Taxpayer asks:
Dear taxgirl,
Can a taxpayer refuse to have the credit on their paychecks and receive
the full credit on their 2009 return? Also – are they changing the tax
table for 2009 to help with this credit?
Taxgirl says:
The answer to the last question is the easiest: yes, the tables have been changed so that employers can adjust the withholding. We received one of those lovely newsprint IRS pubs at our office just last week. If you are an employer and didn’t receive one – and want one – you can download it from the IRS website as a pdf. If you use an online or third party payroll service, the changes have probably already been made effective for April 1, 2009, but I’d confirm with them just to be sure.
The answer to your first question is a little more tricky. It’s one of those that I get to answer with a “lawyer answer”: yes and no. It’s no in the sense that the employee can’t go up to the employer and insist that the employer use the old tables – that would cause serious confusion (and I mean that, speaking as an employer). But if an employee is concerned about having to refund money at tax time because he or she is a dependent on another taxpayer’s return or other consideration (such as taxpayers with multiple jobs), the employee can certainly adjust his or her withholding on a form W-4.
You can make an adjustment on your form W-4 by changing the number of withholding allowances on the form. When you claim zero, the highest amount of tax will be withheld. The more allowances you claim, the less tax will be withheld. So, if the goal is to have more tax withheld (since the new credit withholds less tax), adjust your allowances down. If you’re already claiming zero and still want to make an adjustment, you can indicate an additional dollar amount by writing it in on your W-4.
If all of this seems a bit confusing, give the IRS Withholding Calculator a whirl. Be aware that it’s not yet been updated to reflect the new tables. I expect that to happen on or about April 1.
