State Agencies Bulletin No. 439

Subject
Claiming Exempt from Federal and/or State Tax Withholding
Date Issued
November 5, 2005

Purpose

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

Affected Employees

Employees claiming to be exempt from Federal and/or State tax withholding.

Background

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

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

The W-4's and IT-2104-E's for the current year's exemption are to be retained in the employee's payroll office.

Control-D Report

NPAY738 identifies employees in your agency claiming Federal and/or State tax-exempt status. This report will be available on December 31, 2003.

Agency Actions

If an employee is identified as claiming tax-exempt from Federal withholding and does not provide a new W-4 by February 15, 2004, change their status to 'Single 0' on the Employee Tax Data Page - Federal Tax Data.

If an employee is identified as claiming tax-exempt from State withholding and does not annually provide a new IT-2104-E, change their 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.