Don’t forget Payroll’s Dec. 1 deadline
November 11, 2009 by Kerry IsbergPosted in: In this week's e-newsletter, Latest News & Views, Pay and benefits
To comply with federal regs, employers must send all workers an important message by Dec. 1.
IRS regs say Payroll must remind employees by 12/1/09 to file an amended Form W-4, Employee’s Withholding Allowance Certificate, if their filing status, exemption allowances or exempt status has changed since they last filed the form. A simple e-mail or paycheck stuffer will do the job. [IRS Regulations Section 31-3402(f)(2)-(1)(c)(3).]
For the procrastinators, there’s a grace period. Exemptions for 2009 don’t expire until 2/15/10. That means, though, that anyone who claimed “exempt” on the W-4 last year but didn’t provide an updated W-4 must be withheld from at the single marital status with zero withholding allowances, starting on 2/16/10. Changing the withholding is usually enough to get an employee’s attention – and have the person provide a new form, pronto.
To cut down on the number of employee questions, it may be useful to provide a copy of Publication 919, How Do I Adjust My Tax Withholding? That’ll help them decide whether the amount they’re having withheld compares to their projected total for the year. This will be especially important for those with earnings exceeding $130,000 (single) or $180,000 (married), so they can make sure they’re not underwithheld.
Note that employees can’t claim exempt if:
• Their income exceeds $950 and includes more than $300 of unearned income (e.g., interest, dividends), and
• Another person can claim them as a dependent on his or her tax return.
While it’s not Payroll’s job to police who claims exempt and who doesn’t, you may keep some people out of trouble with IRS if they’re aware of the guidelines.
Tags: Form W-4, IRS, Publication 919
November 16th, 2009 at 3:07 pm
I have read the section listed above and do not see where it says that employers must send notices to all employees. Can someone please link me the section where it says that? And possibly a sample of their notice? Any info would be appreciated. Thank you.
November 16th, 2009 at 3:28 pm
I agree with Cynthia, if the employeris required has to send this notice, is there an abbreviated version of the notice that can go along with payroll?
November 16th, 2009 at 3:43 pm
Publication 15 cites this date and need. It does not say how you need to remind employees, simply that it must be done.
November 16th, 2009 at 3:45 pm
I too have read the section and I don’t see anywhere that employers are to notify employees of anything by 12/1/09.
November 16th, 2009 at 4:05 pm
Jeanette – nice to see you name. Thanks for the post.
November 16th, 2009 at 4:07 pm
There it is, right on page 3 of pub 15.
How about this:
To: All Employees
From: Payroll Dept
Don’t forget to submit a new Form W-4 if your withholding allowances have changed or will change for next year.
Please double check the mailing address on your paycheck to make sure it is correct. Send any changes to XXX.
November 16th, 2009 at 4:13 pm
Thats good Suzy, however i thought it stated that if a employee claimed exempt they would have to change their w-4 and the drop deadline was 2-of 2010 or they would have to claim Single and zero… Your memo is just implying if they have changes.
November 16th, 2009 at 4:22 pm
I work with electricians. They move all the time and don’t bother telling me. I make them fill out a new W-4 every year just so I know where they live!!
November 16th, 2009 at 4:50 pm
That’s not noted in the Dec 1 deadline section of Pub 15, but feel free to add it in to your notice if you like. I have so few claiming exempt, I just contact them individually. In fact, I have none this year.
November 16th, 2009 at 5:14 pm
I operate a service bureau with over 250 clients on payroll. A little over 9,000 employees. In your opinion, would it be my responsibility to send these notices to each employee, or the responsibility of each individual company? Bear in mind, we do not provide an end-to-end HRO service. We simply do payroll and tax filing.
Just looking for opinions… Thx.
November 16th, 2009 at 5:21 pm
Hi Suzie, if you read above in this article it states it in the artice about the exempt. I thought employees are allowed to claim whatever they choose, and then by year end … tax time they have to claim the real deductions?
November 16th, 2009 at 5:24 pm
We will use something like this:
To: All Employees
From: Payroll
Date:
Subject: Federal Withholding Allowances
It’s time for you to review your federal withholding allowances and consider whether or not you need to make changes for 2010. If your filing status (married or single), exempt status, or exemption allowance qualifications have changed at some point during this calendar year, you will need to submit a new Form W-4 to Payroll. The 2010 Form W-4 has not yet been released but we will send it to all employees as soon as it is available.
