Employers use an employee's IRS Form W-4 to determine the amount of federal income tax to withhold from his wages. This form provides the employer with the marital status and number of dependents the employee is claiming. The employer is also able to withhold an additional dollar amount, as specified by the employee. This vital form is usually included in the paperwork completed by newly hired employees.
Employers are required to have a completed W-4 on file for each employee. This form should be completed before an employee begins work and made effective for the employee’s first pay period. Forms are also available in Spanish. An employer can receive W-4 forms electronically.
W-4 forms do not expire; they remain in effect until the employee completes another W-4. Employees who are not required to have taxes withheld must complete a new W-4 by Feb. 16 each year. If the employee does not resubmit a W-4 continuing his exempt status, the employer should withhold income tax as if he is single with no dependents.
The IRS may request to inspect an employer's W-4 forms. If the IRS sends a representative to an employer’s office, they will look at original W-4 forms for some or all of the business’ employees. Alternatively, the IRS may ask the employer to submit paper or electronic copies of the W-4 forms for select employees or the entire workforce. After review, the IRS may inform the employer that an employee is not entitled to the withholding he had claimed. The notice sent by the IRS will inform the employer of the correct withholding for that employee and the date the employer should transition to that withholding.
An employer may use a form of their own design as a substitute as long as it contains the exact language as the IRS Form W-4. The substitute form is required to meet all IRS requirements. Employee-designed W-4 forms are not valid.
W-4 forms can be downloaded from the IRS website or ordered by telephone: (800) 829-3676. The forms can also be purchased in bulk from office supply stores.