When should an employee change his or her Form W-4?

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According to the Internal Revenue Service (IRS), employees may change their tax withholding any time they wish. There are also circumstances when an employee is required to provide his or her employer with a new Form W-4.

According to IRS Publication 505, an employee who experiences one of the following changes and who doesn't expect to have enough tax withheld during the remainder of the tax year to cover his or her tax liability must provide an updated Form W-4 to the employer within 10 days after the date of the change:

• A filing status change from Married Filing Jointly (or Qualifying Widow(er)) to Head of Household or to Single or Married Filing Separately, or from Head of Household to Single or Married Filing Separately.
• The employee or the employee's spouse starts another job and elects to use the Multiple Jobs Worksheet or the Tax Withholding Estimator to account for the other job in determining withholding.
• The employee or the employee's spouse starts another job and, as a result, files a new Form W-4 and selects the checkbox in Step 2(c), which, in this case, requires the employee or the employee's spouse to furnish a new Form W-4 for the first job and select the checkbox in Step 2(c).
• The employee or the employee's spouse expects a raise of more than $10,000 in regular wages (not a bonus) at a second or third job and the Form W-4 Step 2(c) checkbox is not selected on Form W-4.
• The employee no longer expects to be able to claim a Child Tax Credit taken into account on a previously furnished Form W-4.
• Other credits taken into account on a previously furnished Form W-4 decrease by more than $500.
• Deductions decrease by more than $2,300 from the amount the employee took into account on a previously furnished Form W-4.
• The employee no longer reasonably expects to claim exemption from withholding.
  
  

If an employee experiences one of the above changes but expects to have enough tax withheld to cover his or her tax liability for the year, there is no requirement to provide a new Form W-4 to the employer unless the employee's filing status changes from:

• Married Filing Jointly (or Qualifying Widow(er)) to Head of Household.
• Married Filing Jointly (or Qualifying Widow(er)) to Single or Married Filing Separately.
• Head of Household to Single or Married Filing Separately.

If one of the above filing status changes applies, an employee must provide a new Form W-4 to the employer no later than Dec. 1, or, if later, 10 days after the effective date of the change.

Overall, employees may change their withholding for any reason and may do so whenever they wish. Employers must put an employee's new Form W-4 into effect no later than the start of the first payroll period ending on or after the 30th day after receipt of the revised Form W-4.