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Can an employee choose to be exempt?

Can an employee choose to be exempt?
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Customer reply replied 1 month ago
Hello
Answered in 19 minutes by:
3/7/2018
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 17,624
Experience: 15years with H & R Block. Divisional leader, Instructor
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Hello, I'm Robin. Welcome to JustAnswer. I'm reviewing your question now and typing up my reply. I'll post that in just a few moments.

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Only if they meet meet both of the following conditions for exemption.

• Last year they had a right to a refund of all federal income tax withheld because they had no tax liability, and

• This year they expect a refund of all federal income tax withheld because they expect to have no tax liability.

That does not mean that they do not owe but their income is so low that no tax at all is calculated on it.

Please let me know if you need more information.
If not then please scroll up to see the STARS to rate so I am credited. Thank you

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Customer reply replied 1 month ago
I’m confused

About what?

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Customer reply replied 1 month ago
only if they got refunded all of their federal tax but made over a certain amount?
Customer reply replied 1 month ago
as an employer can we deny them from being exempt

No you cannot

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Customer reply replied 1 month ago
if they choose to be exempt we just enter them as exempt?

You can remind them that the IRS may send a lock in letter to request they have Single and ) status if they are not really exempt

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Customer reply replied 1 month ago
they get penalized if they choose to qualify but don’t?

Yes

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You do not know if they are really exempt

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That is why they have to sign the W4 where it says they understand and know

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Customer reply replied 1 month ago
Ok

Confusion gone?

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Customer reply replied 1 month ago
Also if they choose exempt do we pay overtime or no?

That has nothing to do with labor laws that is just for withholding.

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With you mentioning overtime, I would not be surprised if next year you do receive a LOCK IN letter on them and are forced to use Single and 0

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Customer reply replied 1 month ago
when we hire them we put exempt or non exempt on their paperwork

You mean after they complete the W4?

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Customer reply replied 1 month ago
We wait till after they complete that correct

Then yes, in your system or on their paperwork you indicate the exempt status so no income tax it withheld. SS and Medi and everything else still applies.

You must have that W4 with their signature so when they yell at tax time you show them what they claimed

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Customer reply replied 1 month ago
Does the lock in letter affect us or just them

Just them. It tells the employer to not let them change that and that for 3 years they are Single and 0 allowances

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Customer reply replied 1 month ago
Perfect

You are most welcome.
A positive 5 star rating is appreciated so I am credited for assisting.

Robin D.
Robin D., Senior Tax Advisor 4
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