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Form W-4: Employee withholding allowances

For many states, employers can use the same filing status that an employee has entered on the federal Form W-4 if the employee wants to claim the same marital status, number of regular allowances, and/or the same additional dollar amount to be withheld for state and federal purposes.

Form W-4: Federal withholding certificate (Item 5, Total number of allowances claimed)

In Online Payroll, enter item 5 from the employee's completed Form W-4 as the total number of allowances. This is the number of withholding allowances an employee wants to claim. The more allowances an employee claims on Form W-4, the less income tax will be withheld. An employee will have the most tax withheld by claiming 0 allowances.

Per the IRS guidelines, if an employer does not have a completed Form W-4 from an employee, withhold their tax as single with no withholding allowances.

The number of allowances your employee can claim depends on the following factors:

  • How many exemptions your employee can take on a tax return
  • Whether your employee has income from more than one job
  • What deductions, adjustments to income, and credits your employee expects to have for the year
  • Whether your employee will file as head of household

If your employee is married, it also depends on whether the spouse also works and claims any allowances on his or her own Form W-4.

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