Can anyone help me with withholding tax on bonuses?

Payroll Discussion about the Can someone help me with bonus tax withholding? and various important topics, studies, strategies, and general notes are discussed here.

Can anyone help me with withholding tax on bonuses? is a collection of information, discussion comments from a Reddit source.

Can someone help me with bonus tax withholding?

I have to collect a separate bonus on February 19th. I would like to get the most out of this check so I turn to my W4. I logged into ultipro and marked myself as exempt. This apparently signaled me, and I received an email from a payroll specialist to resolve the issue by the 12th, my next regular payday, or I’ll default to simple and zero. I have declared myself exempt from a bonus payment in the past and agreed with other employers. Doing this just once a year is ok to get by with tax time for me. The line asks if I had no responsibility last year, AND for this year. This seems to mark my free from w4. I don’t understand the problem here.

This thread was originally published on 2021-02-06 11:10:33.

Employees, Customers, and any companies can make use of Can someone help me with bonus tax withholding? study which has a detailed view of the Can anyone help me with withholding tax on bonuses? with payroll procedures, process, and application.

3 thoughts on “Can anyone help me with withholding tax on bonuses?”

  1. Your employer is not obligated to honor a W-4 they know is not correct and you can’t make them. Your employer can also just withhold the flat 22% and there’s not much you can do about that either. When you sign a W-4 you are certifying under penalty of perjury that what you’re claiming is correct. 22% is generally a best practice with separate bonus runs. (ignore the W-4 and just withhold 22% for everybody, it prevents employees from playing these games)

    Reply
  2. Everyone claiming exempt from federal withholding has to complete a new 2021 W4 by midmonth February. They probably ran a report with everyone claiming exempt and pulled you in. Make sure you complete a new 2021 W4 by the date they gave you and you should be fine.

    Reply
  3. Using the new w4 you would increase your dependents in section 3 and/or your deductions in section 4.

    However be cautioned that your employer may…and should… disregard the w4 and use the supplemental 22% rate since the bonus is being paid outside the normal payroll process.

    But your payroll dept is technically correct in confirming your exempt status as unless you received every bit you paid in as a refund you are not supposed to claim exempt status. However they are wrong in forcing you to NOT elect exempt. If you meet all criteria in full and you affirm to them as such they should allow it and move on.

    Reply

Leave a Comment