the year, which is determined on the annual income tax return filed after the end of the year (federal Form 1040 series, and appropriate state forms). Withholdings in excess of tax so determined are refunded. Under Internal Revenue Code section 3402(f)(2) and related U.S. Treasury regulations, an employee must provide the employer with a Federal Form W-4, "Employee's Withholding Allowance Certificate." Most states will accept the W4 form, but a few have a similar form, especially if the employee is filing different information at the state level than at the federal (an employee may be paying a different amount in withholding or claiming a different number of exemptions at the state level than the federal level). The form provides the employer with a Social Security number. Also, on the form employees declare the number of withholding allowances they believe they are entitled to. Allowances are generally based on the number of personal exemptions plus an amount for itemized deductions, losses, or credits. Employers are entitled to rely on employee declarations on Form W-4 unless they know they are wrong. Social Security tax is withheld from wages at a flat rate of 6.2% (4.2% for 2011 and 2012). Wages paid above a fixed amount each year by any one employee are not subject to Social Security tax. For 2015, this wage maximum is $118,500. Medicare tax of 1.45% is withheld from wages, with no maximum. (This brings the total federal payroll tax withholding to 7.65%.) Employers are required to pay an additional equal amount of Medicare taxes, and a 6.2% rate of Social Security taxes. Many states also impose additional taxes that are withheld from wages. Wages are defined somewhat differently for different withholding tax purposes. Thus, federal income tax wages may differ from Social Security wages which may differ from state wages. Withholding on payments to foreign persons Companies and individuals who make certain types of payments to foreign persons must withhold federal income tax on those payments. Foreign persons include nonresident aliens, foreign corporations, and foreign partnerships. Payments subject to withholding include compensation for services, interest, dividends, rents, royalties, annuities, and certain other payments. Tax is withheld at 30% of the gross amount of the payment. This withholding rate may be reduced under a tax treaty. This tax withheld is usually considered a final determination and payment of tax, requiring no further action or tax return by the foreign