The Internal Revenue Service doesn't have a special category for full-time or part-time students. This means being a student doesn't directly affect how you complete the W-4 form your employer gives you when you go to work. However, there are a couple of situations students often encounter that indirectly impact the amount of payroll taxes your employer should deduct from your paycheck. When you attend school full-time, your parents can claim you as a dependent until the year you turn 24. If they do, it changes what you need to put on a W-4. Also, students often have small incomes and may qualify to be exempt from income tax withholding altogether, although employers must still take out Social Security and Medicare taxes.
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Withholding Allowances
Fill out the W-4 worksheet to find the number of withholding allowances to claim. On line A of the worksheet, write in "1" unless you are claimed as a dependent. If you are a dependent, enter "0."
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Put "1" on line B if you have one job. If you have a second job or you are married and your spouse is employed, enter "0" when the total wages from extra jobs add up to more than $1,500 for the year. If you are claimed as a dependent, skip lines C through G and go to line H on the worksheet.
Filing Status
Write "1" on line C if you are married. This is optional if you or your spouse works. You also can enter "0," which causes more income tax to be withheld and reduces any amount you might owe the IRS when you file your annual return. Enter the number of dependents you claim on line D. Put a "1" on line E only if your filing status is "head of household."
Child and Dependent Tax Care Credit
Enter "1" on line F if you have dependents and you must pay more than $2,000 to hire someone to watch them while you and your spouse work or go to school. This applies only if you will claim the Child and Dependent Care Tax Credit when you file your taxes.
Claim withholding allowances to get the benefit of the Child Tax Credit by reducing your payroll taxes. Count each dependent child as two withholding allowances, then subtract one if you have two to four kids or subtract two if you have more than four. For example, if you have two children, this works out to three allowances, so enter "3" on line G.
Do the Math
Add up lines A through G and write the total on line H. Transfer the number on line H to box 5 of the W-4 form. Write your name, Social Security number, address and filing status in boxes 1 through 4.
Write a dollar amount in box 6 of the W-4 only if you want to have an extra amount of money withheld from your paycheck. You might want to do this if you have a lot of taxable non-wage income such as interest or dividends.
Exemption from Withholding
Write "Exempt" in box 7 only when you qualify to be exempt from federal income tax withholding. As of 2017, if someone else claims you as a dependent, you can't claim exemption from withholding if your income exceeds $1,050 and includes more than $350 of unearned income. If you are not a dependent, you qualify if you had no tax liability last year and don't expect to owe the IRS any federal income tax this year.