Reporter
Winter 2005
A Newsletter
for Employers
Social Security
Administration
Internal
Revenue Service
SSA / I RS
Department of the Treasury
Internal Revenue Service
w w w . i r s . g o v
Publication 1693 (Rev.12-05)
Catalog Number 15060W
continued on page 2
Inside
this Issue...
Social Security Unveils
2005 Enhancements for
Electronic Services
page 2
Form 990 e-file for
Charities and Non-Profits
page 2
Important News About
Electronic Payments
page 3
W-2 e-filing Option
for Small Businesses
page 3
Reminders for a
Successful Year-End
page 4
Verify Workers’ Social
Security Numbers Online
page 5
W-2 Test Software
Now Available
(AccuWage and AccuW2c)
page 5
IRS Electronic Payment
Program Includes Options
for Businesses of All Sizes
page 5
Adhering to the
New Hire Reporting
Program has Benefits
page 5
Know the Tax
Consequences of Providing
Equipment to Employees
page 6
Social Security has announced the increase for 2006 in the
maximum amount of earnings subject to the Social Security tax.
The Social Security wage base will be $94,200, up from $90,000
in 2005. Beginning January 1, 2006, employers should withhold Social
Security taxes (6.2 percent) from employees’ wages up to $94,200 and
withhold the Medicare tax (1.45 percent) on all wages. Employers must
match the tax payments withheld from employees’ wages.
In 2006, employees will earn one Social Security credit for each $970
in earnings, up to a maximum of four credits for the year. And the full
retirement age for people born in 1941 is now 65 years and 8 months.
However, when employees reach full retirement age, they can work and
receive unreduced Social Security retirement benefits. Social Security
also announced that benefit amounts will increase in 2006 by 4.1 percent.
If your employees are less than full retirement age when they begin
to receive benefits, they can earn more in 2006 without their benefits
being reduced. These provisions are:
1. Social Security beneficiaries who haven’t reached full retirement
age can earn $12,480 before their ben