Month: January 2022

Best Management Practice Deep Dive: Conservation Drainage

The next Water Quality Wednesday webinar, “Best Management Practice Deep Dive: Conservation Drainage” is one week from tomorrow, 02/02/222 10am-11:30am. I have attached the promo flyer, please feel free to circulate within your counties, social media, and clientele who might be interested in hearing from our Extension Water Quality team.

This webinar series is free, but registration is required www.go.osu.edu/WQW  CCA and CLM credits will be available. Please direct any questions to moneymaker.4@osu.edu.

 

ARC/PLC Program Election and OSU Extension Decision Tool

by: Chris Zoller, Extension Educator, ANR, Tuscarawas County

Introduction

The 2018 Farm Bill reauthorized the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) safety net programs that were in the 2014 Farm Bill. Producers must enroll in ARC/PLC for the 2022 crop year through their local Farm Service Agency office. The signup period for the 2022 crop year is open now, and the deadline to enroll and make amendments to program elections is March 15, 2022.

If changes are not made by March 15, 2022 deadline, the election defaults to the programs selected for the 2021 crop year with no penalty.

 ARC/PLC Program Options

Producers again have the option to enroll covered commodities in either ARC-County, ARC-Individual, or PLC. Program elections are made on a crop-by-crop basis unless selecting ARC-Individual where all crops under that FSA Farm Number fall under that program. ARC program payments are made when crop revenue falls below a guaranteed level, while PLC payments are made when a crops specific effective price is lower than its reference price.

Reference Prices

While the 2018 Farm Bill does allow for reference prices to change, indications are that we will not see any changes in 2022.  The established reference prices are: corn $3.70; soybeans $8.40; and wheat $5.50.  Unless we experience significant reductions in yield and/or price, it is unlikely any ARC/PLC payments will be made this year.

Decision Tool

OSU Extension has a newly updated software program to assist producers with evaluating ARC/PLC scenarios and options.  This tool is available by contacting your local Extension Educator or by accessing it on-line at: https://farmoffice.osu.edu/farm-management-tools/decision-aids

Local carnivore research help needed.

As you may already know, Shauna Weyrauch and I from the Ohio State Newark, Department of Evolution, Ecology, and Organismal Biology, have been tracking the recovery of bobcat populations in Eastern Ohio for much of the last eight years, and were recently joined by EEOB PhD student, Xinzhu Zhang. Project Wild Coshocton (u.osu.edu/wildcoshocton) is embarking on a new venture in January 2022 – scavenger competition! No, no, not the kind where you run around taking photos of weird things for prizes… This is something else entirely.

 

Admittedly, we will be taking pictures of some weird things, but we are interested in how small to medium sized carnivores like bobcats, coyotes, possums, and raccoons (all known to scavenge) will interact and compete over valuable food resources. One of the most valuable resources available to scavengers in our area are deer carcasses! The Ohio State University and the Ohio Division of Wildlife have approved our team to place deer carcasses at several forest locations in Licking and Coshocton Counties and then film the resulting interactions among the mammals and birds that discover and scavenge for food at those sites.

 

This is where you come in! We have the sites and the cameras, but we need your help to locate recently killed deer along the roads in Licking and Coshocton Counties (and only within those counties). If you happen to see a new carcass appear along the road, or you have the misfortune of hitting and killing a deer, please contact us as soon as it is safe to do so. We will be happy to put that unfortunate animal to good use, and have the equipment to collect and transport the remains to one of our remote sites for use in our research.

(Not all carcasses may be used, it will depend if a fresh carcass is already present)

Contact information:

 

Andy Roberts

 

Shauna Weyrauch

 

Thanks in advance for any help you can give us! For project updates, photos, and video, check out our blog at (u.osu.edu/wildcoshocton), or you can follow us on Twitter (@WildCoshocton).

 

An Agricultural Employer’s 2021 Tax Obligations: A Series, Part II

By: Jeffrey K. Lewis, Friday, January 14th, 2022

As promised, here is the next and final installment of “An Agricultural Employer’s 2021 Tax Obligations: A Series” discussing an agricultural employer’s requirements and obligations under Ohio law.  This installment of the series provides an overview of Ohio employment taxes and additional employer obligations for Ohio’s agricultural employers.  This series covers an employer’s Ohio tax obligations and requirements that arise simply because a business has employees.  This series does not cover the business income or personal income tax reporting obligations of agricultural employers.

We first discuss Ohio’s income and school district taxes and then we focus on Ohio’s unemployment insurance tax and Ohio’s workers’ compensation requirement for all employers.  The information contained within this series is not meant to be legal and/or tax advice, it is for educational purposes only.  Agricultural employers should seek out the counsel and guidance of an attorney or other tax professional to help ensure compliance with Ohio tax law.

OHIO EMPLOYER WITHHOLDING TAX.   

Ohio Employer Withholding Tax.  Generally, employers are required to withhold Ohio income tax and school district tax from employees’ wages.  However, under Ohio law, Agricultural employers are not required to withhold Ohio taxes from wages paid to employees, so long as the employees fall under the definition of agricultural labor in 26 U.S.C. § 3121(g).  “Agricultural labor” includes all services performed:

  • on a farm, in the employ of any person, in connection with the cultivating, raising, and/or harvesting of any agricultural or horticultural commodity; or
  • in the employ of the owner or other operator of a farm, in connection with the operation, management, conservation, or maintenance of such farm and its tools and equipment.

