Question

A newly hired EE who is married with two children fails to complete Form W-4 by the first payday. What withholding status does the ER use when calculating the EE's withholding?

a. Married, 2 allowances
b. Married, 3 allowances
c. Single, 2 allowances
d. Single, 0 allowances

Answer 1

When a newly hired employee fails to complete Form W-4, the employer defaults to the withholding status of 'Single, 0 allowances' to calculate the EE's withholding.

Step-by-step explanation:

If a newly hired employee (EE) who is married with two children fails to complete Form W-4 by the first payday, the employer (ER) should use withholding status 'd. Single, 0 allowances' when calculating the EE's withholding. This default status is specified by the IRS to ensure that enough taxes are collected throughout the year to cover the EE's potential tax obligation.