Question
How do I correct an employee if they marked themselves as tax-exempt on their Form W-4?
Answer
Occasionally, we see that an employee marked themselves as exempt on their federal or state Form W-4 by accident, causing them not to be taxed on payroll.
If this was an accident, follow these steps to fix the tax exemption error:
Fill out a new Form W-4 in the system to ensure the employee is taxed correctly moving forward.
When updating their Form W-4, the employee can choose to have additional taxes withheld to increase taxes on future payrolls to catch up on missed tax withholdings.
In order to correct past checks that were taxed incorrectly based on the Form W-4 error, process voids & then re-record the checks via Quick Calc.
With this option, standard void & re-record rules apply- meaning only checks in the current quarter can be voided (otherwise a wage amendment is needed).
You would need to reconcile any difference in net pay with the employee directly.
This content is for informational purposes and is not intended as legal, tax, HR, or any other professional advice. Please contact an attorney or other professional for advice.