Can Ohio’s Agricultural Employers Agree to Willingly Withhold Ohio’s Taxes?  In short, the answer is yes.  An agricultural employee must still pay Ohio income tax and their local school district tax on all income earned throughout the year.  If an employee does not have their Ohio taxes withheld from their pay, they may be required to make quarterly estimated tax payments to the state.  Because of this, an employee may request their employer to withhold their Ohio taxes from each paycheck.  An agricultural employer is under no obligation to withhold Ohio taxes, but some do.

Ohio Withholding Exemption Certificate.  It is important that each employer, even an agricultural employer, have its employees complete an Employee’s Withholding Exemption Certificate (Ohio IT 4).  For agricultural employers that are not going to withhold Ohio’s taxes, it must have each employee check the box next to “I am exempt from Ohio withholding under R.C. 5747.06(A)(1) through (6)” under Section III of Form IT 4.  If no Ohio IT 4 is completed, then an employer must withhold the Ohio’s taxes from an employee’s wages.

Ohio requires an employer to keep Ohio IT 4 in its records for at least four years and must make it available to the Ohio Department of Taxation upon request.

Registering as an Ohio Withholding Agent.  Employers that are required (or choose) to withhold Ohio’s taxes from employees’ wages must register with the Ohio Department of Taxation. This can be done one of three ways.

  1. By internet.  Registration can be completed online through the Ohio Business Gateway.
  2. By phone. Call 1-888-405-4089, listen for the message, and then press 2 to connect with an agent.
  3. By mail or fax.  Complete Application for Registration as an Ohio Withholding Agent (Ohio IT 1) and mail it to the address provided on the form or fax it to the Ohio Department of Taxation at (614) 387-2165.

How Much Ohio Income Tax Should an Employer Withhold?  To determine how much Ohio income tax to withhold, visit the Ohio Department of Taxation’s Employer Withholding Tables website.

How Much School District Tax Should an Employer Withhold?  School districts impose a tax using one of two methods: traditional or earned income.  School district tax rates and a district’s method of taxation can be found on the Ohio Department of Taxation’s “Employer Withholding: Table of Contents” website.

For traditional tax base school districts, an employer must use the same wage base and number of exemptions they use when calculating the employee’s Ohio income tax rate.  For earned income tax base school districts, an employer must withhold at a flat rate equal to the school district’s tax rate with no reduction or adjustment for personal exemptions.

An employee’s school district is determined by the address of the employee’s residence.  School districts and the corresponding four-digit codes can be found at https://www.tax.ohio.gov/finder or by contacting the applicable county auditor.

Electronic Filing Requirement.  Employers are required to file and pay Ohio income and school district withholding taxes electronically.  The easiest way to do this is through the Ohio Business Gateway.

Filing Frequency and Payment of Ohio’s Employer Withholding Tax.  An employer’s filing frequency is determined by the combined amount of Ohio and school district income taxes that were withheld or required to be withheld during the look-back period.  Ohio’s look-back period is the 12-month period ending June 30th of the preceding calendar year.  An employer’s filing frequency is re-evaluated every year.

Ohio’s Income Tax Filing Frequency:

Quarterly.  Ohio employers that withheld $2,000 or less in Ohio taxes will be required to file and pay taxes every calendar quarter.  Ohio’s form IT 501 and payment are due by the last day of the month following each calendar quarter.

Monthly.  Ohio employers that withheld more than $2,000 but less than $84,000 in Ohio taxes will be required to file and pay taxes every month.  Form IT 501 and payment are due within 15 days after the end of each month.

Partial-weekly.  Ohio employers that withheld $84,000 or more in Ohio taxes are required to make payment of withheld taxes within three banking days from the end of each “partial-weekly period.”  There is no form that is required to be filed each time tax payments are filed.  There are two “partial-weekly periods” in which an employer can be categorized.  An employer’s partial weekly period depends on the day it issues payroll.

Partial-weekly Period 1:  An employer is in period 1 if it issues payroll on Saturday, Sunday, Monday, or Tuesday.

Partial-weekly Period 2:  An employer is in period 2 if it issues payroll on Wednesday, Thursday, or Friday.

Remember, payment is due within three banking days from the end of each period.  So, if an employer issues payroll on Wednesday, it must submit payment of Ohio taxes within three banking days starting on Friday. 

School District Tax Filing Frequency.  School district tax filing frequency is the same as an employer’s Ohio income tax filing frequency except for employers that qualify as partial-weekly filers.  Partial-weekly employers are required to file school district tax on a monthly basis.  Every time an employer files and remits the school district tax they must complete “Payment of School District Income Tax Withheld” (Ohio SD 101), which can be found on the Ohio Business Gateway.

Quarterly and Annual Forms.  An employer’s filing obligations do not end by filing the above forms each time it remits payment of Ohio’s taxes.  The following are additional forms that must be completed by an employer either on a quarterly or yearly basis.  Not every form listed below needs to be completed by every employer.  Certain forms correspond with an employer’s filing frequency classification.  These forms can be found on the Ohio Business Gateway.

