5. Income Tax Withholding Farmers and crew leaders must withhold Federal income tax from thewages of farmworkers if they are subject to social security andMedicare taxes. The amount to withhold is figured on gross wageswithout taking out social security and Medicare taxes, union dues,insurance, etc. You may use one of several methods to determine theamount of income tax withholding. They are discussed in section 13. Form W-4.To know how much income tax to withhold from employees' wages, youshould have a Form W-4, Employee's Withholding AllowanceCertificate, on file for each employee. Ask each new employee to giveyou a signed Form W-4 when starting work. Make the form effective withthe first wage payment. If a new employee does not give you acompleted Form W-4, withhold tax as if he or she is single, with nowithholding allowances. A Form W-4 remains in effect until theemployee gives you a new one. If an employee gives you a replacementForm W-4, begin withholding no later than the start of the firstpayroll period ending on or after the 30th day from the date youreceived the replacement Form W-4. Use Form W-4 only to determine income tax withholding. It has noeffect on social security, Medicare, state income tax, or any otherform of withholding. The amount of income tax withholding is based on marital status andwithholding allowances. Your employees may not base their withholdingamounts on a fixed dollar amount or percentage. However, the employeemay specify a dollar amount to be withheld in addition to the amountof withholding based on filing status and withholding allowancesclaimed on Form W-4. Employees may claim fewer cheap hotels in Valkenburgwithholding allowances thanthey are entitled to claim. They may do this to ensure that they haveenough withholding or to offset other sources of taxable income thatare not subject to withholding. Note:A Form W-4 that makes a change for the next calendaryear will not take effect in the current calendar year. Pub. 505, Tax Withholding and Estimated Tax, containsdetailed instructions for completing Form W-4. Along with Form W-4,you may wish to order Pub. 505 and Pub. 919, How Do IAdjust My Tax Withholding?, for your employees. When you receive a new Form W-4, do not adjust withholding for payperiods prior to the effective date of the new form; that is, do notadjust withholding retroactively. Also, do not accept any withholdingor estimated tax payments from your employees in addition towithholding based on their Form W-4. If they want additionalwithholding, they should submit a new Form W-4 and, if necessary, payestimated tax by filing Form 1040-ES, Estimated Tax forIndividuals. Exemption from income tax withholding for eligible persons.hôtels InnsbruckAn employee may claim exemption from income tax withholding becausehe or she had no income tax liability last year and expects none thisyear. However, the wages are subject to social security and Medicaretaxes. An employee must file a Form W-4 each year by February 15 to claimexemption from withholding. Employers should begin withholding afterthat date for each employee who previously claimed exemption fromwithholding but who has not submitted a new Form W-4 for the currentyear. Withhold tax as if the employee is single with zero withholdingallowances. Withholding on nonresident aliens.In general, if you pay wages to nonresident aliens, you mustwithhold income tax (unless excepted by regulations), social security,and Medicare taxes as you would for a U.S. citizen. You must also givea Form W-2 to the nonresident alien and file a copy with the SSA. Thewages are subject to FUTA tax as well. However, see Pub. 515,Withholding of Tax on Nonresident Aliens and ForeignCorporations, for exceptions to these general rules. Form W-4.To avoid underwithholding of income taxes, you should requirenonresident aliens completing Form W-4 to: Not claim exemption from income tax withholding. Request withholding as if they are single, regardless oftheir actual marital status. Claim only one allowance. However, if the nonresident alienis a resident of Canada, Mexico, Japan, or Korea, he or she may claimmore than one allowance. Request an additional income tax withholding amount,depending on the payroll period, as follows: nonresident For more information, get Pub. 515. Sending certain Forms W-4 to the IRS.You must send the IRS copies of certain Forms W-4 received duringthe quarter from employees still employed by you at the end of thequarter. Send copies when the employee claims (1) more than 10withholding allowances or (2) exemption from withholding and his orher wages would normally be more than $200 per week. You are notrequired to send any other Forms W-4 unless the IRS notifies you inwriting to do so. Each quarter, send to the IRS copies of any Forms W-4 that meeteither of the above conditions. Complete boxes 8 and 10 on any FormsW-4 you send in. You may use box 9 to identify the office responsiblefor processing the employee's payroll information. Also send copies ofany written statements from employees in support of the claims made onForms W-4. Do this even if the Forms W-4 are not in effect at the endof the quarter. You can send them to your IRS service center moreoften if you like. Include a cover letter giving your name, address,employer identification number, and the number of forms included. Incertain cases, the IRS may