Form W-4: Best Practices and Compliance
Key Take Away:
This webinar will discuss the function and requirements of Form W-4 and how the information it provides is critical to the payroll process as well as how to avoid problems and identify and correct problems such as invalid or improperly filled out forms and errors in processing. It will also discuss the proper handling of special situations and requirements such as employee taxation exemption from withholding and nonresident alien W-4 Forms.
Form W-4 has just seven lines but it is a fundamental part of the payroll process. In addition to information concerning the amount to withhold for income tax, the W-4 provides the employer with documentation of due diligence in soliciting employee name, Social Security Number, and address information. It is critical for penalty mitigation in the event the information is incorrect.
The Form provides a basis to have the correct amount of tax for employee withholding, but if it is prepared incorrectly, the employee may be subject to penalties. While the employer is not responsible for assuring correctness of the employee’s claims, the employer is responsible for due diligence with regard to invalid forms and withholding according to the employee instructions provided by the form.
Improper handling of the employee verification information can create problems in payroll compliance and employee morale as well as costly expenditures for error corrections and non compliance.
Why should you attend:
While Form W-4 has only seven information lines, the information contained on the Form is critical to the payroll process. Failures at the employer end can lead to compliance and employee morale issues with regard to amounts withheld, timely processing, and incorrect information returns.
Employers may be held liable or penalized for incorrect withholding tax where the employer failed to solicit or timely process the forms or fails to withhold according the information provided on the forms.
Areas Covered in this Webinar:
• The legal requirement that the employer withhold income tax from employee compensation
• Form W-4 line by line including the information to be included by the employee and entries that can cause the form to be invalid, the special instructions for nonresident aliens, state withholding certificates and certificates of non-residency, and effective dates for new and revised W-4 information
• When an employee must submit a new W-4 and when an employee may submit a new W-4
• Requirements for electronic W-4 Forms
• How to deal with problems such as invalid or incorrectly prepared forms, name and Social Security Number mismatches, notices from the IRS or Social Security Administration, and lock in letters. The difference between invalid forms and questionable forms
• When W-4 Forms must be sent to the IRS
• The IRS matching process and how to use the Social Security Number Verification System and how to make verification part of the employer payroll taxes process
• Penalties for failing to withhold or deposit tax and reporting errors
• Establishing reasonable cause for avoidance of penalties and taking advantage of de minimis error exceptions to penalties
• Record retention requirements – how long must an employer maintain the forms including successor employer requirements
• Understand the employer’s legal obligation to withhold tax
• Know what must or must not be included on each line of Form W-4 and how to identify invalid Forms
• Understand the importance of SSN verification and how to include it in the payroll process
• Know how to deal with special problems and situations related to Form W-4 such as non-resident alien forms, lock in letters, and invalid and questionable employee submissions
• Be aware of the penalties for non-compliance and how to mitigate or avoid the penalties by following due diligence procedures that establish reasonable cause
• Know the record retention requirements for employee tax form
• Be aware of the special requirements for electronic W-4 Forms
• Be aware of state withholding certificate requirements
Who Will Benefit:
• Payroll Supervisors and Personnel
• Payroll Consultants
• Payroll Service Providers
• Public Accountants
• Internal Auditors
• Tax Compliance Officers
• Enrolled Agents
• Employee Benefits Administrators
• Officers and Managers with Payroll or Tax Compliance Oversight
• Company / Business Owners
• Managers/ Supervisors
• Public Agency Managers
• Audit and Compliance Personnel / Risk Managers
Patrick A Haggerty
Pat Haggerty is a tax practitioner, author, and educator. His work experience includes non-profit organization management, banking, manufacturing accounting, and tax practice. He began teaching accounting at the college level in 1988. He is licensed as an Enrolled Agent by the U. S. Treasury to represent taxpayers at all administrative levels of the IRS and is a Certified Management Accountant. He has written numerous articles and a monthly question and answer column for payroll publications. In addition, he regularly develops and presents webinars and presentations on a variety of topics including Payroll tax issues, FLSA compliance, and information return reporting.