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Human Resource Management- Income Tax Withholding


Policy and Procedure

Subject Area: Payroll Taxes
Policy Title: Income Tax Withholding
Policy / Procedure No: PAY001
Responsible Office: HR/Payroll Service Center
Documents Needed: Forms W-4 and M-4

PURPOSE: An employee must complete Form W-4 so that Payroll Operations can withhold the correct amount of Federal and state income tax from his/her pay. If an employee wants to claim a different number of exemptions for Massachusetts state income taxes, Form M-4 should be completed as well.

DEFINITIONS: W-4 Form -- Employee's Withholding Allowance Certificate, the employer's basis for withholding Federal Income tax; M-4 Form -- Massachusetts Employee's Withholding Exemption Certificate, the employer's basis for withholding state income tax.

SCOPE: All University employees.

POLICY:

    1. All employees are required to prepare and submit a Form W-4 when hired.

    2. A current employee may file a new W-4 anytime the number of withholding allowances he/she claims changes.

    3. A current employee should file a new W-4 if his/her name or marital status changes.

    4. A W-4 remains in effect until the employee files another W-4. If a new employee fails to file a W-4, Payroll Operations withholds as if the employee is a single person who claims no withholding allowances.

    5. If the employee claims the same number of exemptions for Massachusetts and Federal income tax, only Federal Form W-4 needs to be completed.

    6. If you are non-resident alien (not a U.S. Citizen), it is important to note special instructions on Form W-4. In most cases, non-resident aliens are limited to claiming single, regardless of your actual marital status and should generally claim 1 withholding allowance. Please see instructions for Form 8233 before completing Form W-4.

    Please note Form 8233 and exemption from withholding on compensation for independent personal services of a non-resident alien individual is available at www.irs.gov

PROCEDURE:

    Employee obtains Form W-4 and Form M-4 from either the HR/Payroll Service Center, the HRM website, or the IRS web site listed above.

    Employee completes form and sends it to the Service Center for processing.

    Service Center staff updates the employee's online Master file record.

SPECIAL INSTRUCTIONS: New employees must file Form W-4. Current employees must file a new Form W-4 if personal data or withholding arrangements change. IRS publication 919 "Is My Withholding Correct" is available through the IRS web site (https://www.irs.gov/formspubs); its worksheets will help employees determine if they are having the right amount of taxes withheld.