Quarterly/Monthly Filers.  Employers that qualify to file and pay Ohio income taxe on a quarterly or monthly basis must file an “Annual Reconciliation of Income Tax Withheld” (Ohio IT 941).  Ohio IT 941 is typically due no later than January 31 of the following year (the 2021 tax year deadline has been extended to March 2, 2022).  The total tax withheld on Ohio IT 941 must equal the amount reported on Ohio IT 3 (discussed below).

Partial-weekly Filers.  Employers that must pay Ohio taxes on a partial-weekly basis must file a “Quarterly Reconciliation of Income Tax Withheld” (Ohio IT 942) by the last day of each month following a calendar quarter for the 1st, 2nd, and 3rd Quarters.  A different Ohio IT 942 form titled “4th Quarter/Annual Reconciliation of Income Tax Withheld” is to be filed by partial-weekly employers by January 31 of the following year (the 2021 tax year deadline has been extended to March 2, 2022).  Partial-weekly employers do not submit Ohio IT 941.

“Transmittal of W-2 and 1099-R Statements” (Ohio IT 3).  All employers must submit Ohio IT 3, which can be done electronically on the Ohio Business Gateway.  Ohio IT 3 requires an employer to report and upload employee W-2s/1099-Rs.  The amount of Ohio taxes withheld and paid by an employer must match the information contained within the W-2s and 1099-Rs.  Ohio IT 3 is usually due by January 31 of the following year (the 2021 tax year deadline has been extended to March 2, 2022).

“Annual Reconciliation of School District Income Tax Withheld” (Ohio SD 141). Employers must also submit Ohio SD 141, which can be done electronically on the Ohio Business Gateway.  Ohio SD 141 compares the amount of school district tax withheld and paid by an employer and the information contained within the W-2s and 1099-Rs uploaded when an employer files Ohio IT 3 (see above).  The amount of school district tax withheld and paid should match the information contained within the W-2s and 1099-Rs submitted by an employer.  Ohio SD 141 is usually due by January 31 of the following year (the 2021 tax year deadline has been extended to March 2, 2022).

OHIO UNEMPLOYMENT INSURANCE TAX. 

When are Agricultural Employers required to pay Ohio’s Unemployment Insurance? Agricultural employers must pay the Ohio Unemployment insurance tax if it:

  • Paid cash wages of $20,000 or more in a calendar to agricultural employees in the current calendar year or the preceding calendar year; or
  • Had at least 10 agricultural employees for some portion of a day in 20 different weeks in the current year or the preceding year

Other Ways Employers can Become Liable for Ohio’s Unemployment Insurance Tax.  An employer can also be required to pay the Ohio Unemployment Insurance tax if it:

  1. Is subject to the Federal Unemployment Tax Act (“FUTA”) in either the current calendar year or preceding calendar year.
  2. Acquires a business that was subject to Ohio’s unemployment insurance tax.
  3. Elects to cover its employees voluntarily.

Employer Must Report Its Own Liability.  Employers are required to report liability by filing “Report to Determine Liability” (JFS 20100) to the Ohio Department of Job and Family Services (the “ODJFS”), which can be done online at https://thesource.jfs.ohio.gov.   The ODJFS will determine an employer’s liability based on the information provided in JFS 20100.  If an employer is deemed to be liable for Ohio Unemployment Insurance, the ODJFS will issue a 10-digit employer account number.

Employer Reporting.  Liable employers are required to file quarterly reports to the ODJFS.  Agricultural employers that must pay into the Ohio unemployment insurance fund must file the “Employer’s Wage Detail Report” and the “Quarterly Summary Report.” Employers who had no workers or paid no wages during a quarter are still required to file the above-mentioned reports.  Employers with fewer than 200 employees should file their quarterly reports by using the Ohio Business Gateway or ODJFS’s “The SOURCE Online”  The reports must be filed no later than the last day of the month following the end of a calendar quarter.

Employer Contributions.  Like FUTA, only the employer is responsible for Ohio’s unemployment insurance tax. Payments made into the Unemployment Insurance Trust Fund are called “contributions.”  Contribution rates are determined by an employer’s “experience rating” which is a measure of how much an employer has paid in unemployment taxes and has been charged in benefits.  For more information about contribution rates, visit https://jfs.ohio.gov/ouio/uctax/rates.stm.

Contributions are due no later than the last day of the month following the end of a calendar quarter.  To determine how much tax is due each quarter, an employer multiplies its unemployment tax rate by the amount of taxable wages paid during the quarter.  Contributions must be made each quarter until the “taxable wage base” for each employee has been met.  The taxable wage base for 2022 is $9,000.  This means that an employer is only required to pay its unemployment insurance tax rate on the first $9,000 dollars earned by each employee.  If an employer is unable to make a contribution, the unpaid balance will bear an annual interest rate of 14%, compounded monthly.

