Reporting Requirements for Election Workers
(from Maine Townsman, March 2000)

EDITOR'S NOTE: The following article was excerpted from a revenue ruling from the Internal Revenue Service. The principal author of this revenue ruling is Elizabeth Edwards of the Office of Chief Counsel (Employee Benefits & Exempt Organizations). For further information regarding this revenue ruling, contact Elizabeth Edwards at (202) 622-6040.

How do the information reporting requirements of §§ 6041(a) and 6051(a) of the Internal Revenue Code apply to election workers?

Election workers are individuals who are generally employed to perform services for state and local governments at election booths in connection with national, state, or local elections. These election workers are typically paid a set fee for each day of work

Compensation of an election worker is not subject to income tax withholding. Section 2401(a) and 31.3401(a)-2(b)(2). If an election worker’s compensation is less than $1,100 for calendar year 2000, it is generally not subject to FICA tax. Sections 3121(b)(7)(F)(iv) and 3121(u)(2)(B)(ii)(V). However, under a state’s § 218 agreement, an election worker’s compensation may be subject to both the old-age, survivors and disability insurance (OASDI) and the Medicare portions of the FICA tax at a level below $1,100 for calendar year 2000.

Information about a state's § 218 agreement can be obtained from the State Social Security Administrator.

Section 6041(a) applies to payments of compensation that are not subject to withholding of FICA or income tax. If an election worker’s compensation is not subject to withholding of FICA tax, the § 6041(a) reporting requirement applies to payments that aggregate $600 or more in any taxable year. Under § 1.6041-2(a)(1), compensation subject to income tax withholding is taken into account in determining whether the $600 reporting requirement applies.

Section 6051(a) requires reporting of compensation subject to either FICA tax or income tax withholding. No reporting is required by §§ 6051(a) and 31.6051-1(a) and (b) for items of income that are not subject to withholding of FICA tax or income tax. If an election worker’s compensation is subject to withholding of FICA tax, reporting is required by § 6051(a), regardless of the amount of compensation.

Possible Situations

Situation 1: Government A pays V $200 in a calendar year for services as an election worker. A does not employ V in any other capacity. The services of A’s election workers are not covered by a § 218 agreement. V is not covered by a retirement plan maintained by A.

Situation 2: Government B pays W $200 in a calendar year for services as an election worker. B does not employ W in any other capacity. The services of B’s election workers are covered by a § 218 agreement if their remuneration is $100 or more in a calendar year. W is not covered by a retirement plan maintained by B.

Situation 3: Government C pays X $1,100 in a calendar year 2000 for services as an election worker. C does not employ X in any other capacity. The services of C’s election workers are not covered by a § 218 agreement. X is not covered by a retirement plan maintained by C.

Situation 4: Government D pays Y $200 in a calendar year for services as an election worker. D also employed Y in another capacity, in which Y earned wages of $300 that are subject to income tax withholding. The services of D’s election workers are not covered by a § 218 agreement. Y is not covered by a retirement plan maintained by D.

Situation 5: Government E pays Z $200 in a calendar year for services as an election worker. E also employed Z in another capacity, in which Z earned wages of $500 that are subject to income tax withholding. The services of E’s election workers are not covered by a § 218 agreement. Z is not covered by a retirement plan maintained by E.

Reporting Requirements

The reporting requirements applicable to governments that employ election workers are as follows:

Situation 1: Neither FICA tax nor income tax withholding applies to the $200 paid to V. The reporting requirements of § 6041(a) apply. Because V earns fees that are less than $600, Government A is not required to issue Form W-2 to V.

Situation 2: FICA tax, but not income tax withholding, applies to the $200 paid to W because the fees exceed the $100 threshold in the § 218 agreement . Government B must follow the reporting requirements of § 6051(a), reporting on Form W-2 the fees of $200 and the FICA tax withheld.

Situation 3: FICA tax, but not income tax withholding, applies to the $1,100 paid to X for calendar year 2000. Government C must follow the reporting requirements of § 6051(a), reporting on Form W-2 the fees of $1,100 and the FICA tax withheld.

Situation 4: Neither FICA tax nor income tax withholding applies to the $200 paid to Y for services as an election worker, but the $300 payment is subject to income tax withholding. Government D must follow the reporting requirements of § 6051(a), reporting on Form W-2 the $300 payment and the income tax withheld. Section 6041(a) does not require reporting of the $200 payment because the total of the two payments is less than $600 for the calendar year.

Situation 5: Neither FICA tax nor income tax withholding applies to the $200 paid to Z for services as an election worker, but the $500 payment is subject to income tax withholding. Government E must follow the reporting requirements of § § 6041(a) and 6051(a), reporting on Form W-2 both the $200 and the $500 payments and the amount of income tax withheld.

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NOTE: For more information on "withholdings," see the IRS web site, www.irs.gov.  Select "Forms and Publications," then "Forms and Publications by Number" to access Publication 15, Circular E.  See the section entitled, "Special Rules for Various Types of Services and Payments."