W-4's

njjel

Can anyone tell me if it is a legal requirement to have employees fill out a new W-4 form at the beginning of each calendar year?

Down_the_Middle

It is not a legal requirement on the part of the employer.

Pork

nijjel & middle-of-the-road: I am not so sure about that. That issue has come up recently, and I have asked my corporate office for research. I am reviewing everything I can, and for some reason I can't find the reference any more. it has something to do with reverifying SSN#. It is the W-4 redone yearly that keeps the employer from a $50.00 fine or fee charged per wrong number by the SSA, if you have the wrong SSN associated with the employee name on Income Tax or with holding data. i wish I could tell you more but can't just yet! There is a new SSN# verifying system being tested as a part of the INS issues with undocumented workers. NC I believe is one of those test states. Our corporate headquarters is in NC, thus my recent knowledge, as flakey as it is! Pork

njjel

Yes, I can see that that would take care of the SS# issue, however I do not believe it is required to do new W-4's each year. I just wanted to know for certain! :-)

Down_the_Middle

I had a visit from an IRS auditor a few weeks ago (for which I'm still taking Zantac) and he confirmed for one of my staff that yearly revisions to the W-4 were not required. Obviously, ee's can make revisions as they deem necessary, but it's not an employer responsibility.

Lori B

This is not required annually (unless ee claimed to be exempt from all tax, or over 10 exemptions in prior year). Pork is referencing the safe harbor provisions of the new SSA verification requirements. If an employer updates W-4s annually, it creates a safe harbor of no penalties if the ee provided the wrong info. I find this process to be wildly unrealistic and I have better things to do with my time than get new W-4s each year. We have instead implemented a much more rigid approach to how the W-4 is filled out the first time to ensure we get it right up front.

njjel

May I inquire what your "rigid approach" involves?

Lori B

We require that the ee produce the SSA card so that we can compare it to the W-4 at hire now. This is separate and apart from any I-9 verification. (where it would be illegal to require that specific document as a form of identification). We also call the SSA verification hotline to confirm that all new hires check out on their end as well. It mas made for a lot more work up front, but we have had issues with false SSNs in the past in certain parts of the country.

Cxjo

If an employee is using the Advance Earned Income Credit (Form W-5) from the IRS, THAT needs to be completed each and every year they want it. The EIC does not carry over from year to year.