Annual Filing of Employee Withholding Exemption Certificate

Employees who currently claim exemption from Federal and/or State income tax withholding should be made aware that this exemption from withholding requires an annual filing of the Form W-4/MW-507.  Those employees who currently claim exemption from withholding will find the exemptions block of their Employees Earnings Statement filled with an “EX” for the appropriate withholding tax.

Under current Federal tax law, the claim of exemption from Federal withholding is very limited.  If an employee expects to be claimed as a dependent on another person’s tax return (for example, on a parent’s tax return), the employee may not be exempt.  Current exempted employees should review their claim of exemptions and:

• If the employee expects to have Federal and/or State income tax liability for calendar 2008, submit a new W-4/MW-507 as soon as possible.  Remember to sign and date the form (using  the date you sign the form before submitting to Central Payroll Bureau.  Please note that this filing pertains only to those employees who are changing from exempt to taxable.
• If the employee wants to continue claiming exemption from Federal and/or State withholding tax for calendar 2008, file a new form W-4/MW-507 on or before February 15, 2008.  The form W-4/MW-507 will be processed as quickly as possible but not retroactively.

IRS regulation requires employers to institute maximum tax withholding for those employees who are currently claiming exempt status but do not re-file with their employer by February 15, 2008.

Form W-4/MW-507 is available from our web site.  The net pay calculator is also available.  Employees can estimate their tax withholdings by using this interactive tool.