Form 943 (2017) Checklist: Agricultural Payroll Taxes Guide Checklist

Form 943 (2017) Employer Tax Checklist

Form 943 reports the annual federal employment tax for agricultural workers. For 2017, the calculation of the Additional Medicare Tax threshold requires careful attention to the specific withholding rate (0.9%) applied to wages exceeding $200,000, regardless of filing status. Additionally, the qualified small business payroll tax credit for research activities (line 12) remains available when Form 8974 is attached.

Filing Steps

1. Verify EIN Entry and Address Changes: Enter your employer identification number in the top-right box. If your business address differs from the one listed on your prior year's return, check the address-change box. If you applied for an EIN after the tax year began, write “Applied For” and the application date in the EIN field.
2. Count Agricultural Employees as of March 12, 2017: On line 1, report the total number of agricultural employees employed during the pay period that includes March 12, 2017. Do not include household employees, persons who received no pay during the pay period, pensioners, or members of the Armed Forces. These are the only exclusions specified in the official instructions. All other agricultural workers on your payroll during this specific pay period must be counted, regardless of their seasonal status or wage amount.
3. Calculate Social Security Tax on Line 3: Multiply line 2 (total wages subject to social security tax) by 12.4% (0.124). For 2017, the social security wage base limit is $127,200. Do not report an employee’s social security wages over $127,200 for the year. Wages exceeding this annual limit for any individual employee are exempt from Social Security tax.
4. Calculate Medicare Tax on Line 5: Multiply line 4 (total wages subject to Medicare tax) by 2.9% (0.029). The Medicare tax has no wage base limit; all wages are taxable, regardless of the amount.
5. Report and Calculate Additional Medicare Tax on Line 7: On line 6, enter total wages subject to Additional Medicare Tax withholding. You must begin withholding Additional Medicare Tax in the pay period when you pay wages exceeding $200,000 to an employee, and continue withholding each pay period through the end of the calendar year. Multiply line 6 by 0.9% (0.009) on line 7. Important: Employer withholding begins at $200,000, regardless of the employee’s filing status. The variable thresholds ($200,000 for single filers, $250,000 for married filing jointly, $125,000 for married filing separately) apply to the employee’s total tax liability calculation on Form 8959, not to your withholding obligation as an employer.
6. Enter Federal Income Tax Withheld on Line 8: Report the total federal income tax you withheld from agricultural employees’ wages during 2017. Generally, you must withhold federal income tax from employees from whom you also withhold social security and Medicare taxes.
7. Complete Line 10 (Adjustments): Report any current year adjustments, including corrections for rounding of fractions of cents or adjustments for uncollected employee share of social security and Medicare taxes on third-party sick pay or group-term life insurance premiums paid for former employees. Attach supporting documentation for all adjustments. Use a minus sign (if possible) to show a decrease in amounts reported on lines 3, 5, or 7. Otherwise, use parentheses.
8. Claim Research Credit on Line 12: If you qualify for the qualified small business payroll tax credit for increasing research activities, attach Form 8974 and enter the credit amount. This credit reduces your total tax liability after all other adjustments. You must attach Form 8974 to claim this credit; the credit cannot be claimed on line 12 without the attached form.
9. Determine Deposit and Payment Obligation: If line 13 (total taxes after adjustments and credits) is less than $2,500, you may pay the full amount with your timely filed paper Form 943 return using Form 943-V. If line 13 is $2,500 or more, you must have made deposits via electronic funds transfer during 2017, as per your deposit schedule. Do not submit payment with the return.
10. Complete Monthly Liability Summary (Line 17) if Required: Complete line 17 only if you meet both of the following conditions: (a) your total taxes after adjustments and credits on line 13 are $2,500 or more, AND (b) you were a monthly schedule depositor for the entire calendar year. If you were a semiweekly schedule depositor during any part of the year, do not complete line 17; instead, complete and attach Form 943-A. The amount entered on line 17M must equal the amount reported on line 13. You qualify as a monthly schedule depositor if your total taxes after adjustments reported during the lookback period (the second calendar year preceding 2017, which is 2015) were not more than $50,000.
11. Report Deposits on Line 14: Enter total deposits made during 2017, plus any overpayment from a prior year applied to 2017, plus any amounts shown on Form 943-X (amended return) filed during 2017. Verify deposit records match your bank statements and EFTPS confirmation records.
12. Sign and Date the Return. The return must be signed under penalties of perjury by the business owner, officer, or authorized representative. Include your printed name and title. Date the return on the date you sign it. Attach all required schedules and supporting forms before filing, including Form 8974 if claiming the research credit and Form 943-A if you were a semiweekly depositor.

Year-Specific Updates for 2017

• Social Security Wage Base for 2017: The Social Security wage base limit is $127,200. After you pay $127,200 to an employee in 2017, do not withhold social security tax on any additional amounts paid to that employee during the remainder of the calendar year.
• Additional Medicare Tax Rate and Threshold: The Additional Medicare Tax withholding rate is 0.9% for 2017. Employers must withhold this tax on wages paid to an employee in excess of $200,000 in a calendar year, without regard to the employee’s filing status. While employees face different thresholds for their total tax liability based on filing status ($200,000 for single, $250,000 for married filing jointly, $125,000 for married filing separately), these variable thresholds do not affect your withholding obligation. You must begin withholding at $200,000 for all employees. These thresholds are permanent under current law and are not indexed for inflation.
• No EIP or Unemployment Exclusion Adjustments: Form 943 for 2017 does not address Economic Impact Payment reconciliation, unemployment compensation exclusions, or expanded credits introduced in later tax years. Filers must use only 2017 wage and tax data without adjustments for provisions enacted after 2017.
• Form 943-V Payment Voucher Required for Certain Payments: If you make a payment with your paper Form 943 (only when line 13 is less than $2,500 and you are paying in full with a timely filed return), you must complete and detach Form 943-V. Do not staple the voucher or your check to Form 943 itself; include them loosely in the envelope.
• Semiweekly Depositor Line 17 Exemption: If you were a semiweekly schedule depositor during any part of 2017, do not complete the monthly liability breakdown on line 17 (lines A through L and total on line M). Instead, complete Form 943-A and attach it to your return. The instructions explicitly state: “If you were a semiweekly schedule depositor during any part of the year, don’t complete line 17. Instead, complete Form 943-A.”
• Form 8974 Attachment for Research Credit: The qualified small business payroll tax credit for increasing research activities (line 12) requires Form 8974 to be attached to Form 943. Without Form 8974 properly completed and connected, the credit cannot be claimed on line 12. This credit is available for calendar year 2017 filings and represents the first Form 943 on which this credit can be claimed.
• Filing Deadline and Extension for Timely Deposits: For 2017, file Form 943 by January 31, 2018. However, if you made all required deposits on time and in full payment of the taxes due for the year, you may file the return by February 12, 2018. This 10-business-day extension applies only when deposits were made in a timely and correct manner throughout 2017.

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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.