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Can an “additional amount” on the W-4 be a percentage?

by on
in Office Management,Payroll Management

Question: We recently acquired a new company. Our payroll system kicked out an acquired employee’s W-4 form. He claims single status-99 with an additional 20% on his form. This W-4 seems contrary to wording on the W-4 itself. What do we tell him?

Answer: You tell him he must submit a valid W-4 to you on which he indicates the number of withholding allowances. If he wants an additional amount withheld, he must write in a dollar amount.

Income tax withholding is based on the number of withholding allowances an employee claims; it can’t be based on a percentage.

This employee, however, has bigger problems than misunderstanding how income tax withholding works. You may consider his W-4 invalid because it claims 99 allowances. If he provides you with a new form that’s similar to his current form, or doesn’t provide you with a new form, withhold as if he is single and claiming no withholding allowances until he provides a valid form.

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{ 1 comment… read it below or add one }

CM May 24, 2013 at 11:16 am

My only question is regarding the “You may consider his W-4 invalid because it claims 99 allowances” statement. I have looked and cannot find a reference to a limit on the specific number of allowances that can be claimed. If 99 is invalid, what about 50, 20, 10??? What is the magic number of allowances that makes a W4 suddenly invalid?

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