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

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Frequently Asked Tax Questions

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

Rev. date: 1/2010

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

Employee's Withholding Allowance Certificate
Employment Tax
Withholding Tax

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, valid 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.

Rev. date: 1/2010

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

Employee's Withholding Allowance Certificate
Employment Tax
Withholding Allowances
Withholding Tax

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. The requirement no longer exists.
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. The IRS may send you a letter (commonly called a "lock-in-letter") specifying the withholding rate and allowances to use to calculate the amount of tax to withhold from wages paid to a specific employee.

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