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Can an employer limit the number of times you change your W-4 form?
I'm hoping to find an actual IRS rule regarding this situation. Thank you for your help.
Where do the IRS rules dictate this?
1 Answer
- Bostonian In MOLv 71 decade agoFavorite Answer
Employers are normally required to accept any changes to your W-4 and process the changes within one or two pay periods.
However if they feel in good faith that your changes are either fraudulent (such as suddenly switching to EXEMPT when you income does not support a claim of EXEMPT, or switching back and forth to EXEMPT) or if your changes are arbitrary and capricious (such as submitting a new one on an unusually frequent basis) they can refuse to accept it or process it.
Some employers pay bonuses on a set schedule and may refuse to process W-4 changes in the pay period or two prior to bonus payouts. Bonuses are subject to statutory withholding requirements so what you put on your W-4 is irrelevant to how much tax will be withheld from the bonus anyway and this avoids unnecessary work for the payroll staff.