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Jonas Construction Buyer Guide Sky

Date Posted: 8/21/2013

Breaking Down the W-4

By Steve Kania of SurePayroll 

The Employee’s Withholding Allowance Certificate (Form W-4) gives your business clients four crucial types of information: 

Whether to withhold taxes at the single or married rate
How many withholding allowances are claimed
Whether the employee wants any additional amount withheld
Whether the employee is claiming to be exempt from withholding

All employees should complete a Form W-4 when they are hired. Employees need to fill out a new form if they get married, or if they’re withholding too much or too little from their paychecks. A payroll calculator can help figure out how withholding status would affect a paycheck. 

Here are some other key factors your clients should be aware of when dealing with the W-4: 

If a new employee does not complete a form or the form is invalid, the employer must withhold as if the employee were single with no allowances. 
If allowances increase (adoption or childbirth), employees can submit an amended form.
If allowances decrease employees must submit an amended form within 10 days. Circumstances where this might occur include: 

o Divorced or legally separated
o No longer supporting a dependent
o Nonworking spouse take a job

Employers are required to monitor employees for changes that decrease allowances.
The death of a spouse doesn't affect withholding marital status until the next year.
Employer should notify employees by December 1 that they need to amend the form if their filing status or number of allowance has changed.
Changes cannot be made in advance.
Any change submitted by an employee to an employer must be reflected no later than the first period ending on or after the 30th day after the form was received.
If form is invalid or incomplete the employer should not use it to calculate taxes.
Employees can be exempt from withholding taxes.

In my next post, we’ll discuss how employees can be exempt from the W-4. 


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