Tax professionals, is it leagal to claim exempt on your W4 for just one pay period and then change it back?

Question

I've heard of peple doing it before like when they have worked a lot of over time and dont want taxes taken out.

Is it ok to do this for just one pay period?

Answer 1

No. It's not legal to claim exempt unless you are legally exempt from paying taxes. Most people are never qualified to claim exempt status.

What you *can* do is revise your W4 to claim a large number of exemptions for a brief time. That will ensure you get almost all of your withholding back into your paycheck, while at the same time making sure you don't cheat yourself on your Medicare and Social Security taxes.

Answer 2

Tecnically you can't claim "exempt" if you legally aren't, but as long as you are fine come year end with federal and state taxes paid you shouldn't have a problem. Jjust remember though that your employer still has to withhold social security and medicare taxes. And your payroll dept might give you a hard time about changing your W4 for just 1 pay period. It's not worth the hassle.

Answer 3

No, actually it's not legal to claim exempt, even for one pay period, if you aren't.  But if otherwise too much would be taken out, you can increase your allowances substantially for that pay period - just don't forget to change it back.

Answer 4

I'm a payroll manager and I don;t allow it - if you have tax liability of even $1.00 at the end of the year, you aren;t entitled to file as exempt

Answer 5

You are playing with fire.  Exempt means that you did not have a tax liability in the previous year and do not expect to have one in the current year.    Exempt was intended for low wage earners who only work for a short period of time such as students.

Answer 6

No, it is not legal.  There are qualifications for filing a W-4 as exempt.  Those qualifications are:

1. you had no tax liability last year (you got ALL of your withholdings back)

2. you have every reason to expect the same to be true this year

I am inferring from what you wrote that those don't apply, so filing as exempt, even for one pay period, would be illegal.

You can turn in a huge number instead and that may accomplish what you are trying to do.  With 10 or more allowances, you have to have a pretty good paycheck to have anything withheld.

Remember, whatever you put on your W-4 will NOT affect Social Security tax, Medicare tax, state tax, or local tax withheld, so some will be withheld no matter what.  Most states have their own version of a W-4 so you can do the same for your state.

Be careful.  By messing with your withholdings you are just getting the money that would come on your refund earlier, not affecting your tax bill for the year in any way.  And if you do this enough, you will owe at the end of the year, and if you owe too much, you may be subject to penalties as well as the balance due itself.