Form W‑4N Withholding Allowance Certificate

Form W‑4N Withholding Allowance Certificate: Key Takeaways

• Form W-4N is Nebraska's state-specific withholding allowance certificate used to determine accurate state income tax withholding from wages.
• Since January 1, 2020, all Nebraska employees filing federal Form W-4 must also complete Form W-4N; failure results in withholding at the highest tax rate of 6.95%.
• Employers must collect, maintain, and use Form W-4N to calculate withholding and may need to submit forms to the Nebraska Department of Revenue upon request.

Form W-4N is a crucial document for Nebraska employees to ensure correct state tax withholding. This certificate works alongside the federal Form W-4 to tailor wage withholding specific to Nebraska’s requirements.

Understanding how to complete and manage Form W-4N helps both employees and employers maintain compliance with Nebraska tax laws.

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1. What Is Form W-4N Withholding Allowance Certificate?

Form W-4N, officially called the "Employee's Nebraska Withholding Allowance Certificate," is a tax form used by Nebraska employees to specify the number of withholding allowances they claim for state income tax purposes.

This form ensures state income tax is withheld accurately from wages throughout the year. It works in tandem with the federal Form W-4 to address Nebraska's unique withholding rules.

Purpose of Form W-4N

The primary purpose of Form W-4N is to allow employees to inform their employer of their filing status and the total allowances they wish to claim for Nebraska withholding. Based on this information, employers calculate the amount of state tax to withhold from each paycheck.

Without a properly completed Form W-4N, employers default to withholding taxes at the highest state marginal income tax rate, which is 6.95% as of 2020.

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2. Who Must Complete Form W-4N and When?

All employees working in Nebraska who submit a federal Form W-4 must also complete Form W-4N as of January 1, 2020. This applies to new hires and current employees who want to adjust their state withholding allowances.

If an employee neglects to turn in a Form W-4N, the employer must withhold state income tax at the highest tax rate, treating the employee as single with zero allowances.

When to Update Form W-4N

Employees should update their Form W-4N whenever they experience significant life events or financial changes that impact their withholding needs, such as:

• Marriage or divorce
• Birth or adoption of a child
• Changes in income
• Changes in tax deductions or credits

Staying current helps ensure accurate withholding and avoids unexpected tax liabilities or overpayments.

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3. How to Complete Form W-4N

Completing Form W-4N requires providing some essential personal and tax information. Key elements to fill out include:

• Employee's full name, Social Security number, and mailing address
• Filing status (either “Single” or “Married”)
• Number of Nebraska withholding allowances the employee claims
• Optional additional withholding amount per paycheck, if desired
• Claiming exemption from withholding, if eligible, by certifying no Nebraska tax liability in previous and current years

Employees must be accurate and honest in their declarations to avoid underpayment or overpayment of state tax.

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4. Employer Responsibilities for Form W-4N

Employers play a critical role in Nebraska withholding compliance by:

• Ensuring each employee completes a Form W-4N upon hire or at allowance adjustment
• Using the allowances and information provided on Form W-4N to calculate proper Nebraska state income tax withholding from wages
• Retaining copies of completed Forms W-4N in employee payroll records
• Submitting the forms to the Nebraska Department of Revenue when requested

Employers should also stay informed about updates to the form or withholding rules and use the latest version available from the Nebraska Department of Revenue website.

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5. Importance of Accurate Withholding and Updates

Precisely determining withholding allowances on Form W-4N helps employees avoid owing large tax bills at filing time or receiving unnecessarily large refunds, which can reduce take-home pay during the year.

Life changes or financial shifts can require employees to adjust their withholding allowances, so regularly reviewing and submitting an updated Form W-4N is recommended.

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6. Additional Resources To Learn About Form W-4N

For the most accurate and up-to-date information regarding Form W-4N and Nebraska state income tax withholding, the following official resources are helpful:

• Nebraska Department of Revenue
• Nebraska Income Tax Withholding Forms
• Income Tax Withholding FAQs from Nebraska Department of Revenue

Form W-4N Withholding Allowance Certificate: Conclusion

Form W-4N is an essential Nebraska state tax form that ensures proper withholding of state income tax from employees' wages. Completing this form accurately helps prevent tax liabilities and supports compliance with state tax laws.

Both employers and employees benefit from understanding the usage, filing requirements, and updating procedures for Form W-4N to maintain smooth withholding and avoid penalties.

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