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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