OHIO WORKERS’ COMPENSATION

While not technically a “tax,” every employer in the state of Ohio, with one or more employees, must have workers’ compensation coverage.  This includes agricultural employers.  There are, however, certain businesses that do not have to carry workers compensation coverage.  These businesses include:

  • Sole proprietors with no employees
  • Partnerships with no employees
  • Family farm corporations with no employees
  • Limited liability company acting as a sole proprietorship with no employees
  • Limited liability company acting as a partnership with no employees

As you can see, the common attribute shared by the exempt businesses listed above is the fact that those businesses have no employees.  What this means is that if anyone, other than an owner, is performing services for a business and being paid for those services, then the business is required to carry workers’ compensation coverage.  So, for example, if a couple owns and operates a small family farm corporation and only the couple performs the work on the farm, then workers’ compensation coverage is not required.

Elective Workers’ Compensation Coverage.  For those employers that are not required to carry workers’ compensation coverage, they may still elect to do so.  Oftentimes, businesses elect to carry workers’ compensation insurance to prevent the devastating side effects of a serious injury sustained by an owner.  Using the example of the family farm corporation from above, if the couple decides not to carry workers’ compensation coverage and one of them is injured while farming, their health insurance company may deny their claim because the injury was work-related.  Generally, on-the-job injuries must be covered through workers’ compensation, not an individual’s health insurance.  So, the couple could begin to amass a large sum in medical bills due to the lack of insurance coverage, possibly bankrupting the farm corporation.

Applying for Workers’ Compensation Coverage.  Employers required to carry workers’ compensation coverage must apply for coverage by submitting the “Application for Coverage (U-3)” to Ohio’s Bureau of Workers’ Compensation (“BWC”) which can be found at https://www.bwc.ohio.gov/employercoverage.  Employers electing to obtain coverage can apply by submitting the “Application for or Request to Cancel Elective Coverage (U-3S)” which can be found by visiting https://info.bwc.ohio.gov/wps/portal/gov/bwc/for-employers/employer-forms/application-for-request-cancel-elective-coverage.

Workers’ Compensation Premiums.  The BWC calculates an employer’s premium based on several factors, including total payroll, type of work performed by employees, and an employer’s workplace injury record.

Premium Payments.  Installment payments of an employer’s premium is based upon a schedule chosen by the employer.  The BWC will send an invoice to each employer for premium/installment payments.  Payments can be made through an e-account on the Ohio Bureau of Workers’ Compensation website.

Alternative Premium Rate Plans.  It’s no secret that workers’ compensation insurance can be a costly expense for an employer.  However, the BWC does have alternative premium rate plans for employers looking to reduce the cost of workers’ compensation insurance.  These alternative rate plans allow employers that operate similar businesses to join together to potentially achieve a lower premium rate than they could obtain as individual employers.  For more information on alternative premium rate plans visit https://www.bwc.ohio.gov/downloads/blankpdf/altrate.pdf.

Conclusion.  This series was split into two posts because of the massive amount of information presented.  However, the broad overview of this series was very surface level.  There are many exemptions, exceptions, alternate requirements, or additional requirements based on an employer’s unique circumstances that we did not cover for the sake of brevity.  That is why is it important to speak with an attorney or other tax professional so that they can help you navigate federal and state tax laws to make sure you are fulfilling your obligations as an employer and to address any questions or concerns that you may have.

References and Resources:

Ohio Administrative Code Chapter 4123, Bureau of Workers’ Compensation, https://codes.ohio.gov/ohio-administrative-code/4123

Ohio Bureau of Workers’ Compensation, BWC Basics for Employers, https://www.bwc.ohio.gov/downloads/blankpdf/BWCBASICS.pdf

Ohio Bureau of Workers’ Compensation, Workers’ Compensation Overview, https://info.bwc.ohio.gov/wps/portal/gov/bwc/for-employers/workers-compensation-overview

Ohio Department of Job and Family Services, Employer’s Guide to Ohio Unemployment Insurance,http://www.odjfs.state.oh.us/forms/num/JFS08201/pdf/

Ohio Department of Job and Family Services, Unemployment Insurance: Employer Resource Hub, https://unemploymenthelp.ohio.gov/employer/

Ohio Department of Job and Family Services, UI Tax for New Employers, https://jfs.ohio.gov/ouio/uctax/UITaxForNewEmployers.stm

Ohio Department of Taxation, 2022 Ohio Employer and School District Withholding Tax Filing Guidelines,https://tax.ohio.gov/static/employer_withholding/2021%20filing%20guidelines%20updates_rev%2012-22-21.pdf

Ohio Department of Taxation, Estimated Payments, https://tax.ohio.gov/wps/portal/gov/tax/individual/resources/estimated-payments

Ohio Revised Code Chapter 4141, Unemployment Compensation, https://codes.ohio.gov/ohio-revised-code/chapter-4141

Ohio Revised Code Chapter 4123, Workers’ Compensation, https://codes.ohio.gov/ohio-revised-code/chapter-4123

Ohio Revised Code Chapter 5747, Income Tax, https://codes.ohio.gov/ohio-revised-code/chapter-5747

Ohio Revised Code Chapter 5748, School District Income Tax, https://codes.ohio.gov/ohio-revised-code/chapter-5748

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Forages for Horses course

Between January and March in 2022, Ohio State University Extension will be offering Forages for Horses as a virtual course. One live webinar will be offered per month along with “work at your own pace” materials that accompany each webinar. The Forages for Horses program is a collaboration between Ohio State University Extension, USDA-Natural Resources Conservation Service, Ohio Department of Agriculture, and the Ohio Forage and Grasslands Council.

