Can an employer take out taxes if a Form W-4 was never filed?

Yes, the employer is required to withhold income taxes. Publication 15, Circular E, Employer's Tax Guide, states that if an employee does not give you a completed Form W-4 (PDF), Employee's Withholding Allowance Certificate, withhold tax as if he or she is single, with no withholding allowances.

The employer is also required to withhold social security and Medicare taxes.

References:

• Publication 15, Circular E, Employer's Tax Guide
• Form W-4 (PDF), Employee's Withholding Allowance Certificate
• Tax Topic 753, Form W-4 - employee's withholding allowance certificate

If an employee claims more than 10 exemptions on their Form W-4, does the employer have to report this to the IRS?

Yes, if you receive a Form W-4 (PDF), Employee's Withholding Allowance Certificate, on which the employee claims more than 10 withholding allowances, you must send a copy of that Form W-4 to the IRS service center with your next employment tax return.

Also, if an employee claims exemption from withholding and his or her wages would normally be expected to exceed $200 or more a week, you must also send a copy of that Form W-4 to the service center with your next employment tax return.

If you want to submit the Form W-4 earlier, you can send a copy of the Form W-4 to the IRS with a cover letter, including your name, address, employer identification number, and the number of forms included. The service center will send you further instructions if it determines that you should not honor the Form W-4.

References:

• Form W-4 (PDF), Employee's Withholding Allowance Certificate
• Tax Topic 753, Form W-4 - employee's withholding allowance certificate

One of my employees gave me a W-4 form claiming exemption from withholding. Do I have to send the W-4 to the IRS?

If you receive a Form W-4 (PDF) on which an employee claims:

exemption from withholding and his or her wages would normally be expected to exceed $200 or more a week, or

more than 10 withholding allowances,

you must send a copy of that W-4 to the IRS service center with your next Form 941 (PDF) return or with a cover letter that includes yours name, address, EIN, and number of forms included. The IRS will send you further instructions if it is determined that you should not honor the Form W-4. For additional information on Form W-4, refer to Tax Topic 753 and/or Publication 15, Circular E, Employer's Tax Guide.

References:

• Publication 15, Circular E, Employer's Tax Guide
• Form W-4 (PDF), Employee's Withholding Allowance Certificate
• Form 941 (PDF), Employer's Quarterly Federal Tax Return
• Tax Topic 753, Form W-4 - employee's withholding allowance certificate

If we received a Form W-4 with a blank in the number of withholding exemptions. How should we handle this?

This should be treated as claiming zero withholding allowances. If the employee has completed the remainder of and signed the Form W-4 (PDF), Employee's Withholding Allowance Certificate, and indicated that he or she is single or married, withhold from the single or married table as indicated on the employee's form with zero withholding allowances. If the employee has not indicated that he or she is single or married, or if the employee has not signed the Form W-4 and otherwise completed the Form W-4, withhold as if he or she is single with zero withholding allowances.

References:

• Publication 15, Circular E, Employer's Tax Guide
• Form W-4 (PDF), Employee's Withholding Allowance Certificate
• Tax Topic 753, Form W-4 - employee's withholding allowance certificate

I hired a babysitter to care for my children in my home. Do I need to withhold taxes on her wages?

Household employees include housekeepers, maids, baby-sitters, gardeners, and others who work in or around your private residence as your employees. If you pay a household employee cash wages of $1,400 or more in 2003, you generally must withhold social security and Medicare taxes from all cash wages you pay to that employee. For specific information, refer to Tax Topic 756, Employment Taxes for Household Employees , or Publication 926, Household Employer's Tax Guide .

References:

• Publication 926, Household Employer's Tax Guide (For Wages Paid in 2002)
• Tax Topic 756, Employment taxes for household employees