W4

1.16 IRS Procedures: W-4 - Allowances, Excess FICA, Students, Withholding

As a full-time student, am I exempt from federal taxes?

Every U.S. citizen or resident must file a U.S. income tax return if certain income levels are reached. There is no exemption from tax for full-time students. Factors that determine whether you have an income tax filing requirement include:

• the amount of your income (earned and unearned),
• whether you are able to be claimed as a dependent,
• your filing status, and
• your age.

If your income is below the filing requirement for your age, filing status, and dependency status, you will not owe income tax on the income and will not have to file a tax return. You may choose to file if you have income tax withholding that you would like refunded to you.

You may have given your employer a Form W-4 (PDF), Employee's Withholding Allowance Certificate, claiming exemption from withholding. To claim exemption from withholding, you generally would have to have had no tax liability the previous year and expect none in the current year. An exemption certificate is good for the calendar year.

What can be done if an employer will not withhold income taxes, social security, and Medicare from my pay?

Generally, in situations such as this, the employer is not considering you to be an employee. Rather, you are being treated as an independent contractor (self-employed person). If you cannot resolve this matter with your employer, and if you feel that an employer-employee relationship exists, you should submit a Form SS-8 (PDF), Determination of Employee Work Status for Purposes of Federal Employment Taxes and Income Tax Withholding. The factors used to determine if an employer-employee relationship exists are covered in Chapter 2 of Publication 15-A (PDF), Employer's Supplemental Tax Guide.

If your status as an employee is not at issue, it may be that you are in a category of employment whose earnings are not defined as wages under U.S. federal tax and social security law. Find out from your employer the reason that social security and Medicare taxes and income taxes are not being withheld from your pay. If you have further questions, contact the IRS at 800-829-1040 or visit an IRS walk-in office for assistance.

12.4 Small Business/Self-Employed/Other Business : Form W-4 & Wage Withholding

Can an employer take out taxes if a Form W-4 was never filed?

Yes, the employer is required to withhold income taxes. Chapter 9 of Publication 15, Circular E, Employer's Tax Guide, states that if an employee does not give you a completed Form W-4 (PDF), Employee's Withholding Allowance Certificate, withhold tax as if he or she is single, with no withholding allowances.

The employer is also required to withhold social security and Medicare taxes.

If an employee claims more than 10 exemptions on their Form W-4, does the employer have to report this to the IRS?

No, this requirement has been eliminated. In the past, employers had to routinely send the IRS any Form W-4 (PDF), Employee's Withholding Allowance Certificate, claiming more than 10 allowances or claiming complete exemption from withholding if $200 or more in weekly wages was expected. However, Forms W-4 are still subject to review. Employers may be directed (in a written notice or in future published guidance) to send certain Forms W-4 to the IRS. The IRS also will be reviewing employee withholding compliance and you may be required to withhold income tax at a higher rate if notified to do so by the IRS.