Each webinar will be offered live on Zoom at 7 P.M. and feature presentations in a 90-minute span. Attendees will be able to interact with the speakers and ask questions in real time. Once registered, attendees will be granted access to the full online course including the webinars and complementary resources. Participants that attend all three webinars will have the opportunity to earn a certificate of completion. Registered participants will also receive a USB drive of the full course manual (digital version) by mail.

The webinar schedule and topics are as follows.

Thursday, January 20th 7:00 PM– Hay Analysis and Feeding Different Classes of Horses

Thursday, February 17th 7:00 PM – Nutrition and Parasites

Thursday, March 17th 7:00 PM– Pasture and Weed Management, Soil Fertility, and Species Selection

The Forages for Horses course utilizes Scarlet Canvas. For best performance, Canvas should be used on the current or first previous major release of Chrome, Firefox, Edge, or Safari. Canvas runs on Windows, Mac, Linux, iOS, Android, or any other device with a modern web browser.

Cost of the course is $75. Registration includes access to all online content through December 31, 2022, live webinar access, webinar recordings, the course manual, virtual social hours, and a voucher for free attendance to one of nine planned pasture walks to be offered spring to fall of 2022 at various locations across the state. Current and new members of the Ohio Forage and Grasslands Council are eligible for a $15 discount on registration.

Register for the course by visiting https://go.osu.edu/foragesforhorsesregistration.

Questions about the course or the OFGC member discount code can be directed to Christine Gelley of Noble County OSU Extension at gelley.2@osu.edu.

Additional resources for promotion purposes:

YouTube Video about Forages for Horses: https://youtu.be/8edfRpd1F1Y

 

It’s a good time for a farmland leasing update

By:Peggy Kirk Hall, Associate Professor, Agricultural & Resource Law Friday, January 07th, 2022
Ohio Farmland Leasing Update photo with farm field

Winter is a good time to review farm leases, and current information is critical to that process.  That’s why our Farm Office team is offering its Ohio Farmland Leasing Update, a webinar on February 9, 2022 from 7 to 9 p.m.   I’ll be joined for the webinar by co-speakers Barry Ward, Leader of Production Business Management for OSU Extension, and attorney Robert Moore.

On the legal side, we’ll share legal information to help parties deal with addressing conservation practices in a leasing situation, using leases in farmland succession planning, Ohio’s proposed new law about providing notice of termination, and ensuring legal enforceability of a lease.  On the economic side, Barry Ward will provide a current economic outlook for Ohio row crops, research on cash rent markets for the Eastern Corn Belt, and rental market outlook fundamentals.  We’ll also overview farmland leasing resources.

There is no fee for the webinar, but registration is necessary.  Register at https://go.osu.edu/farmlandleasingupdate.

“Planning for the Future of Your Farm” Workshops offered by OSU Extension

To kick off 2022, OSU Extension will be offering “Planning for the Future of Your Farm” workshops to help farm families actively plan for the future of their farm business. The workshops are designed to help farm families learn strategies and tools to successfully create a succession and estate plan which can be used as the guide to transfer the farm’s ownership, management, and assets to the next generation. Learn how to have the crucial conversations about the future of your farm.

Topics discussed during this series include: Developing Goals for Estate and Succession; Planning for the Transition of Control; Planning for the Unexpected; Communication and Conflict Management during Farm Transfer; Legal Tools & Strategies; Developing Your Team; Getting Your Affairs in Order; and Selecting an Attorney.  This workshop will be taught by members of the OSU Farm Office Team.

Families can choose to attend the workshop virtually or in-person at regional workshops which will be held across the state. These sessions being offered include:

Virtual “Planning for the Future of Your Farm” Workshop

A virtual version of this workshop will be held on January 31 and February 7, 21 & 28, 2022 from 6:30 to 8:00 p.m. via Zoom. Because of its virtual nature, you can invite your parents, children, and/or grandchildren (regardless of where they live in Ohio or across the United States) to join you as you develop a plan for the future of your family farm.

Pre-registration is required so that a packet of program materials can be mailed in advance to participating families. Electronic copies of the course materials will also be available to all participants. The registration fee is $75 per farm family.  The registration deadline is January 25, 2022. More information and on-line registration can be obtained at go.osu.edu/farmsuccession

In-Person “Planning for the Future of Your Farm” Workshop

In addition to the webinar series, 3 regional in-person workshops will be held in February and March of 2022. Each of these programs will be held from 9:00 to 4:00 p.m.  The base registration cost for each of these meetings is $85 for 2 attendees, lunch and 1 notebook.  Additional participants can attend for a $20 fee and extra sets of the course material can be purchased for $15.

