The Catholic University of America

Summary of Federal Laws


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 Circular E (Employer's Tax Guide) for information on filing 




IRS Statements-Withholding for 2018

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. 


updated 8-21-18