Forms

Completing a W4

What’s the purpose of this form?

The W-4 form tells your employer how much federal income tax to take out of each paycheck. The amount withheld is based on your marital status (see below). If you want an extra, specific dollar amount taken out of your paycheck, you can write that in on this form. Form W-4 is also used to claim an exemption from federal income tax withholding (more on that later).

New employees need to submit this form right away. If you put it off, your employer will have to withhold the maximum amount of tax from your paycheck (Single – zero exemptions). In addition, if your living situation changes in some way after you fill out this form, you need to fill out a new W-4.

What are withholding allowances?

The more withholding allowances you can claim, the less you will have withheld in federal income tax each pay period. This is why submitting your W-4 is so important. Until you turn in this form, your employer has to assume you are claiming zero withholding allowances. The conditions for withholding allowances are listed below:

You can claim 1 allowance for yourself, unless someone else (a spouse or parent) will list you as a dependent on his/her income tax return.
You can claim 1 allowance for each child you list as a dependent on your tax return, unless your spouse has already claimed the child on his/her W-4 form.

What this boils down to is that each individual in the family can be claimed only one time by one person to gain a withholding allowance. Here are some other allowances you might claim.

You can claim one allowance if you’re single & have only 1 job.
You can claim an allowance if you’re married, have only 1 job, & your spouse doesn’t work.
If you’re filing as “head of household,” you can claim an allowance. To be a “head of household”, you have to be single and must be paying more than ½ of the cost of maintaining a home for yourself and your dependent(s).
You can claim an allowance if you spend at least $1,500 per year in out-of-pocket child care expenses, as long as you intend to claim a credit for this on your income tax return.
You can use the W-4 worksheet to calculate additional allowances. These allowances are based on deductions for interest on your home mortgage, contributions you made to charities, state and local taxes, some medical expenses, & various other payments you might have made. See the W-4 form for details.

Can you claim an exemption from federal income tax withholding?

It is possible, but not very likely. You can claim to be exempt from federal withholding only if both of the following conditions apply:

You owed no federal taxes last year, and all the federal tax withheld from you during the year was given back after you filed your return.
You don’t expect to owe any federal taxes for the current year.

Warning: Even if the 2 conditions are true, you may still not be exempt from withholding. If your income for the year is more than $750 and includes over $250 of unearned income (like interest & dividends), and someone else is claiming you as a dependent, you are not exempt from federal tax withholding.

When do I have to submit a new W-4?

If any of the situations below apply, you have to fill out a new form within 10 days and turn it in to your employer.

Your marital status or financial status changes. For example, if you get a divorce, or a previously non-working spouse takes a job.
Your name changes. (See below*)
You realize you are no longer exempt from federal income tax withholding.

When can I submit a new W-4?

You can change your W-4 whenever you like. You do not have to wait for a new year. If you find you under or over-paid on your taxes in the prior year, you or your tax professional may recommend a new number of allowances to claim.

*Important to Note:

A new W-4 over-rides any previous W-4 you have on file with your employer.
Your name on your W-4 must match the name the IRS uses on your tax return. It must be written exactly how it is listed on your social security card. This is the name that is printed on your paycheck and your W-2. If it doesn’t match, please fill out a new W-4.

What if my employer rejects my W-4?

It is your responsibility to see that the information on your W-4 is correct. Your employer won’t check it over for you. If your form has obvious problems, though, your employer won’t accept it. Your employer could reject your W-4 if:

You’ve changed the text of the form by crossing out or adding statements to it.
You’ve used the form to request a flat dollar amount or a tax percentage to be withheld.
You told your employer that some of the information on the form is false.

Important to remember

To figure total allowances, use the worksheet on Form W-4.
If you are married but file separately, you could claim your marital status as “Married but withhold at higher single rate”.
Don’t make false claims on your W-4 form in hopes of reducing your tax. That’s a felony offense.
If your name changes, you should submit a new W-4 form to your employer, but only after you have received your new social security card.
A flat dollar amount or percentage cannot be requested to be withheld each pay in lieu of # of allowances.
If you fill out an unacceptable W-4, you need to fill out a new one. If you don’t, your employer will assume you have zero allowances.
If you are not a new employee, your employer will keep using your most recent W-4 until a new one has been filed.
Students are not automatically exempt. Certain conditions have to be met.
State W-4’s also need to be updated when you update your Federal W-4. Most of the same regulations apply to state W-4’s as for federal.
Please don’t ask Human Resources or Payroll for tax advice. They aren’t allowed to advise you

Social Security Administration

If you legally change your name because of marriage, divorce, court order or any other reason, contact the Social Security office so you can get a corrected card. If you do not tell Social Security when your name changes, it may:

Delay your tax refund; and
Prevent your wages from being posted correctly to your Social Security record, which may lower the amount of your future Social Security benefits.

To change your name on your Social Security card, complete an Application For a Social Security Card (Form SS-5) @ www.socialsecurity.gov/online/SS-5FS.html . Forms need to be mailed or hand delivered to the local Social Security office upon completion.

W-4 Help

If you need additional help, consult your tax preparer or get a copy of the IRS Publication 919, How Do I Adjust My Tax Withholding? by calling the IRS at 1-800-TAX-FORM for one, or download at the IRS website www.irs.gov.