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IRS Form W-4
These frequently asked questions and answers are provided for general information
only and should not be cited as any type of legal authority. They are designed to
provide the user with information required to respond to general inquiries. Due
to the uniqueness and complexities of Federal tax law, it is imperative to ensure
a full understanding of the specific question presented, and to perform the requisite
research to ensure a correct response is provided.
Can employees change their Forms W-4 in mid-year to increase their
withholding exemptions, even though their marital status and number of dependents
have not changed? For example, an employee revises his Form W-4 to increase his
exemptions from three to nine or repeatedly changes his Form W-4.
Employees sometimes claim exemption from withholding on their Forms
W-4. What are the applicable rules?
Can employees change their Forms W-4 in
mid-year to increase their withholding exemptions, even though their marital status
and number of dependents have not changed? For example, an employee revises his
Form W-4 to increase his exemptions from three to nine or repeatedly changes his
No. Every employee must furnish to the employer a signed withholding exemption certificate
(Form W-4) on or before the date of employment. The Form W-4 must indicate the employee's
marital status and the number of withholding exemptions claimed. This number should
not exceed the number to which the employee is entitled. A married employee can
claim an exemption for a spouse only if the spouse does not have in effect a Form
W-4 claiming his or her own exemption. Code section 3402(f)(1)(B). If the employee
fails to provide a Form W-4, the employer must withhold as if the individual were
single with no withholding exemptions. Section 31.3402(f)(2)1(a), Employment Tax
Publication 505, Tax Withholding and Estimated Tax, provides detailed instructions
for completing Form W-4. Pub. 505 and Pub. 919 provide information about determining
the correct amount of income tax withholding.
Employees may amend their forms W-4 if their situations change. Some of the reasons
to add an exemption would be if an employee gets married (provided the spouse does
not work and claim his or her own exemption) or if a child is born or adopted. Section
31.3402(f)(2)-1(b), Employment Tax Regulations.
The purpose of completing the Form W-4 is to have the right amount of tax withheld.
Sometimes this cannot be done simply by claiming an exemption for each member of
a family. The employee may be entitled to additional withholding allowances, as
provided in the regulations. Code section 3402(m) , section 31.3402(m)1, Employment
Tax Regulations. For instance, the employee might have deductions and credits which
will significantly reduce taxable income. To benefit from extra allowances, the
employee must have in effect with the employer a Form W-4 claiming additional allowances.
The employee may also be entitled to fewer exemptions or need to have additional
tax withheld if, for instance, the employee has additional sources of income, such
as self-employment or investment income. Form W-4 is also used to authorize additional
withholding. See Publication 919.
Any unauthorized change or addition to a Form W-4 makes it invalid. This includes
taking out the language by which the employee certifies that the form is correct.
A Form W-4 is also invalid if, by the date an employee gives it to the employer,
he or she indicates in any way that it is false. An employee who files a false Form
W-4 may be subject to a $500 penalty.
An employer should not knowingly use an invalid Form W-4 to calculate withholding.
The employer should tell the employee it is invalid and ask for another one. If
the employee does not provide a valid one, the employer should withhold taxes as
if the employee were single and claiming no withholding allowances. However, if
a prior Form W-4 is in effect with respect to the employee, the employer should
continue to withhold in accordance with the prior form. Sections 31.3402(f)(2)-1(e)
and 31.3402(f)(5)-1(b), Employment Tax Regulations..
Employees sometimes claim exemption from
withholding on their Forms W-4. What are the applicable rules?
An employer is not required to deduct and withhold income tax upon payment of wages
to an employee if the employee has filed a valid certificate of exemption from withholding.
An employee may claim exemption from income tax withholding if he or she (1) had
no income tax liability last year and (2) expects to have no tax liability this
year. Code section 3402(n). See the Form W-4 instructions for more information.
An employee must submit a Form W-4 to the employer each year by February 15th to
claim exemption from withholding. If the employee does not provide a new Form W-4,
the employer must withhold tax as if the employee were single with zero withholding
The employer must send the IRS copies of Forms W-4 received during the quarter from
employees claiming (1) more than 10 withholding allowances or (2) exemption from
withholding when the employee's wages are usually more than $200 per week. Section
31.3402(f)(2)-1(g), Employment Tax Regulations. See also Publication 15, pp. 12-13.