About 78% of first-year students received some form of financial assistance for the 2002-03 school year.
Payroll: Payroll Taxes
Federal Income Tax / Form W-4
All new employees should complete and
submit a [IRS]
Form W-4
Employee’s Withholding Allowance Certificate
to establish the appropriate federal income tax withholding from his paycheck.
At any time after the initial W-4 setup, an SMU employee can update his W-4
online via Self-Service in
access.smu.edu to change his federal income tax withholding.
The form includes the tax marital status
(Box 3) and the number of allowances claimed (Box 5) that correspond with the
IRS tax tables to determine the tax withholding. An employee may request an
additional dollar amount to be withheld (Box 6). Income tax withholding must be
based on the claimed marital status and withholding allowances. An employee may
not base his withholding amount solely
on a fixed dollar or percentage.
If a new employee does not provide a
completed Form W-4, income tax is withheld based on the IRS default of
single, with
zero allowances.
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Claiming “exempt” from federal income tax withholding
An employee may claim “exempt” from federal
tax withholding on his or her Form W-4. (Refer to the IRS guidelines at the top
of Form W-4 about the conditions under which an employee may be exempt from
federal income tax withholding.)
The employee’s claim to be exempt from
federal income tax withholding is only effective for the calendar year in which
the exemption is claimed, and will automatically expire on February 15 of the
following year unless the employee submits a new Form W-4 claiming to be exempt
from federal income tax withholding for the next calendar year.
Medicare and OASDI Taxes (a.k.a. “FICA”)
The Federal Insurance Contributions Act (“FICA”) is
supported by OASDI (“social security”) and Medicare taxes. These are commonly
referred to as one tax (FICA) – but they have different tax rates and only the
OASDI tax has a wage base limit that is adjusted annually. (The 2011 limit is
$106,800.)
There are no withholding allowances for OASDI and Medicare
taxes. As of 01/01/11, the employee tax rate for OASDI is 4.2% of wages
up to the wage base limit; for Medicare, the tax rate of 1.45% is applied to all
covered wages.
FICA Tax Exemptions
There are three provisions for tax exemption under FICA
that may apply to SMU employees:
- Student FICA exemption
- Minister’s FICA exemption
- Nonresident Alien FICA exemption
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