When filling out a W-4 many employees assume that their tax status will continue to stay the same, unless they make changes to it. This is not the case for employees who claim exempt on their taxes…

If an employee claims exempt on their W-4’s, the employer will not withhold federal tax on their income, however Social Security tax and Medicare will be applied.  Every year, those who claim exempt on their W-4 will need to renew their status in the beginning of the new year, if they wish to continue as exempt. Employees who claimed exempt in 2006 will have their exempt status expire in February 16, 2007 unless they renew their status by filling out a 2007 W-4. If the employee does not renew their status by the specified date, their tax status will default to single and 0 withholdings.  At the beginning of the new year, StaffScapes sends a letter to their exempt employees to remind them of the deadline, and attach a new W-4 for them to complete and update.

You can find more information about tax exempt status and W-4’s at www.irs.govor by calling StaffScapes at 303-466-7864.