IRS Publication 15-A

An IRS guide on employer tax obligations, worker classification, and withholding.

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IRS Publication 15-A is a supplemental guide issued by the Internal Revenue Service that provides employers with detailed information on specific payroll tax topics that go beyond the scope of the standard Employer's Tax Guide. It covers areas such as the classification of workers, special wage and withholding rules, and the treatment of various types of employees and compensation arrangements.

In depth

One of the most critical topics covered in Publication 15-A is the distinction between employees and independent contractors. Misclassifying workers is one of the most common and costly payroll compliance mistakes a business can make, resulting in back taxes, penalties, and interest. The publication provides detailed criteria for determining whether a worker should be classified as an employee subject to withholding and payroll taxes, or as an independent contractor responsible for their own self-employment taxes. It also covers the treatment of statutory employees and statutory non-employees, which are specific worker categories that sit between the two main classifications.

Publication 15-A also addresses supplemental wages such as bonuses, commissions, and severance pay, explaining the different withholding methods available for these types of compensation. For businesses with complex payroll arrangements, multiple types of workers, or employees receiving non-standard forms of compensation, Publication 15-A is an important reference that helps ensure payroll tax compliance. While the publication is detailed and comprehensive, businesses with significant payroll complexity are generally advised to work with a CPA or payroll specialist to interpret and apply its guidance correctly in their specific circumstances.