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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15056
Experience:  15years with H & R Block. Divisional leader, Instructor
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Regarding State and Federal Withholding Tax: I recently

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Regarding State and Federal Withholding Tax:

I recently had a business become insolvent due to the economy with a significant loss.

Several months ago I took a full time hourly position with a huge company at a very modest wage.

My business loss is probably enough to put me in a zero tax situation for several years.

I request to be exempt from Federal and State withholding tax on my W4 forms.

I have been employed 3 months now and despite the W4 and several calls they are still withholding Federal and State tax. They seem sympathetic when I call and claim it takes a while to "get into the system".

2 questions:

1. Any suggestions on how I can get this accomplished?

2. Is there any way to get these funds back. (Its not an enormous amount but I am under financial duress and every dollar helps at this point.

Robin D :

Hello and thank you for using Just Answer,
An employee may change the number of withholding allowances or his or her withholding rate (marital status) on Form W-4 for any number of reasons, such as a marriage, a change in the number of dependents, or a change in the amount of itemized deductions or tax credits anticipated for the tax year. If an employer receives a revised Form W-4 from an employee, they must put it into effect no later than the start of the first payroll period ending on or after the 30th day from the date they received the revised Form W-4.
The exception for this is if the employer received a "lock-in" letter form the IRS. This letter states that the employer must withhold at the rate the IRS determines.

Robin D :

If an employee qualifies, Form W-4 is also used by the employee to tell the employer not to deduct any federal income tax from his or her wages. To qualify for this exempt status, the employee must have had no tax liability for the previous year and must expect to have no tax liability for the current year.

Robin D :

If you had a tax liability for the previous year you are not qualified to claim exempt yet.

Robin D :

The only way to "get back" your withholding is when you file a tax return.


Thank you.

Robin D :

You are most welcome


I had no tax liability for 2012. That being said any suggestion to get my employer in compliance?

Robin D :

You can explain to them that you know they have extended the time to comply. That may seem aggressive but in reality, that is what they have done.

Robin D :

Here is a link to the IRS page that explains this

Robin D :

In case you need to send them a copy


Yes I will do so thanks. I am not concerned about being aggressive at this point. Thank you for your help!

Robin D :

Again, you are welcome

Robin D :

Your positive rating is always thanks enough.

Robin D. and other Tax Specialists are ready to help you
Customer: replied 3 years ago.

I have been working for this company for almost 4 months now and they are still not honoring my W4 stating that I am exempt. (And I am based on the criteria you have stated).


I have a feeling the change is never going to occur unless I get aggressive with them.


I have informed my contact in payroll that I am aware of the 30 day limit for making the change.

Any suggestions as to how to proceed?

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