The Catholic University of America

Summary of Federal Laws


Compliance Partners

Payroll Director

Tax Issues Related to Employment


26 U.S.C. § 3402; 26 CFR § 31.3401

On or before the date on which an individual commences employment with an employer, the individual shall furnish the employer with a signed withholding exemption certificate relating to his or her marital status and the number of withholding exemptions which he or she claims. See 26 C.F.R. § 31.3402(f)(2)-(1). The employer is required to request a withholding exemption certificate from each employee, but if the employee fails to furnish such certificate, the employer shall consider that employee a single person claiming no withholding. On or before December 1 of each year, every employer should request of each employee a newly completed withholding exemption certificate for the ensuing calendar year.


Employers are require to keep records of employee payments, taxes withheld, and payments to state unemployment compensation funds for four years from date the tax return is due or paid, whichever is later. See 29 C.F.R. § 31.60001 et seq. Many other recordkeeping requirements apply that are not covered in this Summary of Federal Laws.


See Rev. Proc. 99-47, 1999-49 I.R.B. 624, for the requirements for filing Forms W-4 (employee's withholding allowance certificate) on an electronic or magnetic media basis. Applies to Forms W-4 filed for quarters ending March 31, 2000 and all later filings.

Withholding of Income tax on Remuneration Paid to Employees working outside U.S.
April 4, 2008 ILM 200814010 Chief Counsel Advice from IRS: Remuneration for services paid to the employee who is a United States citizen are wages for income tax withholding purposes to the extent that they exceed the amount of the exclusion that the employee is entitled to under section 911 and are not subject to withholding under the laws of a foreign country.



IRS INFO 2013-0023 Release Date 6/28/13
Severance Pay is considered supplemental wages subject to withholding (including social security, Medicare and FUTA) under tax regulations.

US WIthholding Agent FAQ   10-26-2012 This Q & A contains guidance on the withholding mechanism for payments to foreign vendors/service providers/non-reisdent aliens and suggestions for an internal audit. The IRS says that taxpayers may not rely on these FAQs as legal authority and that they do not amend, modify, or add to any of the provisions set forth in the regulations or any other legal authority. 

IRS Notice 2011-12 Withholding of Wages on Nonresident Alien Employees Performing Services within the US. This notice provides that Notice 2009-91, 2009-48 I.R.B. 717, will not apply to
wages paid on or after January 1, 2011


CCR updated CFR links 7/14/15