The locations for each for the meetings are:

February 10, 2022 in Greene County

Location: Greene County Extension Office

100 Fairground Road, Xenia, Ohio

On-line registration can be made at go.osu.edu/greenefarmfuture

More details can be obtained at corboy.3@osu.edu or 937-372-9971

 

February 25, 2022 in Wayne County

Location: Fisher Auditorium

1680 Madison Avenue, Wooster, Ohio

More details can be obtained at zynda.7@osu.edu or 330-264-8722

 

March 4, 2022 in Wood County

Location: Wood County Fairgrounds- Junior Fair Building

13800 W Poe Road, Bowling Green, Ohio

More details can be obtained at eckel.21@osu.edu or 419-354-9050

Specific details about each of the workshops can be found at: go.osu.edu/farmsuccession

Regional Agricultural Outlook and Policy Meetings set to kick off

Published on January 4, 2022

Ohio State University Extension will present its 2022 Regional Agricultural Outlook and Policy Meetings starting in late January and ending in late March.

OSU Extension is the outreach arm of Ohio State’s College of Food, Agricultural, and Environmental Sciences (CFAES), and the main sponsor of the meetings. Economists from the CFAES Department of Agricultural, Environmental, and Development Economics, along with other college specialists and invited guests, will serve as speakers.

Held throughout the state, the eight outlook meetings will address agricultural topics of interest not only in Ohio, but across the Corn Belt as well. Programs will include presentations on grain market outlook; agricultural law updates; the dairy industry in 2022; Ohio’s changing climate; farm policy; Farm Bill 2023; Ohio’s Senate Bill 52 related to wind and solar development; farm real estate and cash rent trends; agricultural input price projections; and federal tax updates.

The outlook meetings will be hosted jointly by Union, Madison, and Champaign counties; and also individually by Defiance County; Wayne County; Clinton County; Crawford County; Pickaway County; Muskingum County; and Darke County.

New to this year’s program is the statewide support of the Ohio Corn and Wheat Growers Association.

“We are proud to partner with Ohio State University Extension educators across the state to support this year’s agronomy, outlook, and grower meetings,” said Brad Moffitt, director of membership and market development for the Ohio Corn and Wheat Growers Association. “We value this partnership and look forward to supporting programs that bring value to our members’ farm businesses.”

The scheduled outlook programs, times, and locations, along with the contact information needed to register for each, are listed below.

Jan. 13, Wayne County: Buckeye Ag Museum, 8 a.m.–noon, 877 W. Old Lincoln Way, Wooster, Ohio 44691. Speakers and topics include Barry Ward, farm inputs, rent, and real estate; Peggy Hall, agricultural law update; Aaron Wilson, Ohio’s changing climate; Dianne Shoemaker, dairy industry 2022. Contact Extension educator Haley Zynda, zynda.7@osu.edu.

Jan. 14, Clinton County: OSU Extension Office, 7 a.m. breakfast, 7:30 a.m. program, 111 S. Nelson Ave., Wilmington, Ohio 45177. Speakers and topics include Barry Ward, farm inputs, rent, and real estate; Peggy Hall, agricultural law update; Aaron Wilson, Ohio’s changing climate; Eric Romich, Senate Bill 52—Solar Farm Legislation; Carl Zulauf, Farm Bill 2023. Contact Extension educator Tony Nye, nye.1@osu.edu.

Jan. 28, Union, Madison, and Champaign counties: Der Dutchman Restaurant, 8 a.m. breakfast, 8:30 a.m. program, 445 S. Jefferson Ave, Plain City, Ohio 43064. Speakers and topics include Barry Ward, farm inputs, rent, and real estate; Ben Brown, grain marketing outlook; Robert Moore, farm transition and taxes. Registration: $20 by Jan. 25 at go.osu.edu/PlainCityOutlook. Contact Extension educator Amanda Douridas, douridas.1@osu.edu.

Jan. 31, Defiance County: Jewell Community Center, 6–9 p.m., 7900 Independence Road, Defiance, Ohio 43512. Speakers and topics include Barry Ward, farm inputs, rent, and real estate; and Matt Roberts, grain marketing outlook. Registration: $5 includes catered meal. Register by Jan. 24 at go.osu.edu/CENU. Contact Extension educator Bruce Clevenger, clevenger.1@osu.edu.

Feb. 1, Crawford County: Wayside Chapel Community Center, 5 p.m., 2341 Kersetter Road, Bucyrus, Ohio 44820. Speakers and topics include Peggy Hall, agricultural law update; Carl Zulauf, Farm Bill 2023; Matt Roberts, grain marketing outlook; and Aaron Wilson, Ohio’s changing climate. Contact Extension educator Jason Hartschuh, hartschuh.11@osu.edu.

Feb. 2, Pickaway County: Emmett Chapel, 8 a.m., 318 Tarlton Road, Circleville, Ohio 43113. Speakers and topics include Barry Ward, farm inputs, rent, and real estate; Matt Roberts, grain marketing outlook; and Carl Zulauf, Farm Bill 2023. Contact Extension educator Mike Estadt, estadt.3@osu.edu.

Feb. 14, Muskingum County: Muskingum County Convention Center, 9 a.m., 205 N. 5th St. Zanesville, Ohio 43701. Speakers and topics include Barry Ward, farm inputs, rent, and real estate; Peggy Hall, agricultural law update; Matt Roberts, grain marketing outlook; Carl Zulauf, Farm Bill 2023. Contact Extension educator Clifton Martin, martin.2242@osu.edu.

March 25, Darke County: Romers Catering, 10 a.m.–2 p.m., 118 E. Main St., Greenville, Ohio 45331.Speakers and topics include Barry Ward, farm inputs, rent, and real estate; Peggy Hall, agricultural law update; and Aaron Wilson, Ohio’s changing climate. Contact Extension educator Taylor Dill, dill.138@osu.edu.