notify you in writing that you must submitspecified Forms W-4 more frequently to the IRS District Director. Base withholding on the Forms W-4 that you send in unless the IRSnotifies you in writing that you should do otherwise. If the IRSnotifies you about a particular employee, base withholding on thenumber of withholding allowances shown in the IRS notice. You will geta copy of the notice to give to the employee. Also, the employee willget a similar notice directly from the IRS. If the employee latergives you a new Form W-4, follow it only if (1) exempt status is notclaimed and (2) the number of withholding allowances is equal to orfewer than the number in the IRS notice. Otherwise, disregard it anddo not submit it to the IRS. Continue to follow the IRS notice. If the employee prepares a new Form W-4 explaining any differencewith the IRS notice, he or she may either submit it to the IRS or toyou. If submitted to you, send the Form W-4 and explanation to the IRSoffice shown in the notice. Continue to withhold based on the noticeuntil the IRS tells you to follow the new Form W-4. Filing Form W-4 on magnetic media.Form W-4 information may be filed with the IRS on magnetic media.If you wish to file on magnetic media, you must submit Form 4419, Application for Filing Information ReturnsMagnetically/Electronically, to request authorization. See Pub.1245, Izola hotel accommodation Specifications for Filing Form W-4, Employee'sWithholding Allowance Certificate, Magnetically or Electronically, forinformation on filing Form W-4 on magnetic media. To get additionalinformation about magnetic media filing, call the IRS MartinsburgComputing Center at 304-263-8700. Note:Any Forms W-4 with employee supporting statements that youmust submit to the IRS must be submitted on paper. They cannot besubmitted on magnetic media. Invalid Forms W-4.Any unauthorized change or addition to Form W-4 makes it invalid.This includes taking out any language certifying that the form iscorrect. A Form W-4 is also invalid if, by the date an employee givesit to you, he or she indicates in any way that it is false. If you receive an invalid Form W-4, do not use it to figurewithholding. Tell the employee it is invalid and ask for another one.If the employee does not give you a valid one, withhold taxes as ifthe employee were single and claiming no withholding allowances.However, if you have an earlier Form W-4 for this worker that isvalid, withhold as you did before. Amounts exempt from levy on wages, salary, and other income.If you receive a Notice of Levy on Wages, Salary, and Other Income(Form 668-W or 668-W(c)), you must withhold amounts as described inthe instructions for these forms. Pub. 1494, Table forFiguring Amount Exempt From Levy on Wages, Salary, and Other Income(Forms 668-W and 668-W(c)), shows the exempt amount. If a levy issuedin a prior year is still in effect, use the current year Pub. 1494 tocompute the exempt amount. How To Figure Income Tax Withholding There are several ways to figure income tax withholding: Percentage method (see pages 20-21). Wage bracket tables (see pages 22-41). Also seesection 13 for directions on how to use the tables for employeesclaiming more than 10 allowances. Alternative formula tables for percentage method withholding(see Pub. 15-A). Wage bracket percentage method withholding tables (see Pub.15-A). Other alternative methods (see Pub. 15-A). Employers with automated payroll systems will find the twoalternative formula tables and the two alternative wage bracketpercentage method tables in Pub. 15-A useful. If an employee wants additional tax withheld, have the employeeshow the extra amount on Form W-4. Supplemental wages.Supplemental wages are compensation paid to an employee in additionto the employee's regular wages. They include, but are not limited to,bonuses, commissions, overtime pay, accumulated sick leave, severancepay, awards, prizes, back pay and retroactive pay increases forcurrent employees, and payments for nondeductible moving expenses.Other payments subject to the supplemental wage rules include taxablefringe benefits and expense allowances paid under a nonaccountableplan. If you pay supplemental wages with regular wages but do not specifythe amount of each, withhold income tax as if the total were a singlepayment for a regular payroll period. If you pay supplemental wages separately (or combine them in asingle payment and specify the amount of each), the income taxwithholding method depends partly on whether you withhold income taxfrom your employee's regular wages: If you withhold income tax from an employee's regular wages,you can use one of the following methods for the supplemental wages: Withhold a flat 28% from each payment. Add the supplemental and regular wages for the most recentpayroll period this year. Then figure the income tax withholding as ifthe total were a single payment. Subtract the tax already withheldfrom the regular wages. Withhold the remaining tax from thesupplemental wages. If you did not withhold income tax from the employee'sregular wages, use method 1b above. (This would occur, for example,when the dollar amount of the employee's withholding allowancesclaimed on Form W-4 is more than the wages.) Regardless of the method you use to withhold income tax onsupplemental wages, supplemental wages are subject to social security,Medicare, and FUTA taxes.