To explain the procedure for the annual review of employees who claim to be exempt from Federal and State withholding.
Employees claiming to be exempt from withholding of tax.
Internal Revenue Service regulations require anyone claiming Federal tax-exempt status to file a new W-4 by February 15 each year. New York State Department of Taxation and Finance regulations require anyone claiming State tax-exempt status to file a new IT-2104-E, annually. The W-4's and IT-2104E's for the current year's exemption are to be retained in the employee's payroll office.
A report (NPAY738) identifying employees in your agency claiming Federal and/or State exempt status is available in Reveal.
If any employee identified as claiming exempt from Federal withholding does not provide you with a new W-4 by February 15, 2002, their status must be changed to 'Single 0' on the Federal Tax Data 1 Panel.
If any employee identified as claiming exempt from State withholding does not annually provide you with a new IT-2104-E, their status must be changed to 'Single 1' on the State Tax Data 1 Panel.
Questions regarding this bulletin may be directed to the Payroll Deductions mailbox.