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Are employers required to have employees complete a new W-4 each year?

Not necessarily. A W-4 form remains in effect until an employee submits a new one except when an employee claims to be exempt from income tax withholding, (not to be confused with the Fair Labor Standards Act's use of the term "exempt" for overtime purposes).

Employers should ensure they have new W-4s for:

  • New employees. Employers should keep copies of the most current W-4s on hand. If the employee needs to change the information later, the employee must fill out a new form, according to the Internal Revenue Service (IRS).
  • Employees who had a change in withholding events during the year. Events during the year may change an employee’s exemptions, adjustments, deductions or credits he or she may expect to claim when filing a tax return. When this happens, the employee will need to give the employer a new W-4 to adjust his or her withholding. The most recent version of Form W-4 should be used in these circumstances.
  • Employees claiming exemption from withholding. To continue to be exempt from withholding in the next year, employees must give employers a new W-4 claiming exempt status by Feb. 15 of that year. If an employee doesn't give you a new Form W-4, employers must withhold tax based on the last valid Form W-4 for the employee that doesn't claim exemption from withholding or, if one doesn't exist, as if he or she is single with zero withholding allowances.

According to IRS Publication 15, employers are to remind employees before December 1 each year to submit a new W-4 form if their withholding allowances have changed or will change for the next year. If the employee does not give the employer a valid W-4 as required, withhold tax as if he or she were single with no other adjustments, advises the IRS.


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