For more information about OSU Extension, visit extension.osu.edu.

 

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An Agricultural Employer’s 2021 Tax Obligations: A Series

By: Jeffrey K. Lewis, Tuesday, January 11th, 2022

As we settle into 2022 and regroup after a busy holiday season, one of things an agricultural employer should be thinking about is taxes, more specifically, have they met their obligations when it comes to federal and state employment taxes.  In this two-part series, we discuss the federal and state taxes that an employer is required to withhold from employees’ wages and the tax obligations that an agricultural employer is solely responsible for.  This series covers the taxes and obligations an employer has because of the wages paid to employees.  This series does not cover the business income or personal income tax reporting obligations of agricultural employers.

The first part of this series focuses on federal taxes and an employer’s obligations when it comes to social security, Medicare, federal income, and federal unemployment taxes. We also discuss when to pay the taxes and how to pay them.  The information contained within this series is not meant to be legal and/or tax advice.  Agricultural employers should seek out the counsel and guidance of an attorney or other tax professional to help them ensure they are compliant with their obligations under federal tax law.

Social Security and Medicare Taxes.  Generally speaking, an employer must withhold social security and Medicare taxes from the wages it pays its employees.  However, there are special rules for agricultural employers.  The $150 Test or the $2,500 Test will help determine if an agricultural employees’ wages are subject to social security and Medicare taxes along with federal income tax withholding requirements.

All cash wages that an employer pays to an employee during the year for farmwork is subject to social security, Medicare, and federal income tax withholding requirements if either of the following tests are met:

  • The $150 Test.  An employer pays cash wages to an employee of $150 or more in a year for farmwork.
    • This includes all cash wages paid on a time, piecework, or other basis.
  • The $2,500 Test.  The total that an employer paid for farmwork (cash and non-cash wages) to all employees is $2,500 or more during the year.

Annual cash wages of less than $150 paid to a seasonal farmworker are not subject to social security and Medicare taxes, or federal income tax withholding, even if an employer pays all farmworkers $2,500 or more.  However, these wages do count towards the $2,500 Test to determine whether other farmworkers’ wages are subject to social security and Medicare taxes. 

Social Security Tax Rate.  The social security tax is 6.2% for both the employee and the employer on the first $142,800 paid to each employee in 2021.  This means that an employer must withhold 6.2% of the employee’s wages for social security and the employer must match the 6.2%.

Medicare Tax Rate.  The Medicare tax rate is 1.45% for each employee, on all wages earned.  An employer must withhold Medicare taxes from an employee’s wages and pay a matching amount.

Federal Income Tax Withholding.  An agricultural employer must withhold federal income tax from the wages of farmworkers if the wages are subject to social security and Medicare taxes (i.e. is the $150 Test or $2,500 Test met?).  The amount of federal income tax withheld is determined by the gross wages paid to an employee (before any taxes are taken out).

To know how much federal income tax to withhold from an employee’s wages, an employer should have a Form W-4  (“W-4) on file for each employee.  The Internal Revenue Service (“IRS”) redesigned Form W-4 for 2020 and beyond.  The new W-4 no longer asks employees to report the number of withholding allowances they are claiming.  The IRS encourages employees to file an updated W-4, but it is not a requirement to help determine the employee’s federal income tax withholding.

How much does an employer withhold for federal income tax?  The best answer a lawyer can give to this question is, it depends.  Luckily, the IRS has provided a tool to help employers determine the amount of federal income tax to withhold from an employee’s wages.  The Income Tax Withholding Assistant for Employers allows employers to enter an employee’s W-4 information to calculate the amount of federal income tax to withhold.  Note: The Income Tax Withholding Assistant will not be available after 2022.  The IRS suggests using the Income Tax Withholding Assistant to become familiar with how to use the worksheets and tables in Publication 15-T to be able to calculate the amount of federal income tax to withhold after 2022.   

What if my employee claims he or she is exempt from federal income tax withholding?  An employee may claim an exemption from federal income tax withholding because they had no federal income tax liability last year and they expect to have no income tax liability this year.  However, the employee’s wages are still subject to social security and Medicare taxes.

To claim the exemption, an employee must indicate the exemption on their W-4.  The exemption is not permanent and is only for that year.  To continue to be exempt, an employee must provide their employer a new W-4 by February 15.  If an employee does not provide a new W-4 by February 15, the employer is required to start withholding federal income tax as if the employee had checked the Single or Married filing separate box on their W-4.  If an employee provides a new W-4 after the February 15 deadline, an employer may apply the exemption to future wages but should not refund any taxes withheld while the exempt status was not in place.

Notice to Employees About Earned Income Credit (“EIC”).  An employer must notify employees who have had no federal income tax withheld that they may be eligible for a tax refund because of the EIC.  One easy way an employer can meet this requirement is by having the EIC notice on the back of the Form W-2 issued to all employees.

