What IRS Form 943 (2017) Is For

IRS Form 943 (2017) is the Employer’s Annual Federal Tax Return for Agricultural Employees, used by agricultural employers to report federal income tax withholding, Social Security, and Medicare taxes on wages paid to farmworkers. It applies to employers meeting the $150 individual or $2,500 total wage tests for agricultural labor. 

The form identifies the business using an employer identification number (EIN) and ensures accurate reporting of both employer and employee portions of Social Security and Medicare taxes. It covers operations on farms, ranches, truck farms, and similar structures, including reporting wages paid to foreign agricultural workers under H-2A visa programs.

When You’d Use IRS Form 943 (2017)

You would use IRS Form 943 (2017) when filing a late or amended return for the 2017 calendar year, especially when compliance or reporting errors are identified.

• Late filing situations: You must file IRS Form 943 (2017) if you failed to submit the original return by the official due date of January 31, 2018, or by February 12, 2018, if all payments and deposits were made on time.
  
  
• Amended filing with Form 943-X: You should use Form 943-X when corrections are needed to fix errors related to federal income tax withheld, wages paid, or Medicare taxes on the previously filed return.
  
  
• Triggered by IRS notices: You may be required to file after receiving IRS notices such as CP161 or CP501 showing unpaid tax balances, missing employment tax filings, or other discrepancies in reported amounts.
  
  
• Correcting employee information: You must file an amended return to correct mistakes in reporting employee names, taxpayer identification numbers, or income tax withholding amounts.
  
  
• Business transition or discovery: You may also need to file when a business operation changes ownership, merges, or discovers unfiled forms during a compliance review or internal audit.

Key Rules or Details for 2017

Understanding these 2017 rules ensures accurate employment tax reporting and prevents penalties.

• Social Security wage base: The wage base was $127,200, so any employee’s wages above that were not subject to Social Security tax.
  
  
• Tax rates: Both employers and employees paid Social Security tax at 6.2% and Medicare tax at 1.45%, with higher earners owing the Additional Medicare Tax.
  
  
• Filing deadlines: The due date was January 31, 2018, or February 12 if all federal income tax deposits were made on time.
  
  
• Research payroll credit: Employers could claim the small business payroll tax credit for research using Form 8974 attached to Form 943.
  
  
• H-2A visa workers: Wages for foreign agricultural workers under H-2A visas were reported on Form W-2 but excluded from Social Security and Medicare taxes.
  
  
• Deposit schedule: Employers with over $50,000 in tax liability followed the semiweekly deposit schedule, while smaller employers deposited monthly.
  
  
• Identification accuracy: Each filer needed a valid employer identification number and accurate figures matching IRS income tax records.

Step-by-Step (High Level)

The following steps outline how to prepare and submit the form correctly.

• Gather and verify records: Collect prior-year wage reports, deposit records, and tax liability summaries; request transcripts from the IRS if you need to confirm previously reported data.
  
  
• Use the correct-year form: Complete the official 2017 version of Form 943 to ensure all figures correspond with the right calendar year and tax provisions.
  
  
• Attach required schedules: Include Form 943-A if you follow a semiweekly deposit schedule and attach Form 8974 if you claimed the small business research credit.
  
  
• Report all wages paid: Accurately list employees’ wages, federal income tax withheld, and Social Security and Medicare tax obligations for each employee.
  
  
• Submit the form and payment: File the completed return by mail or electronically. Include full payment for any unpaid tax using approved money orders or the Electronic Federal Tax Payment System (EFTPS).
  
  
• Maintain proper records: For tax purposes, keep copies of all forms, payments, and acknowledgments, ensuring they remain accessible for future audits or compliance checks.
  
  
• Confirm receipt and accuracy: Review all IRS confirmations to verify that your business account shows the return as filed and that any balance due has been appropriately applied.

Common Mistakes and How to Avoid Them

Filing errors in IRS Form 943 (2017) can result in penalties, processing delays, or rejected returns. Understanding and avoiding these common issues will help maintain compliance with IRS filing requirements.

• Using the wrong form: Always file Form 943 instead of Form 941 when reporting wages paid to agricultural employees for agricultural labor and other services performed in farm operations.
  
  
• Incorrect wage threshold application: Apply the $150 per-worker and $2,500 total wage tests correctly to determine whether your employment taxes apply for the calendar year.
  
  
• Errors with deposit schedules: Review your previous year’s tax liability to determine whether you must follow a monthly or semiweekly deposit schedule. If required, make all deposits by the next business day.
  
  
• Failing to report H-2A workers correctly: Report foreign agricultural workers with H-2A visas on Form W-2 but exclude them from Social Security and Medicare taxes to comply with federal rules.
  
  
• Ignoring final return requirements: Check the final return box when ending your business operations or clearing land, and identify who will maintain payroll records to meet IRS documentation standards.
  
  
• Incorrectly classifying workers: To avoid incorrect tax liability, use the IRS standard law test to determine whether each individual is an employee or an independent contractor.

What Happens After You File

Once IRS Form 943 (2017) is filed, the IRS generally processes the return within six to eight weeks. Late filings may take longer due to additional compliance reviews or unpaid tax verification. The IRS sends acknowledgment letters confirming receipt or notices detailing any balance due, including failure-to-file and failure-to-pay penalties. Interest continues to accrue on overdue taxes until full payment is made. Retain all copies of filed forms, money orders, and payments as proof of compliance in case of reasonable cause review or audit inquiries.

FAQs

How does federal income tax withholding work for agricultural employees?

Employers must withhold federal income tax from paid wages to agricultural employees who perform such service in producing or handling agricultural or horticultural commodities. This ensures proper reporting and payment of all employment taxes related to their farm labor.

Are Medicare taxes required for agricultural workers?

Employers and employees generally pay Medicare taxes on wages earned for producing agricultural or horticultural commodities in their raw or natural state, unless the workers are exempt under specific visa or wage provisions.

Who qualifies as an agricultural employee under IRS Form 943 (2017)?

Agricultural employees include individuals performing services such as cultivating soil, raising livestock, or harvesting agricultural or horticultural commodities while they remain unmanufactured or raw before any processing services are applied.

Do all paid wages to farmworkers require reporting on Form 943?

Yes, all wages paid to employees performing agricultural labor involving agricultural or horticultural commodities in a raw or natural state must be reported unless the employment meets specific exemption conditions under IRS rules.