{"id":2856,"date":"2018-05-02T10:02:00","date_gmt":"2018-05-02T10:02:00","guid":{"rendered":"https:\/\/www.dailypay.com\/2018\/05\/02\/when-is-a-form-w-4-valid-or-not\/"},"modified":"2022-01-28T12:56:10","modified_gmt":"2022-01-28T17:56:10","slug":"when-is-a-form-w-4-valid-or-not","status":"publish","type":"post","link":"https:\/\/www.dailypay.com\/resource-center\/blog\/when-is-a-form-w-4-valid-or-not\/","title":{"rendered":"Payroll: When is a Form W-4 Invalid?"},"content":{"rendered":"\n

Onboarding comes with its fair share of HR heavy lifting, which includes distributing and collecting W-4 forms and entering that information into your payroll system.<\/em><\/span><\/p>\n\n\n\n\n\n\n\n

But this simple act comes loaded with hazards that you should be aware of. <\/span><\/p>\n\n\n\n

Today we\u2019ll review some obvious and not-so-obvious considerations with regard to the W-4.<\/span><\/p>\n\n\n\n

First, what is<\/em> a W-4?<\/strong><\/h2><\/div>\n\n\n\n

The <\/span>Form W-4<\/span><\/a> is a form that tells an employer the proper amount to withhold from an employee\u2019s paycheck for federal income tax.<\/span><\/p>\n\n\n\n

Withholding tax (also known as \u201cpayroll withholding\u201d) is essentially income tax that is withheld from employees\u2019 wages and sent directly to the IRS by an employer. By subtracting this money from each paycheck, the IRS is more or less withholding anticipated tax payments as they are earned.<\/span><\/p>\n\n\n\n

In general, if an employee elects for lower payroll withholding, they will owe more in income taxes at the end of the fiscal year. The higher the payroll withholding, the lower the end-of-year taxes, which might end up in a refund.<\/span><\/p>\n\n\n\n

When must a W-4 be completed? <\/strong><\/h2><\/div>\n\n\n\n

Before the first paycheck. There will be no withholding until the employee turns it in. <\/span><\/p>\n\n\n\n

What would make a Form W-4 invalid?<\/strong><\/h2><\/div>\n\n\n\n

If any of the required information is missing and\/or a signature is not provided. <\/span><\/p>\n\n\n\n

Deleting or altering official language on the form also invalidates it.<\/span><\/p>\n\n\n\n

Also, a Form W-4 will be invalid if an employee indicates in any way that it is false (i.e., they lie or fill out something incorrectly). <\/span><\/p>\n\n\n\n

What if I can\u2019t tell if it\u2019s invalid?<\/strong><\/h2><\/div>\n\n\n\n

It\u2019s really not black and white all the time. <\/span><\/p>\n\n\n\n

According to the <\/span>Treasury Regulations<\/span><\/a>, you should reject a Form W-4 if: <\/span><\/p>\n\n\n\n

“…the employee clearly indicates [that the W-4 is] false by an oral statement or by a written statement other than the W-4 itself.\u201d <\/span><\/p><\/blockquote>\n\n\n\n

A W-4 is also invalid if it contains an unauthorized alteration or addition.<\/span><\/p>\n\n\n\n

What\u2019s an \u201calteration or addition,\u201d exactly?<\/strong><\/h2><\/div>\n\n\n\n

Here\u2019s a handy definition<\/a>. Rather than \u201calter\u201d it (i.e., translate from IRS to English), we\u2019ll keep compliant and you can just mentally substitute the word \u201cinstrument\u201d for \u201cW-4\u201d so the definition is both germane and sensical. <\/span><\/p>\n\n\n\n

“Alteration” means (i) an unauthorized change in an <\/span>instrument<\/span><\/a> that purports to modify in any respect the obligation of a <\/span>party<\/span><\/a>, or (ii) an unauthorized addition of words or numbers or other change to an <\/span>incomplete instrument<\/span><\/a> relating to the obligation of a party.<\/span><\/p><\/blockquote>\n\n\n\n

What do I do with an invalid form?<\/strong><\/h2><\/div>\n\n\n\n

Don\u2019t use it! <\/span><\/p>\n\n\n\n

Ask the employee to fill it out again, this time correctly. <\/span><\/p>\n\n\n\n

If you can\u2019t squeeze a valid form out of them, you should withhold taxes as if the employee were single and claiming no withholding allowances. <\/span><\/p>\n\n\n\n

If you already have a valid Form W-4 on file for that employee, then simply withhold in accordance with the previous form.<\/span><\/p>\n\n\n\n

When does a new W-4 go into effect? <\/strong><\/h2><\/div>\n\n\n\n

Employers must implement a new W-4 by the start of the first payroll period ending on or after the 30th day from the date the employer receives. <\/span><\/p>\n\n\n\n

So let\u2019s say your new hire gets their W-4 in on time on the 4th of the month. Payday happens on the 15th and the 30th every month.<\/span><\/p>\n\n\n\n

The W-4 must be implemented by the 15th-of-the-month payroll, no later. Earlier is fine! <\/span><\/p>\n\n\n\n

Can I speed things along and do it for them?<\/strong><\/h2><\/div>\n\n\n\n

Nope. That\u2019s illegal. Thanks for asking. We admire your diligence. <\/span><\/p>\n\n\n\n

If an employee is having a tough time with the W-4, direct them to this IRS article about <\/span>Calculating Your Withholding Allowance. <\/span><\/a><\/p>\n\n\n\n

How often can an employee change a W-4? <\/strong><\/h2><\/div>\n\n\n\n

Any time and as often as they want! <\/span><\/p>\n\n\n\n

But you have to get all updated W-4s in before the next payroll. The most current W-4 must be signed by the employee and kept in the employee’s payroll folder to verify the amount of federal income tax withholding.<\/span><\/p>\n\n\n\n

How often do they need to update their W-4s?<\/strong><\/h2><\/div>\n\n\n\n

As often as they<\/span><\/a>:<\/span><\/p>\n\n\n\n