Depositing Social Security, Medicare, and Federal Income Taxes.  Employment taxes must be deposited by electronic fund transfer (“EFT”).  Normally, an EFT is made to the federal government using the Electronic Federal Tax Payment System (“EFTPS”).  EFTPS is a free service provided by the Department of Treasury.  For more information on EFTPS visit EFTPS.gov or call 800-555-4477.  If an employer does not want to use EFTPS, they can arrange for their tax professional, financial institution, payroll service, or other trusted third party to make electronic payments on their behalf.

When to Deposit Social Security, Medicare, and Federal Income Taxes.  An agricultural employer’s deposit schedule is determined from the total tax liability reported on Form 943, line 13, for the lookback period.  The lookback period is the second calendar year preceding the current calendar year.  Since we are in 2022, the lookback period will be 2020.  This means that an employer’s status as either a “monthly schedule depositor” or “semiweekly schedule depositor” will be determined by the amount on Form 943, line 13 from 2020.

The terms “monthly schedule depositor” or “semiweekly schedule depositor” are not based on how often an employer pays its employees or how often it will be required to make tax deposits.  The terms simply identify which set of rules an employer must follow.  As discussed above the deposit schedule an employer must follow is determined by the total tax liability reported on Form 943, line 13.  For 2022, an employer is a:

  • Monthly schedule depositor if they reported $50,000 or less in 2020.
  • Semiweekly schedule depositor if they reported more than $50,000 in 2020.

Monthly Deposit Schedule.  If an employer is a monthly schedule depositor, they must deposit employment taxes on wages paid during a calendar month by the 15th day of the following month.  If an employer does not pay any wages in a calendar month, they have no deposit requirement for the following month. 

Semiweekly Deposit Schedule.  If payday falls on a Wednesday, Thursday, or Friday, then an employer must deposit taxes by the following Wednesday.  If payday falls on a Saturday, Sunday, Monday, or Tuesday, then an employer must deposit taxes by the following Friday.   This is a very simplified explanation and assumes an employer has one payday for all employees.  If an employer has multiple paydays for different employees, it should speak with an attorney or other tax professional to help determine when taxes should be deposited.

Federal Unemployment Tax Act (“FUTA”).  FUTA, in conjunction with state unemployment systems, provides unemployment compensation to workers who have lost their jobs.  Most employers pay both federal and state unemployment taxes.  Additionally, only the employer is responsible for the FUTA tax, nothing is withheld from an employee’s wages for FUTA.

Agricultural Employers and FUTA.  An agricultural employer is required to file Form 940 and pay FUTA tax if it:

  • Paid cash wages of $20,000 or more to farmworkers in any calendar quarter in 2021 or 2022, or
  • Employed 10 or more farmworkers during at least some part of the day (whether or not at the same time) during any 20 or more different weeks in 2021 or 20 or more different weeks in 2022.

When determining whether an employer meets either test above, employers must count the wages paid to H-2A workers, even though the wages paid to H-2A workers are not subject to FUTA.

Form 940 Due Date.  Form 940 is due by January 31.  If an employer made deposits on time and in full, they may file Form 940 by February 10.

FUTA Tax Rate.  The FUTA tax rate is 6% for 2021.  The tax applies to the first $7,000 an employer pays to each employee.  There is a tax credit that may be applied against the FUTA tax rate for any amounts paid into state unemployment funds.  The maximum credit is 5.4%.  An employer is entitled to the maximum credit if they paid state unemployment taxes in full, on time, and on all the same wages that are subject to FUTA.  Visit the instructions for filing Form 940 for further FUTA tax credit guidance.

Depositing FUTA Tax.  FUTA taxes are deposited by EFT and are generally deposited on a quarterly basis.  To calculate an employer’s FUTA tax, it should multiple the amount of wages paid to employees by .6% during the quarter.  This percentage may have to be adjusted depending on an employer’s entitlement to the FUTA tax credit for state unemployment contributions.  When an employee’s wages reach $7,000 for the calendar year, an employer does not have to figure any additional FUTA tax for that employee.

Conclusion.  The above information is a very general overview of an employer’s tax obligations when it comes to its employees.  As you can see, federal tax law can be daunting.  We barely scratched the surface when it comes to specific exemptions or additional obligations for an agricultural employer.  For example, agricultural employers may not always employ farmworkers or employees “engaged in agriculture.”  The requirements and obligations of an employer that employs both farmworkers and non-farmworkers be may different than what is discussed above.  Therefore, we cannot stress enough, the importance of speaking with an attorney or other tax professional so they can help you navigate federal tax law and your obligations as an employer.

Look out for our next and final installment of “An Agricultural Employer’s 2021 Tax Obligations: A Series” where we will be discussing an agricultural employer’s requirements and obligations under Ohio tax law.

References and Resources:

Internal Revenue Service, Publication 15 – (Circular E), Employer’s Tax Guide, https://www.irs.gov/pub/irs-pdf/p15.pdf

Internal Revenue Service, Publication 15-A – Employer’s Supplemental Tax Guide, https://www.irs.gov/pub/irs-pdf/p15a.pdf

Internal Revenue Service, Draft Publication 51- (Circular A), Agricultural Employer’s Tax Guide, https://www.irs.gov/pub/irs-dft/p51–dft.pdf

Internal Revenue Service, Publication 225 – Farmer’s Tax Guide, https://www.irs.gov/pub/irs-pdf/p225.pdf

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