Certain Forms are required by federal and state law before employment can begin. These forms include the following three (3) forms:
1. Form W-4 Federal Withholding
This form establishes the amount of federal taxes to withhold from your paycheck.
Exemption from withholding: this is a one year election. A new W4 form will have to be filed each taxable year for exempt filing. Exempt filing is a one year election.
2. Form IL-W-4 State Withholding
This form establishes the amount of Illinois state taxes withheld from your paycheck. The tax is generally 5% of Illinois taxable income.
Wisconsin State Withholding: residents of Wisconsin are allowed to file a Wisconsin W4 form and have Wisconsin taxes withheld. Employee needs to complete a Wisconsin W4.
3. Form I-9 Employment Eligibility Verification
Immigration and Naturalization Service supplies and requires this form, which establishes the right of a person to work in the United States. On the form, the employer must verify the employment eligibility and identity documents presented by the employee and record the document information on the Form I-9. Acceptable documents are listed on the back of the form (page 3 of the pdf version). You may find out more information about it and/or obtain a .pdf version at this INS web site: I-9 Form.
Other forms and Tax Issues
Social Security (FICA) and Medicare
Social Security and Medicare taxes are allocated on taxable Social Security and Medicare wages. The tax rate is 7.65%. Wages greater than $200,000 pay an additional .009 in Medicare Taxes. The College also pays 7.65% of the taxable Social Security and Medicare wages to the federal government. The College does not match the additional Medicare tax of .009.
Students are exempt from FICA and Medicare during the academic year as long as they are enrolled at least part time and regularly attending classes. Summer employees must pay these taxes during the months of June and July. International full-time students on certain visa types are exempt from FICA tax.
See the Director of Student Accounts for this form.
This form is used to report certain types of income earned in the United States by a foreign national; this includes students. In many cases, this will be scholarship money the student received in excess of his or her qualified education costs. In some cases, taxes will have to be withheld. The College must issue Form 1042-S to the foreign nationals by March 15 of the following year.
This form is sent to the student and to the IRS. It establishes if the student was enrolled at least half time during the calendar year. It also indicates whether the student was primarily a graduate student. This form is used to qualify for certain tax credits defined in the IRS Regulations, like the Hope and Lifetime Learning Credits.
The College is not required to fill in the dollar amount fields on the Form 1098T. Specific questions regarding this form should be directed to the Director of Student Accounts.
Education Credits for U.S. Tax Residents 2013:
- American Opportunity Credit – Up to $2,500 for qualified education expenses for each eligible student
- Lifetime Learning Credit – Up to $2,000 for qualified education expenses
- Tuition and fees deduction – The tuition and fees deduction can lower your taxable income by up to $4,000. Even if you don’t itemize deductions, you can still claim it.
More information about the education tax credits can be found on the IRS website, www.irs.gov under Education Credits.
This form is used to report income paid to independent contractors. Awards and personal compensation in excess of $600 also are reported.
1098 Mortgage Interest Statement
Faculty and staff with second mortgages with the College will received a 1098-Mort statement each year. This statement is mailed to the home address at the end of January. This would be used if you itemize your deductions.