Note: Any employee claiming “EXEMPT” in 2009 MUST submit a new Form W-4 for 2010 in order for this status to remain active. Failure to submit a 2010 Form W-4 will, by law, result in the Payroll Department changing your tax status to “Single status with -0- withholding allowances” after February 15, 2010. Contact Human Resources or Payroll if you have questions.
No action is required on your part if you have not claimed exempt and/or you have no changes in tax status to report.
Thanks!
November 16th, 2009 at 5:27 pm
I have talked to my payroll compnay, the letter is a coursey to the employees to let them knoiw the new year is coming etc and if they would like to chnage their deductions. If an employee who files EXEMPT ONLY, they are the ones they would have to 2 of 2010 or would be forced to file single and zero. Thanks for all the comments, it helped me. Thanks suzi for the memo, I just need to write it now. Have a nice holiday.
November 16th, 2009 at 5:54 pm
thats great Sandy!!!! Thanks
November 16th, 2009 at 7:15 pm
Thanks for the great sample Sandy!
November 17th, 2009 at 11:48 am
Sandy- Thanks for your well-done letter! I’ve sent it on to my translator so I can use it as a stuffer in the earnings statements, in both English and Spanish!
November 17th, 2009 at 11:51 am
This is what I plan to use – I hope it is sufficient. We are a small company with no exempt employees.
11/30/09 – File an amended Form W-4, Employee’s Withholding Allowance Certificate, if your filing status, exemption allowances or exempt status has changed since you last filed the form.
November 17th, 2009 at 11:56 am
Here is the link to publication 15:
http://www.irs.gov/pub/irs-pdf/p15.pdf
See page 3, top of 2nd column for the December 1 deadline info.
November 17th, 2009 at 12:20 pm
Thanks, Sandy, that saves me some time and it’s well written.
November 18th, 2009 at 11:03 am
I got the Spanish translation back on Sandy’s terrific notice!:
To: All Employees
From: Payroll
Date: November 19, 2009
Subject: Federal Withholding Allowances
It’s time for you to review your federal withholding allowances and consider whether or not you need to make changes for 2010. If your filing status (married or single), exempt status, or exemption allowance qualifications have changed at some point during this calendar year, you will need to submit a new Form W-4 to Payroll. The 2010 Form W-4 has not yet been released but we will send it to all employees as soon as it is available.
Note: Any employee claiming “EXEMPT” in 2009 MUST submit a new Form W-4 for 2010 in order for this status to remain active. Failure to submit a 2010 Form W-4 will, by law, result in the Payroll Department changing your tax status to “Single status with -0- withholding allowances” after February 15, 2010. Contact ____ in Human Resources if you have questions.
No action is required on your part if you have not claimed exempt and/or you have no changes in tax status to report.
Todos los Empleados:
Departe de: El Departmento de Salarios
Asunto: Retención Federal/Subsidios(dependientes)
Es tiempo revisar su retención federal de dependientes y considerar si o no necesita hacer cambios para el 2010. Si su Estado civil (casada/o “o” soltera/o) ha cambiado en las calificaciones de subsidio de exención en algún momento durante este año, debe presentar un nuevo formulario W-4 al departamento de salarios. Todavía no se ha lanzado el formulario W-4 del año 2010 pero le se lo enviaremos a todos los empleados en cuanto este disponible
Nota: Cualquier empleado alegando “EXENTO” en el ano 2009 debe presentar un nuevo formulario W-4 para el ano 2010 para que este estado este activo. Falta de presentación de el formulario W-4 2010 resultará, basado en la ley, que el Departamento de Salarios cambie el estado de impuestos a “Soltera/o con – 0-retención de dependientes” después de el 15 de Febrero del 2010. Si tiene preguntas contacte ____ en Recursos Humanos.
No se requiere ninguna acción por su parte si no han cobrado exentos o no tienes cambios en el informe de el Estado para los impuestos.
November 19th, 2009 at 10:49 am
Sandy, you are awesome. I appreciate your model notice. My question is: As employees change their W-4, are they not also required to complete a new K-4 (Kansas Withholding Allowance)?
November 19th, 2009 at 11:22 am
Carla, I’m in North Carolina and there is no requriement to complete a new state withholding form in our state. I can’t speak to the requirements in Kansas though.
November 19th, 2009 at 11:27 am
I would modify the memo to include federal and state forms. We deal w/a few states that do not have a state form. But for those that do, I like to get both fed & state forms new at the same time.