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emc011075
emc011075, Tax adviser
Category: Tax
Satisfied Customers: 2995
Experience:  IRS licensed Enrolled Agent and tax instructor
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If I change my w-4 at anytime of the year payroll check

Customer Question

If I change my w-4 at anytime of the year for my payroll check to exempt and then I request my vacation pay later that month are they supposed to take supplemental taxes out?
Submitted: 2 years ago.
Category: Tax
Expert:  emc011075 replied 2 years ago.
Hi. My name is ***** ***** I will be happy to help you.
Vacation pay if paid lump sum is subject to different federal wage laws and different withholding practices. Just like bonuses or severance pay supplemental wages are usually taxed at 25% flat tax rate regardless what's on your w4.
More about it here: https://turbotax.intuit.com/tax-tools/tax-tips/General-Tax-Tips/What-is-the-Federal-Supplemental-Tax-Rate-/INF19305.html
Sorry if this is not the answer you were hoping for.
I see you offline now. So if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.
Customer: replied 2 years ago.
So if I was to cash it out one week at a time I wouldn't be subject to the withholding if I was exempt for a short time?
Expert:  emc011075 replied 2 years ago.
That's correct. If it is paid as part of your regular wages, not as one time lump sum, that it is taxed according to your w4 withholding certificate. Exempt means no federal taxes, social security and Medicare tax will be withheld.