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Guidance for Special Types of BusinessesRules for Businesses in Certain Industries/Market Segment Specialization Program Guides (MSSP)/Market Segment Understandings (MSU)Farming Agricultural Employees Social Security and Medicare Taxes Generally, you must withhold social security and Medicare taxes on all cash wage payments you make to your employees. The $150 Test or the $2,500 Test All cash wages you pay to an employee during the year for farmwork are subject to social security and Medicare taxes and income tax withholding if either of the two tests below is met: You pay cash wages to an employee of $150 or more in a year for farmwork (count all cash wages paid on a time, piecework, or other basis). The $150 test applies separately to each farmworker you employ. If you employ a family of workers, each member is treated separately. Do not count wages paid by other employers. The total you pay for farmwork (cash and noncash) to all your employees is $2,500 or more during the year.
Publication 51 Circular A, Agricultural Employer s Tax Guide |