Withholding tax is money an employer withholds from an individual’s paycheck and sends to the Tax Commission as a pre-payment toward that individual’s income tax liability.
Because withholding tax is a trust fund tax, an employer must keep the withheld money safe until it is sent to the Tax Commission.
Any employer doing business in Utah and paying wages to an individual must withhold wages and obtain a withholding account from the Tax Commission.
An employer may be exempt from withholding if they do business in Utah for 60 days or less during a calendar year. Advance approval from the Tax Commission is required. See Publication 14, Withholding Tax Guide, for more information.
Wages are payments or compensation for services performed by an employee for an employer. This includes payments in a form other than cash.
Utah defines wages by the Internal Revenue Code Section 3401(a).
Utah uses the definition outlined in IRS Publication 1779, Independent Contractor or Employee.
Employers can get a withholding tax account (license) by:
There is no fee for a withholding tax account. However, if you have a history of filing or paying taxes late, you may have to post a surety bond.
You need a federal EIN if you are required to report employment taxes or give tax statements to employees. You can request an EIN with the Online EIN Application at www.irs.gov.
The amounts to be withheld are based on the employee's federal W-4 form and the Utah income tax withholding tables in Publication 14, Withholding Tax Guide.
Your filing frequency is quarterly unless you report household employment taxes on Schedule H of your federal form 1040 or file form 944, Employer’s Annual Federal Tax Return, in which case you file annually.
Your payment frequency is determined by the amount you withhold, as follows:
|If you:||Your payment frequency is:|
|Withhold $1,000 or more per month||Monthly|
|Withhold less than $1,000 per month||Quarterly|
|Report household employment taxes on Schedule H of your federal form 1040 or file form 944, Employer’s Annual Federal Tax Return||Annually|
The following table summarizes withholding due dates depending on your filing status.
|Due Date||All Employers||Monthly Payers||Quarterly Payers||Annual Payers|
|January 31||Give forms W-2 and 1099 to employees and payees||File December return (TC-941)
Pay December withholding (TC-941PC)
|File and pay fourth quarter withholding (TC-941 and TC-941PC)||File and pay annual withholding (TC-941 and TC-941PC)|
|February 28||Paper Filers – File annual reconciliation TC-941R with withholding form copies.||Pay January withholding (TC-941PC)|
|March 31||Electronic Filers – File annual reconciliation TC-941R with withholding form copies.||Pay February withholding (TC-941PC)|
|April 30||File first quarter return (TC-941)
Pay March withholding (TC-941PC)
|File and pay first quarter withholding (TC-941 and TC-941PC)|
|May 31||Pay April withholding (TC-941PC)|
|June 30||Pay May withholding (TC-941PC)|
|July 31||File second quarter return (TC-941)
Pay June withholding (TC-941PC)
|File and pay second quarter withholding (TC-941 and TC-941PC)|
|August 31||Pay July withholding (TC-941PC)|
|September 30||Pay August withholding (TC-941PC)|
|October 31||File third quarter return (TC-941)
Pay September withholding (TC-941PC)
|File and pay third quarter withholding (TC-941 and TC-941PC)|
|November 30||Pay October withholding (TC-941PC)|
|December 31||Pay November withholding (TC-941PC)|
Note: If the due date falls on a Saturday, Sunday or legal holiday, the payment is due on the next business day.
The Tax Commission reviews accounts annually and notifies businesses in writing if the filing frequency changes.
You will receive a withholding packet within 30 days of opening a new withholding account. The packet contains all withholding returns and payment coupons you will need for the year depending on your filing and paying frequency.
You may file your withholding returns online at taxexpress.utah.gov or by submitting a completed paper form.
A valid FEIN and assigned withholding account ID number must be on each return.
Returns are due the last day of the month following the period end (for example, returns for annual filers are due January 31). If a due date falls on a Saturday, Sunday, or legal holiday, the due date becomes the next business day. See Publication 14, Withholding Tax Guide, for specific dates.
Pay your tax liabilities using any of the following methods:
No. You must still file a return by the due date.
You must file a return even if you didn’t have any withholding for the period. Enter zeros on the return and send it to the Tax Commission. You can file a zero return electronically at taxexpress.utah.gov.
If you need to correct a previously filed return, use form TC-941 and put an “X” on the amended line on the form. An amended return replaces the previously filed return. Enter the amounts that should have been on the original return (not the differences).
Withholding reconciliations can be filed:
The reconciliation is due February 28 if filed on paper or March 31 if filed electronically. If a due date falls on a weekend or holiday, the reconciliation is due the next business day.
In March 2009, the Tax Commission began issuing new withholding tax account numbers to all active withholding tax accounts. The new account numbers are 14 characters (12345678-002-WTH). You must use your 14-character number beginning January 1, 2010.
If you stop doing business in Utah, you should close your account using form TC-69C, Notice of Change for a Tax Account. If you do not notify the Tax Commission, you will be assessed an estimated tax, including late penalties and interest.