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Seasonal Employees and Your Taxes

With summer fast approaching, some businesses are looking ahead to their busiest time of the year. Below are some reminders for businesses that intend to hire employees for the season.

  • Seasonal employees are subject to the same tax-withholding rules as nonseasonal employees.
  • Certain seasonal businesses may qualify for an exemption from the federal minimum wage and overtime pay rules. However, qualifying businesses should find out if applicable state law recognizes or permits the exemption.
  • An employer with a simplified employee pension (SEP) plan must allow all eligible employees to participate, including eligible seasonal employees. (An eligible employee is one who is at least age 21 and has worked for the employer in at least three of the last five years.)
  • Businesses that may be affected by the Affordable Care Act’s employer mandate will want to get details on how seasonal employees are treated.