Ala. Admin. Code r. 810-3-73-.01 - Withholding Exemption Certificates
(1) Every employee is required to furnish his
or her employer an Alabama withholding tax exemption certificate Form A4 at the
time of employment showing the number of exemptions claimed. The number of
exemptions claimed may not exceed the number of exemptions to which the
employee is entitled to claim under Section
40-18-19, Code of Ala.
1975. A Form A4 exemption certificate is considered a component of
payroll records and should be maintained in accordance with Rule
810-3-70-.02
Retention of Payroll Records. Exemption certificates
should be kept with the employees personnel file.
(2) Federal Form W-4 will not be accepted as
a substitute for Form A4 as the values of exemptions differ greatly between the
Alabama and federal allowances.
(3)
Failure by the employee to provide to his or her employer a signed, Alabama
withholding exemption certificate will result in the employer withholding using
zero ("0") exemptions.
(4) An
employer is not required to deduct and withhold tax on the wages of an employee
if the employee certifies on Form A4-MS that the employee qualifies for an
exemption under the Military Spouses Residency Relief Act. This exemption
applies to the spouse of a service member who is present in Alabama in
compliance with military orders and who maintains domicile in another state.
Employees must provide their employer with a valid military identification.
Employers will report the employee's wages on Form W2 reflecting the state of
legal residency shown on the spouses Form DD-2058 or current leave and earnings
statement. Employers must keep a copy of these forms on file.
(5) Pursuant to the requirements of Section
40-18-73, Code of Ala.
1975, employers must provide to the Alabama Department of Revenue,
no later than 60 days from the date the employee begins employment, a copy of
any withholding exemption certificates where an employee claims eight (8) or
more exemptions. Failure to provide this information within the above stated
time period shall subject the employer to the "failure to timely file" penalty
of $50 per certificate.
(6)
Penalties.
(a) In the event an employee
inflates the number of exemptions allowed under Section
40-18-73, Code of Ala.
1975 on Form A4 in order to reduce their withholding or falsely
claims an exemption from withholding tax on Form A4-MS, the employee shall be
subject to a penalty of $500 for such action pursuant to the provisions of
Section 40-29-75, Code of Ala.
1975.
(b) Any person
who fails to comply with the requirements of this section also shall be subject
to the penalties provided in Section
40-2A-11, Code of Ala.
1975, and/or may be subject to criminal prosecution.
Notes
Author: Neal Hearn
Statutory Authority: Code of Ala. 1975, ยงยง 40-2A-7(a)(5), 40-18-73.
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