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Exemption From Federal and State Withholding

Any employee who qualifies and wishes to take advantage of exempt status from federal withholding for 2014 must complete a new Form W-4 (Employee’s Withholding Allowance Certificate) before February 17, 2014.

To qualify for exemption from federal withholding for 2014, an employee must meet all of the following criteria: (1) must have had no Federal income tax liability last year, (2) must expect to have no Federal income tax liability this year. You cannot claim exemption from federal withholding if (a) your income exceeds $1000 and includes more than $350 of unearned income and (b) another person can claim you as a dependent on their tax return. For 2014, the federal personal exemption is $3,950.

An employee may claim exemption from Michigan income tax withholding only if they do not anticipate a Michigan income tax liability for 2014 because employment is less than full time AND exemption allowances are greater than annual compensation. The exemption allowance for the State of Michigan for 2014 is $4,000. The number of exemptions claimed for state withholdings may not exceed the number of personal exemptions to which an employee is entitled when filing their federal income tax return.

Federal and State W-4 forms and W-4 instructions are available in the Payroll Office, Hannah Administration Building, 426 Auditorium Road Rm 350. Forms are also available on the Payroll web site.

Questions should be addressed to the Payroll Office at 355-5010 or payroll@ctlr.msu.edu.

Michigan State University