How is the correct federal withholding tax determined?

Form W-4, Employee's Withholding Allowance Certificate, must be filled out on or before the date of starting a new job. Form W-4, which is designed for employees to fill out, ensures that employers withhold the correct federal income tax from their pay. The form allows employees to claim personal allowances from withholding, which reduces the amount of money withheld. For more information on Form W-4, see also ¶36,220 , What are the rules for Form W-4?

Employee's name and social security number. Be sure to get the employee's social security number and name exactly as they appear on their Social Security card. The employee must give you his or her social security number. You must note the number in your records.

If the employee has neither a social security number nor a receipt indicating that an application for a social security number has been received, the employee must give the employer a dated and signed written statement that contains the employee's name, address, gender, and date/place of birth.

What if the employee fails to give you a social security number? If the employee has not given you a social security number, you must request it, stating that it is required by law. If the employee still does not give you the number, you should attach a signed affidavit to any return requiring the employee's social security number, stating that the number is unknown and that the employee was requested to provide it.

What do you do if Form W-4 is invalid? If an employee fills out an invalid Form W-4, you must consider it to have no effect on computing withholding, and you must inform the employee that the certificate is invalid and request a new one. If the new employee refuses, you must withhold from the employee as if he or she were single, claiming no exemptions. Examples of situations that would make a Form W-4 invalid include an employee claiming more than ten withholding allowances, an employee claiming to be exempt from withholding and earning more than $200 a week when the Form W-4 is filed (you must withhold on the basis of the statements made in that certificate until receipt of a notice from the IRS), an employee indicating that Form W-4 contains false information, or alteration of the W-4.

What do you do if the employee fails to submit Form W-4? In that case, the employer must withhold as if the employee is single and had claimed no exemptions.