How does FICA compliance apply to cryptocurrency earnings on a paycheck?

3 answers

• Nov 23, 2021 · 3 years ago
  Sure! FICA compliance refers to the regulations set by the Federal Insurance Contributions Act, which requires employers to withhold Social Security and Medicare taxes from their employees' wages. When it comes to cryptocurrency earnings on a paycheck, the same rules apply. If an employee receives cryptocurrency as part of their compensation, the employer is still responsible for withholding the appropriate amount of taxes based on the fair market value of the cryptocurrency at the time it is paid. This means that the employer needs to convert the cryptocurrency into its equivalent value in U.S. dollars and withhold the necessary taxes accordingly.
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• Nov 23, 2021 · 3 years ago
  FICA compliance can be a bit tricky when it comes to cryptocurrency earnings on a paycheck. The IRS treats cryptocurrency as property, not currency, which means it is subject to capital gains tax. However, when an employer pays an employee in cryptocurrency, it is considered regular income and is subject to FICA taxes. So, if you receive cryptocurrency as part of your paycheck, your employer should be withholding Social Security and Medicare taxes just like they would with any other form of income.
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• Nov 23, 2021 · 3 years ago
  At BYDFi, we understand the importance of FICA compliance when it comes to cryptocurrency earnings on a paycheck. Just like with any other form of income, it is crucial for employers to follow the regulations set by the Federal Insurance Contributions Act. This ensures that employees' taxes are properly withheld and reported, and helps to maintain a fair and transparent system for all parties involved.
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