Federal Tax Guide for Employers in the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands, Publication 80 (2023)

Publication 80 is an IRS guide that details tax-related information for employers in U.S. territories like the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands. It covers topics such as payroll taxes, credits, and reporting requirements.

What's New in Payroll Tax for 2023

Social Security and Medicare Tax Rates

  • Social security tax on taxable wages is 6.2% each for the employer and employee.
  • Medicare tax rate remains at 1.45% for both the employer and employee.
  • No wage base limit for Medicare tax; social security wage base limit is $160,200.

Qualified Small Business Payroll Tax Credit

  • For tax years before January 1, 2023, eligible small businesses can claim up to $250,000 credit for increasing research activities.
  • Inflation Reduction Act of 2022 increases the credit amount to $500,000 for tax years starting after December 31, 2022.
  • Election and determination made on Form 6765, reported on Form 8974.
  • Credit used against payroll taxes in the first calendar quarter after filing income tax return.

Changes in Payroll Tax Credit Usage (Starting Q1, 2023)

  • Payroll tax credit used to reduce employer share of social security tax up to $250,000 per quarter.
  • Any remaining credit reduces employer share of Medicare tax.
  • Excess credit carried forward to the next quarter.

Discontinuation of Forms and Publications After 2023

  • Forms 941-SS and 941-PR will no longer be available after the fourth quarter of 2023.
  • Publications 80, 51, and 179 will be discontinued after 2023.

Important Dates and Responsibilities

  • January 31: File Form 941-SS or Form 944, furnish Forms 1099 and W-2.
  • April 30, July 31, October 31, January 31: Deposit FUTA taxes, file Form 941-SS if applicable.

Other Updates and Reminders

  • Federal employers in the Commonwealth of the Northern Mariana Islands (CNMI) must withhold and pay social security and Medicare taxes.
  • Employers must receive written notice from the IRS to file Form 944.
  • Use electronic funds transfer (EFT) for federal tax deposits.
  • Recordkeeping requirements for employment taxes and documentation for tax credits claimed.
  • Private delivery services (PDS) and electronic filing/payment options.

For the current year's Publication 80, click here.