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Date: December 7, 2005 Bulletin Number: 602
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Subject

Claiming Exemption from Federal and/or State Tax Withholding

Purpose

To explain the procedure for the annual review of employees who claim exemption from Federal and/or State tax withholding.

Affected Employees

Employees claiming exemption from Federal and/or State tax withholding.

Background

Internal Revenue Service regulations require individuals claiming Federal tax-exempt status to file a new Form W-4 by February 15 of each year.

New York State Department of Taxation and Finance regulations require individuals claiming State tax-exempt status to file a new Form IT-2104-E annually.

The Forms W-4 and IT-2104-E for the current year’s exemption must be retained in the employee’s agency payroll office.

Control-D Report

NPAY738 identifies employees claiming Federal and/or State tax- exempt status in each agency. This report will be available on December 30, 2005.

Agency Actions

If an employee is identified as claiming exemption from Federal tax withholding and does not provide a new Form W-4 by February 15, 2006, the agency must change the employee’s status to ‘Single 0’ on the Employee Tax Data Page – Federal Tax Data.

If an employee is identified as claiming exemption from State tax withholding and does not annually provide a new IT-2104-E, the agency must change the employee’s status to ‘Single 0’ on the Employee Tax Data Page - State Tax Data.


Questions

Questions regarding this bulletin may be directed to the Payroll Deductions mailbox.