If you claim exemption from withholding, your employer will not withhold federal income tax from your wages. The exemption applies only to income tax, not to social security or Medicare tax. You can claim exemption from withholding for 2017 only if both the following situations apply. • For 2016 you had a right to a refund of all federal income tax withheld because you had no tax liability. • For 2017 you expect a refund of all federal income tax withheld because you expect to have no tax liability. You cannot claim exemption from withholding if (a) your income exceeds $1,000 and includes more than $350 of unearned income (for example, interest and dividends) and (b) another person can claim you as a dependent on their tax return. Related Links • Tax Withholding and Estimated Tax •.

Are You Withholding Tax Exempt? If you had no tax liability in the prior year and you do not expect to owe anything in the current year, you might qualify to be exempt from federal income tax withholding. You can claim exemption if your income is less than $1,050 and you are a dependent on another person's return. But you are not exempt as a dependent if your income is $1,050 or more and if at least $350 of that is from income not related to work, such as dividend or interest income.

If your total income is less than $12,000 as a single person and doesn't include more than $350 in unearned income as a dependent, you can claim exemption. If you are blind or at least 65 years old, you must complete Worksheet 1-1 or 1-2 in Internal Revenue Service Publication 505 to determine whether you are exempt from federal taxes. Your employer uses Form W-4 to document your personal allowances and, if possible, your exemption from federal taxes. You must complete a Form W-4 when you begin employment for a new employer and any time your information changes.

If you're exempt, you need to file every year, as exemptions are only good for one year. File the form by Feb. 15 of the year you're exempt, or your employer will have to start withholding taxes from your paycheck. Enter your identifying information, such as your name, address and Social Security number, on Form W-4.

Regulations Update: BIR Regulations Implementing Expanded Senior Citizens Act. How to maplestory 2 korean how to bypass surveys. But whose income had been subjected to the withholding tax on compensation, shall, although not exempt from income tax, be entitled to the substituted filing of income tax return under Revenue Regulations No. 2-98, as amended. Regulations Update: BIR.

Do not complete lines 5 and 6 and write 'Exempt' in the box on line 7. Sign and date the form and return it to your employer. Your employer will stop withholding federal tax after receiving your completed Form W-4. If your situation changes after submitting the form to your employer so that you will owe tax, you must complete a new W-4 within 10 days showing your allowances and additional withholding, if any, and leaving line 7 blank. Other Considerations If you have not filed a W-4 with your employer showing that you are exempt from federal tax withholding, the payroll department might have made an error. Check with your employer or someone in the payroll department as soon as possible to correct the error. Even if your employer made a mistake, you are still responsible for paying the tax on your income.