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Payroll Tax Information

W4 FORM UPDATE

The IRS is expected to release a redesigned W4 form for tax year 2020 in 2019.  Based on the timing of the release there may be a delay in updating your tax changes including new hire, tax treaty & resident alien for tax purposes W4 forms.

When it is released by the IRS, Central Payroll Bureau will create the final version for our use.  We expect this to happen in early to mid-December. As soon as this form is released it will be made available to campus.

NEW 2020 Employee Withholding Certificate: COMING SOON

MORE INFORMATION: IRS Frequently Asked Questions

W-4 – Employee Withholding Allowance Certificate

In the absence of a W-4, the federal and state tax laws and regulations mandate maximum taxes be withheld.

The law requires that you complete an Employee’s Withholding Certificate (W-4) so that your employer, the State of Maryland, can withhold federal and state income tax from your pay.  Maryland residents are required to use the State’s combined W-4 form.  The employee must use an original form with black ink.  The employee must complete the form.  The payroll preparer may not advise an employee on what to claim on their W-4 and should only instruct them on the correct way to complete the form to avoid administrative errors that would cause the form to be rejected by Central Payroll Bureau.

Prompt filing of the Employee Withholding Certificate “Form W-4” is to the advantage of all employees.  In the absence of a Form W-4, the federal and state taxes are set at “max tax withholding” according to federal and state tax laws and regulations.  Upon receiving the W-4 the withholding status will be changed for future pays.  Any overpayment of taxes is refunded to the employee when they file their taxes for that year.

You may update your W-4 via the Payroll Online Service Center or the paper W-4 form below.  If you are a current employee and do not already have an account, follow the POSC Set-up Instructions to create an account.

Prompt Filing of Employee Withholding Certificate

New Hires

If the W-4 has not be submitted or was submitted in error, the employee’s tax status will be established at the default withholding until a new W-4 is submitted.

Filing Exempt

If you have previously filed as “exempt” from federal and/or state withholding, you must file a new W4 annually.  Annual W-4 tax filing is required for ALL employees that claim exempt state and/or federal taxes.  Employees who claimed exempt for Federal and/or State income tax withholding must file a paper version of the W-4 annually if they wish to remain exempt in the next calendar year. Employees claiming exempt cannot use the Payroll Online Service Center (POSC). If an employee is claiming exempt because they live in PA or VA, they DO NOT need to re-file.

If a new W-4 is not submitted in time, the employee’s tax withholding will be set to the default withholding until a new W-4 is submitted.  (CPB memo on Filing Exempt Annually) IRS regulations require Central Payroll Bureau (CPB) to revert back to the “max tax” for individuals currently claiming exempt but do not re-file. Employees changing from exempt to taxable also need to complete a new W-4 so they will be taxed according to their designation and not automatically “max taxed”.

Federal and/or State Tax Withholding Changes

Employees are reminded that changes to already existing W-4 information may be submitted electronically via the Payroll Online Service Center (POSC) in most cases.  An employee may not claim a tax exempt via the POSC and this must be done via a paper W-4.  2019 W-4 Maryland – PDF

A new W-4 must be completed when you Change your address.  If you live in Virginia or Pennsylvania, you are responsible for your own “state” taxes as Central Payroll Bureau does not have reciprocity with these states.

To learn why the State of Maryland doesn’t withhold Pennsylvania State Tax for our government employees who work here in Maryland yet live in Pennsylvania?

FICA Withholding

Student employees (Student/Graduate employee classifications) will be FICA exempt if they are enrolled in classes at least half time basis (6 credits) as of day 10 for the Fall and/or Spring semester or in a taxable F-1 or J-1 VISA status.  Human Resources – Payroll runs an automated program to evaluate and adjust FICA exemption based on class enrollment/credits.  The FICA status for the winter period is based on the Fall course enrollment.  Since summer semester has multiple mini-semesters, the program evaluates FICA exemption based on the active mini-semester(s) in the corresponding pay period which must be at least half time (3 credits).

If an employee enrolled in a class after the FICA program was run for that period, they will be exempt in the following program run.

W-2 – Wage a Tax Statement

The Internal Revenue Service (IRS) and the State Income Tax Division require earnings statements to be based on the total amount of payroll checks actually received (gross earnings) and withholdings for the employee for the period January 1 through December 31.  These statements are called W-2s.

W-2s are mailed out by Central Payroll Bureau (CPB) each year no later than January 31st.  The W2 will be sent to the address that is displayed on the employee’s check.  It may be updated by completing a new W-4 form or by submitting the information on the electronic W-4 form through the employee’s Payroll Online Service Center (POSC) account.  If you have not received your W-2 you may request a duplicate W-2 from Central Payroll Bureau.

You may also access the latest 3 years of W-2 statements through your Payroll Online Service Center account.  If you have questions about how to read your W-2 and how to reconcile it with your year end pay stub, you can learn more about it in the Your 2018 W-2 & What You Need to Know guide.  If you have questions about how to read your W-2 and how to reconcile it with your year end pay stub, you can learn more in the Your 2018 W-2 & What You Need to Know guide.

For terminated employees, if your address has changed or you have not received your W-2, you may access your W-2 via the Payroll Online Service Center.

The most up to date memos relating to W-4, W-2 and other tax related information may be found on the Comptroller of Maryland’s website.

Comptroller of Maryland: Filing a W-4 and Change of Address memo

Year End Information

Canceled checks and overpayment recoveries must be processed prior to the year-end closing deadline which is determined by Central Payroll Bureau each year.  Any transactions processed after the deadline will not be reflected on the W-2 statement.  A corrected W-2 statement will need to be requested for these employees.

Tools & Resources

Net Pay Calculator – The net pay calculator can be used for estimating taxes and net pay.  Before using, please have a copy of your pay stub for reference.

Payroll Online Service Center (POSC) allows employees to review and print online pay checks, year-to-date pay history and W-2s. You may also manage your W-4 and change your address with your POSC account.

Comptroller of Maryland – State Employee Information relating to Payroll topics (W-2, direct deposit and W-4 tax withholding)

Payroll Memos

IRS Encourages All Employees to Use the “IRS Withholding Calculator” UPDATED 7/20/18

2018 Federal Tax Memo from Central Payroll Bureau (1/16/18 memo)- “State employee’s should see the new calculations of their federal taxes on January 26, 2018.”  You may log in to the POSC on January 24th to get a preview of your net pay before check day.

2018 Payroll Tax Changes effective January 1st (1/31/18 memo)

2018 Maryland Income Tax Withholding Information

Withholding of Pennsylvania State/Local Taxes

27 Pays in Calendar Year 2015

Employee State Payroll Services (Note: We are considered University of Maryland Employees, holidays and payroll processes may differ.)