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Form W-4 & Wage Withholding
Question: If an employee claims more than 10 allowances on their Form W-4, does the employer have to report this to the IRS?
This requirement has been eliminated:
- In the past, employers routinely had to 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 will also continue to review 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.
- Publication 15, (Circular E), Employer's Tax Guide
- Tax Topic 753, Form W-4 - Employee's Withholding Allowance Certificate
Category: Small Business, Self-Employed, Other Business
Subcategory: Form W-4 & Wage Withholding