Election Worker Payroll Setup

Election Worker Payroll Setup

Introduction

As we begin another election year, this is a great time to check the setup of election worker pay codes.  This article provides a description of a common setup for election worker earnings codes based on expected annual earnings.  Note that the examples provided are based on the Connect version of Caselle, the concepts are similar in the Clarity and Classic versions as well.

Background

Section 15 "Special Rules for Various Types of Services and Payments" of 2022 IRS Publication 15 provides guidance on the taxability of election worker wages based on the total YTD wages for the worker.  Based on that section, election workers should be subject to the following taxes:

Expected Annual Wage
Income Tax Withholding
Social Security & Medicare Withholding
FUTA
Less than $600 annually
Exempt
Exempt
Exempt
At least $600 and less than $2,000 annually
Exempt
Exempt.  File Form W-2 for payments of $600 or more even if no social security or Medicare taxes were withheld.
Exempt
$2,000 or higher annually
Exempt
Taxable if paid $2,000 or more in 2022 (lesser amount if specified by a section 218 social security agreement). See Revenue Ruling 2000-6.
Exempt
This article is informational only, and is not a substitute for consulting your tax advisor or legal counsel.


Pay Code Setup

In Caselle, three pay codes should be created to cover these requirements.  Each of the scenarios described in the table above correspond to one of the following three pay codes:

Scenario 1. Less than $600 Annually:

For annual wages less than 600, the wage pay code should not have any tax pay codes listed on the Used in Calculation sub tab on the Employee tab. Once created it should be assigned to all election workers.






Scenario 2. At least $600 and less than $2,000 annually:
For an employee with annual wages between $600 and $1,999.99 the pay code should have FWT and SWT included on the Used in Calculation sub tab of the Employee tab. Also note that nothing needs to be withheld for these taxes but this pay code along with the FWT and SWT pay codes need to be assigned to the employee so that a W-2 can be issued. When adding the FWT and SWT pay code to the employee they can assign the applicable No Withholding calculation.





Scenario 3. $2,000 or higher annually:
For employees with annual wages of  $2,000 and above the pay code should have all tax pay codes listed on the Used in Calculation sub tab on the Employee tab. Also confirm that this pay code is listed on the Used for Calculation sub tab on the Employer tab of Social Security and Medicare pay codes.




Using the Pay Codes

In most cases, election workers typically earn less than $600 annually.  Because of this, Civic recommends that election workers should be set up to use the "Election Wages < 600" pay code when they are set up.  At the beginning of each pay period containing election workers, it will be necessary to review the year-to-date earnings of the election workers.  For any pay period where an election worker will cross one of the earnings boundaries ($600 or $2,000), it will be necessary to change the pay code for that employee to reflect their new level of earnings.