Why is a bonus taxed differently?
A bonus is defined by the IRS to be a “Supplemental Wage”, therefore it is taxed differently then regular wages. If a bonus is separated from your regular wages, two forms of federal withholding methods can be used. Please view IRS Publication 15, Circular E, under subheading Supplemental Wages. You can go directly to the IRS website, www.irs.gov, the view the examples and explanation on how to tax a bonus. • If I have employees that work from their homes in another state, do I have to open a withholding and unemployment account in that state? In most cases, yes. If an employee’s services are localized in one state, which is different than the state in which the main office or base of operations is located, then typically a combined registration must be filed for that other state in which employees are solely working in. Every state has different laws so it is recommended that you file the registration forms and applications to open withholding and unemployment accounts. Each state wil
