms.
  2. If you must order forms, allow at least 5-7 days when ordering by phone and 5-6 weeks when ordering by mail.
  3. Keep all records of employment taxes for at least four (4) years. These should be available for IRS review and should include:
    • Your employer identification number;
    • Amounts and dates of all wage payments;
    • Names, addresses, social security numbers, and occupations of employees;
    • Dates of employees' employment;
    • Periods while employees were paid while absent due to sickness and injuries, and the amount and weekly rate of payments you or third-party payers made to them;
    • Copies of employee's income tax withholding allowance certificates;
    • Dates and amounts of tax deposits you made; and
    • Copies of returns filed.
  4. Be sure to use current year W-4 forms for all employees.
  5. Sick pay is treated the same as regular wages for withholding and reporting purposes.
  6. Certain W-4 forms must be sent to IRS at the end of the quarter with Form 941. See page 7, Section 10 in the IRS Circular E for the two special conditions.
  7. Penalties - it is extremely important for the IMSHS delegate agency to pay strict attention to deadlines/due dates for depositing taxes and filling returns, both quarterly and annually. While the penalties can, in special situations, be billed to the IMSHS in the General Revenue Fund (GRF), reimbursement will not be allowed for carelessness or inefficiency. In the cases where IMSHS does not reimburse the delegate for a tax penalty, the Board of Directors will be reliable. Tax penalties are high; knowledge about what is due and when is the responsibility of the board and the center director, as the employers. NOTE: If any due date falls on a Saturday, Sunday, or a legal holiday, use the next regular work day for depositing taxes, and for your deadline on filing returns.
  8. Unresolved Problems:
    1. IRS has a Problem Resolution Program for taxpayers who have been unable to resolve their problems with IRS. If you have a tax problem you have been unable to resolve through normal channels, write to your local IRS district director or call your local IRS office and ask for the Problem Resolution Assistance office.
    2. Illinois Department of Revenue (101 West Jefferson Street, Springfield, IL 62702) also has a Problem Resolution number for resolving problems with state income tax deposits or forms (217) 785-7313.
    3. It is best when filing returns and making deposits, to allow yourself enough time to thoroughly review the instructions to each form, and also consult the IRS Circular E or the IL 700 Booklet. Should you need further assistance with this process, contact either the IMSHS Director or Accountant in Springfield and they can put you in touch with another delegate agency who may be more experienced.

My center's local IRS office is (Address):


Contact Person (District Director):