What Every Business Owner Needs to Know Before Hiring Seasonal or Part-Time Help

Summer is one of the busiest hiring seasons for small businesses. Whether you are bringing on a few extra hands for the summer rush, adding part-time staff to cover weekend shifts, or hiring seasonal workers to get through a peak period, the IRS does not treat these employees any differently than your full-time staff when it comes to taxes. That is something a lot of business owners get wrong and it can cost them.

Same Rules, No Exceptions

Seasonal and part-time employees are subject to the same federal income tax withholding, Social Security, and Medicare tax rules as everyone else on your payroll. That means you are responsible for withholding the right amount from every paycheck and paying employment taxes on the wages you pay them. It does not matter if someone works for you for two weeks or two months. The moment you put them on payroll, those responsibilities kick in.

What Seasonal Employers Need to Know About Form 941

If your business is truly seasonal and you do not pay wages during certain quarters of the year, you generally do not have to file Form 941 for those quiet quarters. Form 941 is the Employer's Quarterly Federal Tax Return and it covers what you owe in federal income tax withholding, Social Security, and Medicare for each quarter. The way to let the IRS know you operate seasonally is simple. Check the seasonal employer box in Part 3 of every Form 941 you file. Once you do that and file at least one taxable return for the year, the IRS will generally not come looking for returns in the quarters you did not file. It is a small step that saves a lot of unnecessary back and forth with the IRS.

If You Employ Farm Workers

Agricultural employers follow a different set of rules. If your business employs farm workers, you will want to follow the guidelines in Publication 51, also known as Circular A, the Agricultural Employer's Tax Guide. The rules around withholding and filing for farm labor have their own structure and it is worth understanding before you bring anyone on.

Hiring seasonal or part-time help is a smart move for a lot of businesses. Just make sure the tax side is handled correctly from day one. Missing withholding requirements or filing the wrong forms can lead to penalties that add up quickly. If you are unsure about your obligations as a seasonal employer or need help setting up your payroll correctly, our office is here to help. Visit desravinescpa.com or call (561) 214-2561 to schedule a free initial review.